Understanding Royalties for Self-Published Books

One of the most oft-cited benefits of self-publishing a book is that you can make more money per sale than you would if you were splitting the profits with a traditional publisher. These “royalties” are higher because you only have to deduct the cost of printing the book and the percentage that the bookseller (like Amazon) will take. 

But how much will you make, exactly in royalties? The answer is, “it depends.” A variety of factors will influence your royalties equation. If you’re publishing your book in multiple formats (paperback, hardcover, ebook, or audiobook), for example, the economics are different for each. For print books (paperback and hardcover), you will receive a percentage of the retail price minus the printing cost of the book. For ebooks there aren’t printing costs, but there is a small “delivery cost” called a VAT that generally averages about $0.06 per book. For audiobooks, there are no extra fees and you’ll just receive a percentage of the retail price. 

Each self publishing platform calculates royalties a little differently. Below is a table showing how royalties are calculated for different versions of your book, and through the two most common platforms (Amazon KDP and IngramSpark). If you want to know more about what platforms we recommend, check out Our Self-Publishing Formula:

Let’s go through these one-by-one.

PAPERBACK

If you utilize our step-by-step formula to self publishing, you will print a paperback version of your book first through Amazon KDP, and then if you want your book to be available via bookstores and other major book retailers you can also publish a second version via IngramSpark.

Amazon’s royalty structure is very simple:

You get 60% of the retail price minus the printing costs. 

You won’t be able to calculate the printing costs until you know exactly how many pages the final book is, but you can assume it will be roughly $3-5 for an average book. Also, when you’re projecting your final page length, a good rule of thumb is 250 words per page. So if your manuscript is 60k words, your final book will be roughly 240 pages. 

You can use Amazon’s pricing calculator to play around with numbers. 

For example, if your book is 250 pages long and you charge $15 for it, here are the economics:

• Your share (60%) of Retail Price: $9.00
• Printing Cost: $3.85
• Final Royalty: $5.15 

Note that once your book is published, Amazon may choose to discount the retail price of your book. In this case, you will still receive the same royalty based upon the retail price that you set. Their discount will be taken out of their own profits. 

Your royalty share is higher through IngramSpark at 70%, but your printing costs are also typically higher (upwards of $4 per 250-page book). So using the example above, your royalties through IngramSpark would be:

• Your share (70%) of Retail Price: $10.50
• Printing Cost: $4.78
• Final Royalty: $5.72 

EBOOK

We also publish two versions of ebooks (a Kindle version through Amazon KDP, and a non-Kindle version through IngramSpark) but the calculus is the same. Amazon prefers that you keep your ebook priced between $2.99 and $9.99, so they reward you with a 70% royalty rate if it’s in that range. If you go above or below, your royalty rate goes down to 35%. We HIGHLY recommend staying in that range. There is also a small delivery fee called a VAT associated with each ebook sale. That number is usually around $0.06 per sale and varies based on file size. 

So if you go with the $9.99 price, your royalty calculation will look something like this: 

• Your share (70%) of Retail Price: $6.99
• Delivery Cost (VAT): $0.06
• Final Royalty: $6.93 

You can pretty much bank on these royalties being almost exactly the same through IngramSpark.

HARDCOVER

The royalty calculations for a hardcover book are the same as paperbacks, with two exceptions: First, the printing costs will be higher; and second, we recommend publishing your hardcover book only via IngramSpark, because they offer hardcovers with dust jackets (while Amazon KDP only offers “case laminate”). 

The printing costs for a hardcover book generally range from $10-$12 when you’re doing a dust jacket. Like paperbacks, IngramSpark will allow you to set your royalty rate as high as 70% (that’s a wholesale discount of 30%). If you want your book to be available for bookstores, however, which is a big reason why a lot of people choose IngramSpark, you’ll need to set your royalty at 47% (a wholesale discount of 53%). But given that most of your sales will be online, I recommend maximizing the royalty rate. 

So here’s the calculus for a 250-page hardcover book (with a dust jacket) set at a $28 retail price:

• Your share (70%) of Retail Price: $19.60
• Printing Cost: $10.86
• Final Royalty: $8.74 

You can use IngramSpark’s pricing calculator to play around with numbers. Note that this calculator has a lot more options (size, paper color, binding, etc) than the price calculator through Amazon KDP. The only factor that really changes the price is whether you’re going with hardcover or paperback; and then within hardcover, whether you’re doing case laminate or adding a dust jacket. Color vs black & white also makes a difference, but color printing is so expensive that it is almost never worth it unless you’re printing a children’s book with a much lower number of pages. 

AUDIOBOOKS

Audiobooks are a lot more straightforward than the other versions when it comes to pricing and royalties. We only publish audiobooks through ACX, the audiobook self-publishing arm of Amazon and they keep things very simple. 

First off, you don’t actually set your own price for the audiobook. ACX will set it themselves based on the length. Their general pricing guidelines are as follows:

• Under 1 hour: under $7
• 1 – 3 hours: $7 – $10
• 3 – 5 hours: $10 – $20
• 5 – 10 hours: $15 – $25
• 10 – 20 hours: $20 – $30
• Over 20 hours: $25 – 35

How long will your audiobook be? A general rule of thumb is that it takes roughly an hour to read 9,000 words. So if your book is 65,000 words, the audiobook will be roughly 7 hours and 15 minutes. 

ACX gives you two options for a royalty rate. You will get 40% of the retail price if you choose “exclusive distribution,” which means it will only appear on Amazon, Audible, and Apple. If you want it to be available on all audiobook platforms, you will get only 25% of the retail price. The vast majority of audiobooks are sold through their “exclusive” channels, so unless you have a compelling reason to do otherwise, we highly recommend choosing the higher royalty option. 

So, for example, if your audiobook is 5-10 hours long and the retail price is $24.00, your royalty will be 40%, which is $9.60. 

To recap: each version of your book and each platform you print it on will result in a different royalty rate. We recommend maximizing your royalties but always going for the highest percentage allowable, and pricing your book accordingly so that you’re getting the most out of your royalties. 

Not sure how to price your book? That’s okay. We’ve got you covered.