Book Royalties: What to Know

If you’re looking to publish a book, there are several topics to learn about. Matters like manuscript editing or formatting, among a plethora of other stuff. When it comes to actually selling your book, it’s crucial to know about book royalties and how they work. No worries. After this guide, you’ll be in the know.

I go over:

• What are book royalties
• Royalties under traditional publishing (what’s an advance)
• Royalties under self-publishing (what’s an aggregator)

First off, what are book royalties?

Book royalties are what you’re paid through as a published author. Royalty rate is a term you’ll frequently hear about. It refers to the percentage you’d get for every copy sold, based on the retail price of the book. Royalty percentages (and conditions) differ between traditional publishing and self-publishing.

Book royalties under traditional publishing

How do royalties work for books in traditional publishing? There’s usually an exchange for the rights to the author’s book. And royalty rates vary across book formats. For example, ebook royalties differ from print royalties. Royalty rates vary across publishers too. But generally, they’re around 10%.

Here’s what you can expect from traditional publishers:

• Paperback: 5-8% royalties
• Hardcover: 15% royalties
• Ebook: 20-25% royalties

Let’s do the math for a better picture. Book Launchers shared a super simple example:

Your paperback retails at $20. You’re contracted to receive 5% royalties. That means you earn $1 per every book sold. Selling 1 million copies means making 1 million in royalties!

Important: what’s an advance?

But here’s the thing with traditional publishers: you get your royalty payout only after you earn back your book advance. What’s an advance? It’s an upfront payment from the publisher based on how many copies they think your book will sell. You see –

“Publishers aren’t going to take a chance and pay in advance for a book they aren’t sure is going to be a guaranteed success. Whatever the final number, it’s important to remember that an advance isn’t simply a thank you gift from your publisher. It’s a payment against whatever future royalties you make. Unless you make enough book sales to cover the cost of the advance, you won’t ever see another check.” (Book Launchers)

Pretty much, if you’re just starting out as an author, it can be a challenge to reach an advance, let alone land a contract from a publisher. That’s where self-publishing comes in.

Self-publishing has been thriving over the last decade. Since the outbreak of the pandemic, dominating. As physical bookstores struggle, digital stores like Apple Books are booming. Likewise, digital formats like ebooks, audiobooks, and print-on-demand books are high in demand.

The world has drastically shifted to digital. More people are seeking online modes to read. And self-publishers – well versed in selling online content – have benefited the most.

Quick rundown: traditional publishing vs. self-publishing

Book royalties under self-publishing

Self-publishing means you’re not tied to a publishing entity or agent. It quite literally means you take care of the publishing process YOURSELF. Like traditional publishing, royalty rates vary across book formats and self-publishing channels.

What to expect from some of the best self-publishing companies:

• Amazon KDP: up to 70% royalties for books between $2.99 and $9.99, 35% if below $2.99
• Apple Books: up to 70% royalties
• Google Play Books: up to 70% royalties
• Barnes & Noble: up to 70% royalties for ebooks, 55% for prints
• Kobo: up to 70% royalties for books priced more than $2.99, 45% if below $2.99

Royalty software for publishers 

If you’re looking to self-publish in channels like Amazon KDP, IngramSpark, Kobo, and more, consider using a royalty calculator. PublishDrive’s tool for royalties is called Abacus. It does all the number crunching for multiple royalty revenues. It’s a fantastic tool for co-authors and collaborative teams too.

Learn more about the royalty software for publishers.

Important: what’s an aggregator?

So there are self-publishing companies like Amazon KDP where you self-publish your book to their online store, app, or distribution network. To maximize reach, some indies go through every single publishing process with every channel out there. But that takes up a lot of time. That’s why aggregators exist.

An aggregator company distributes for you to multiple places like Amazon, Apple, and beyond. Most aggregators take an extra 10% cut in book royalties on top of set rates with individual stores. (Your take-home royalty rate is still higher versus traditional publishing, though.)

PublishDrive is a unique aggregator that doesn’t take any royalties. That means you collect 100% of the royalties you earn from stores. Instead, you pay a monthly fee to distribute to thousands of PublishDrive’s store partners. Especially at higher earning levels, that 10% cut becomes significant.

Let’s do the math again. Let’s say you sell a book for $9.99. The aggregator you’re with uses a 70% payout plan. That means you receive $5.99 and the aggregator gets $1. That $1 represents 10% of the sales price only. In terms of the amount you actually give up, you lose about 17% of your royalties to the aggregator ($1/$5.99).

With PublishDrive, you pay a monthly fee as low as $9.99 and keep all the royalties you deserve.

“When you’re selling 5,000 books a month at 10% versus a flat fee of 100 bucks, that’s sort of a no-brainer...We can use PublishDrive, save a ton of money, and still reach the same audience and actually a bigger audience which is awesome too. When I first heard about that, I almost thought it was too good to be true.” – Quinn & Bo Loftis