If you distribute your ebooks through an aggregator and your answer to this question is 0, then you are 99% wrong.
If you think this amount is negligible, then you are 100% wrong, or your ebook royalty amount is also negligible.
Most ebook aggregators use a royalty share model, which doesn’t require upfront fees and allows authors to pay as they earn. At first glance, royalty share pricing seems like a great option.
But it turns out that subscription-based ebook distribution is a much more profitable option. In fact, authors can boost their take-home royalties by about 14% with subscription pricing!
In this post, we’ll take an in-depth look at the true cost of ebook aggregation so you can make the best decision for your ebook publishing gig.
The Basics of Ebook Distribution
If you go wide with your ebooks (i.e., sell your books outside of Amazon’s KDP Select/Kindle Unlimited program), your natural interest is to make your titles available for sale on as many stores as possible.
But the more stores you want to reach, the more effort it requires for distribution management, especially as your backlist grows. This is where aggregators come into the picture: they handle all operational and financial tasks on your behalf for hundreds of stores.
To Aggregate or Not to Aggregate? That is the Question
Authors typically use aggregators for the following reasons:
- To save valuable time that would have been spent on sending/updating your content to many ebook retailers and collecting your money from them.
- To reach stores that you couldn’t access on your own since they don’t offer direct sign-ups from indie authors (such as Scribd, Overdrive, and Bibliotheca).
Overall, the price you pay for an aggregator’s services should be evaluated by the total value you get from them:
- the energy (=time) saved up for you not handling the stores manually yourself
- the extra royalties made through stores you couldn’t reach on your own
We highly recommend our comprehensive guide for more information on using an aggregator vs. going direct.
Math and Psychology
Most of the aggregators work on – at first glance – a very simple formula: they take a 10% commission after your ebook sales.
There are two very important factors why this formula is simple only at first glance:
Base of the Commission
Aggregators calculate royalties based on the sale price. This means the price of its distribution service depends on the money paid by the final customer, not the royalties you receive.
Let’s break it down: You sell a book for $9.99 and an online retailer uses a 70% payout plan, so you receive $5.99 and the aggregator gets $1. That $1 represents 10% of the sale price only. In terms of the amount you actually gave up, you’re losing about 17% of your royalties to the aggregator ($1/$5.99).
For retailers with smaller payouts, it becomes more. For the standard payout plan used by Amazon, it amounts to about 40% of your royalties being paid to the aggregator.
The other reason why most authors don’t realize how much they've paid is because of the consolidated payments they receive. The amount you receive from an aggregator is already decreased by the amount you paid for their service. You don’t see the amount, you don’t feel you paid - but you have a lot. Let me show you some examples of how much you actually pay for ebook aggregation:
|Amount you received from an aggregator||minimum* amount spent on aggregator’s service|
* These amounts show the best scenario that you have with only sales where the retailers’ payout was all 70%. If you had other, lower payouts, then the cost paid by you is even higher.
Now please, check the amount you received in the last month from your aggregator by finding it in the first column like the table above. In the second column, you will see how much you spent on your aggregation service: zero or negligence?
If both of your answers are no, you should check PublishDrive’s new plans where you can get aggregation with fixed monthly prices and pay much less for this service than in revenue share models.
Fix cost, fix service
Consider PublishDrive newly introduced aggregation service with fixed monthly prices where you keep all your royalties in all stores. It would be earning the same royalties as you would going directly to these stores.
The service is priced on the number of titles you wish to distribute. Replace the number of your title number in the following table and get the fixed monthly cost for aggregation service you would pay with after our service:
|Number of titles||Monthly cost|
Now compare the amount calculated in the previous step and the “Monthly cost” amount.
Would it be worth the switch?
As you now have the price for your titles’ aggregation, are you feeling like you pay too much for it? If your answer is yes, then we applaud you with that accurate sense of self-worth. 😊
Want real numbers? Check out our free case study with Bestselling Author Rachel Morgan to see how she got an increase of 16.44% in net earnings after switching over to us.