E-book Royalties For Writers: How Much Money Can You Typically Get?

Composing a top quality ebook is not an unproblematic task: it takes considerable time and energy to write a piece of work that is truly correct, to-the-point, as well as enjoyable to read. So unless you are simply writing for the fun of it, you have to cautiously weigh in what your options are in terms of your royalities, in order for you to really cash in your ebook. How much royalties you will receive is depending on a number of factors.

Of course, “payment” or “royalty” is not an entirely simple matter to talk about. Certainly, the concept of royalties is basically about the particular quantity of dollars or pounds sterling that you can get with a particular publishing agreement. But there are also alternate aspects of an agreement or contract that could be just as important, and possibly even more so. Such aspects can be, for example, the length of the agreement, the question about the exact time for payments, and so on.

However, in this present article I shall mostly address the total amount of money that you can be expecting from different types of royalty arrangements. Although there are many different types of agreements in the publishing world for writers and authors, I shall in this short article sketch out only four kinds of royalties: “list price percentage|, “net receipts percentage”, “net receipts percentage”, and “full list price”.

1. Publisher’s “List Price Percentage” Royalties

The “List Price Percentage” royalty model is perhaps the most “intuitive” of them all. This model is used when writers approach major publishing houses to market their ebooks (or even ordinary books). This royalties model basically boils down to that the author will receive a certain percentage of the ebook’s (retail) list price. The precise percentage typically varies between 10 and 20 %.

For example, if the royalties agreement is such that the writer gets 10 percent of the $20 his or hers ebook is sold for, the writer would get a royalty of $2 per book (0.10 x 20).

This type of royalties model has formerly been used at leading publishing houses such as Random House and Simon & Schuster. However, these publishing houses have now migrated to the second royalty model, the “Net Receipts Percentage”.

2. Publisher’s “Net Receipts Percentage” Royalties

Another royalty model is the “Net Receipts Percentage”, or the “Net Proceeds Percentage” model, which may be applicable when authors are trying to get a deal with major publishing houses to publish and market their e-books. Presently, a number of publishing houses use this royalty model, including Macmillan, Random House, and Simon & Schuster.

In this scenario the author will receive a certain percentage of the net sales of the ebook. The exact percentage normally amounts to between 10 and 25 per cent of the net sales.

For instance, if the royalties agreement is such that the author gets 20 per cent of the net proceeds, then the calculation may look something like the following. If we assume a list price of $25, and also assuming that the net sales for the publisher is, say, 60 per cent of the list price (i.e., the retailer gets 40%), the author would get a royalty of $3 per e-book (0.20 x 0.60 x 25).

3. Self-Publisher’s “Flex-Price Net Receipts Percentage” Royalties

A third alternative could be to publish your ebook all on your own, but still use one or a number of retailers and distributors to market and sell it. For instance, you can use distribution channels such as Lulu.com.

In this set-up the author will obtain a certain percentage of the net sales of the e-book, and in that sense it is quite comparable to the second model above, the one named “Net Receipts Percentage”. However, even if the royalties models are similar, the “Flex-Price Net Receipts Percentage” has the major advantage that your share per book will be radically higher, assuming that you will sell your e-book for more than simply a dollar or two.

Another great difference is this. Since you are self-publishing your product, you can actually decide yourself what the list price should be. Because of that you will have extra flexibility in terms of picking a product price that can bring in maximum royalty.

4. Self-Publisher’s “Full List Price” Royalties

A fourth option is to do everything on your own. In that case you will be responsible for not only the publishing of your e-book but also the promotion and marketing, as well as the sales. This means that you almost certainly need to have your own website through which you promote your product or products.

Note, though, that you do not necessarily have to have a very complex and expensive e-business architecture integrated with your website. You may very well instead utilize a simple system such as the payment processing used by paypal.com, or other similar systems.

In any case, the sum of royalty to be estimated from this fourth scenario is fairly easy to estimate, as you can keep all the income for yourself. Logically, however, depending on the exact solution you are using, you may wish to adjust the figures, in order to properly account for costs related to services such as your site hosting or your payment processing, etc.

Final remarks

It might not be very easy to decide which royalties model works best for you. One consideration may be, for instance, how interested you are in marketing. If you are very interested in marketing your own e-book online, then royalties models 3 and 4 may very well work for you.

However, if you are essentially an author, and not so attracted to internet marketing, it may not be a bad idea to first look at the first and second royalty models. The downside with these two royalty scenarios is, however, that it may not be so easy to get published; but if you don’t get lucky, you can always try models three and four afterwards.

ABOUT THE AUTHOR: Johnny Jones has a background in project management and publishing, and is currently a contributor to the EbookBrothers.com website, where he writes about ebook marketing, inluding topics such as e-book royalty etc.

For a free subscription to the EbookBrothers.com Newsletter (with free e-articles, tips and tricks on how to create, write, and market ebooks online), visit http://www.EbookBrothers.com today.