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Book Royalties

by Ron Kurtus (12 January 2007)

Book royalties are the payments your publisher will pay you, based on the sales of your book. As the sales go up, often the percentage rate increases. Knowing the rate gives you an idea of how much money to expect from your book.

The royalty rate depends on whether your book is a hardcover, softcover or paperback book. The reason the royalty rate is not higher is because the publisher must cover financial risks and must also discount the book to the bookstores.

Questions you may have include:

This lesson will answer those questions.



Hardcover books

Typical royalties paid to the author for a hardcover book are 10% of the cover price for the first 5000 books sold, 12.5% of the cover price for the next 5000 sold, and 15% for all books over 10,000 sold.

That means for a book selling for $25, you would get $2.50 per book sold for the first 5000 books sold. If 15,000 of your books were sold, you would get royalty payments of $12,500 + $15,625 + $18,750 = $46,875. That isn't bad for only 15,000 books sold.

To put this into perspective, if all those books were sold on Amazon.com in one year, your book would rank about 200 in their ranking system.

For a $20 hardcover, you would be getting $2 to $3 per book sold, depending on the sales.

Softcover books

Softcover books include trade or quality paperbacks and mass market paperback books.

Trade or quality paperback

Trade paperback include business, self-improvement and other nonfiction books.

The typical royalties paid on a trade paperback are lower than those for a hardcover. The typical royalty is 7.5% of the cover price. For example, a book that retails at $15.95 would give you $1.20 per book sale in royalty payments. If the book sold 50,000 copies, you would make $60,000.

Mass market paperback

Mass market paperbacks, typically are fiction novels. Some originally started as hardcover books but many more are directly published as paperbacks. Examples are murder mysteries and romance novels.

Royalties on these books is typically 10% of the cover price. Thus, for a $5.95 paperback, you would get $0.60 per book sold. If the book was popular enough to sell 100,000 copies, you would make $60,000.

The reason the mass market paperback royalty rate is higher than the trade paperback is because mass market books sell more and are thus a lower risk.

Why so low?

Beginning authors often wonder why the profit or royalty payments on their books is so low. 10% does not seem like much.

One reason is that the publisher sells the book at a discount to wholesalers or distributors, who then sell the books to bookstores. The standard discount is 55% of the retail price. In other words, they sell each $25 hardcover book for $11.25, each $15.95 softcover for $7.18 and each $5.95 mass market book for $2.68.

Besides that, the publisher had to pay for the cost of formatting and printing the book. Also, if the books don't sell, the wholesaler is allowed to return the books to the publisher. So, there is a risk factor that must be taken from the royalty payments.

Is is possible that few books are sold such that the author gets minimal royalty payments and the publisher takes a loss on the title. Or, the book may become a best-seller with sales of over 500,000 in a year, netting the author up to $2,000,000.

Summary

Book royalties are the payments your publisher will pay you, based on the sales of your book. The royalty rate depends on whether your book is a hardcover, trade or mass market book and can vary from 7.5% to 15% of retail price per book sold. The reason the royalty rate is not higher is because the publisher must cover financial risks and must also discount the book to the bookstores.


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Resources and references

Ron Kurtus' Credentials

Websites

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Books

Top-rated books on Fiction Writing

Top-rated books on Non-fiction Writing


Questions and comments

Do you have any questions, comments, or opinions on this subject? If so, send an email with your feedback. I will try to get back to you as soon as possible.


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