Dec
16

7 Facts about Self-Publishing Royalties and Print-on-Demand

By on December 16th, 2010

Book promotion expert Lynn Serafinn from Spirit Authors shares her tips on what every first-time author should know about royalties, retail price and printing costs before they self-publish a book.


Recently, in one of my LinkedIn Groups, a new author asked, “Does anybody have experience with self-publishing companies and the way they pay royalty fees?” I thought the answer to this question was something many new authors would like to know, so I thought I would share my response with my Spirit Authors readers. Below is a copy of the post I made on December 15th, 2010.

Hi there LinkedIn,

Here’s a breakdown of how most self-publishing royalties work:

By self-publishing companies, I assume you mean “publishers” such as iUniverse (probably the most known, but really only one of many) who set up your book to be distributed via print-on-demand (POD). The company I used for my first book is a small company called Authors Online – http://authorsonline.co.uk. I chose them because they are a small friends-and-family run company who take good care of their clients.

The POD press most often used is a company called Lightning Source. There are 2 major Lightning Source plants (when I last checked), one in Kentucky and one over here in England in Milton Keynes.

These kinds of companies don’t generally get your books into shops, but rather focus on Amazon, B&N, etc. The self-publishing publisher sets up your ISBN and arranges for your book to appear on all these online retailers. But be SURE you read the fine print. I had a scenario not very long ago when one of my clients went with Create Space (Amazon’s own print-on-demand publishing company) and they did NOT place the book on all 6 (now 7) Amazon sites throughout the world, cutting down SIGNIFICANTLY on my client’s sales. So be sure you ask if the company GUARANTEES you will be on all Amazon sites… but (if your book is in English), most especially Amazon US, Canada and UK.

Ok, so here are 7 facts about self-publishing and typical royalty structures:

1) Amazon buys your book for 45% of the retail price. That means, if you book retails for $10, Amazon pays your publisher $4.50 (not you… unless you actually START a publishing company and are selling the books directly to Amazon).

2) From that $4.50, your publisher subtracts their printing costs. Not sure of what they are in the US, but here in the UK, the costs are typically 1p (let’s say 2 cents) per page, plus 70p (let’s say $1.25) for the cover. So a 100 page book would cost $3.25 to print (don’t quote me on the exact figures; these were current as of 18 months ago in the UK. DO ask your publisher these questions).

3) If the book costs $3.25 to print, and you have received $4.50 from Amazon, it means your NET is $1.25.

4) Most self-publishers do a 50/50 split of the net, or in that ball park. That would mean your royalty per book sold is a whopping $0.67. Most payouts are quarterly, starting 4-6 months after publication.

5) Of course, you could also set the retail price higher to ensure you get a higher royalty. The best thing to do is to go online and check out similar books in the same niche, and check out their page count, and see how much their retail price is. Bear in mind, that Amazon will normally sell you book for LESS than retail, but you will still receive 45% of retail unless you tell them you are willing to take less in order to drive up sales (not recommended for first-time author, frankly!).

6) If you go FULLY self-published (i.e., set up your own ISBN, deal with Lightning Press, etc), then your royalty is 45% of retail. Subtract your printing costs from that, and that is your net profit per book. That is what I am doing with my next book.

7) Last option: getting the books printed in bulk (most do this overseas) can drive the cost per book WAY down, but you have a massive front-loaded investment at high risk because the minimum run is usually 1000 books or more to get a good price. PLUS you have the set-up costs, as it is not the same as digital POD. Any time I have seen new authors do this, they end up with a house full of hundreds of unsold books, and feel very discouraged. I don’t recommend it unless you have a solid promotional platform and good distribution set up. ALSO, bear in mind that if you go this route, book distributors tend to take the books on consignment and they don’t pay anything if the books don’t sell. And who do you think is responsible for the marketing? You guessed it – you. Furthermore, they might take 300 books from you when they first come out, but they can RETURN every book that hasn’t sold (or worse–been returned to the retail shops!) after a certain period of time.

BTW, I help self-published mind-body-spirit authors via my site Spirit Authors at http://spiritauthors.com. I’m re-opening Module 3 on self-publishing in February 2011. The course for writing your book (Module 1) and building your online platform (Module 2) are already available. You can take a 7-day test drive of those courses for only $1.

I also do full-service Amazon book launches at http://spiritauthorscoach.com. Drop me a line if you would like to chat.

Warm wishes,

Lynn Serafinn


About Lynn Serafinn, Creator of Spirit Authors

Lynn Serafinn

Lynn Serafinn is a transformation coach, book promotion coach, radio host and bestselling author of the book The Garden of the Soul: lessons from four flowers that unearth the Self.

Her upcoming book, The 7 Graces of Marketing, is coming in June 2011.

She also works as a campaign manager for mind-body-spirit authors and has produced several top-10 book campaigns, including FOUR #1-sellers, in 2010 alone. She created Spirit Authors to offer training, coaching, business-building and inspiration for mind-body-spirit authors, whether established or aspiring. Contact Lynn about YOUR book project at at http://spiritauthors.com/contact.

Be sure to subscribe to this blog for regular book writing and promotion tips (just fill in form at right of your screen).

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Comments

comments

Comments

  1. Thank you very much for the information regarding royalties, etc., that appear on your website. I would like to connect with you for some additional guidance; your knowledge of the “system” supersedes mine by a wide margin.
    Thanks again for the free tutoring.
    Sincerely yours,
    Allen Morris/aka Ace Abbott

  2. […] Some people might at this point intervene and claim that not everyone is having an ebook reader, and that the best choice of publishing is the printed traditional way. If you consider this to be true, I want you to read this article about how the usage of ebooks in Russia is spreading. Anyone who, like me, has been travelling with the metro in Moscow surely remembers what the travellers are doing on their way to and from work. They don’t text their friends. They don’t play games on their smart phones. They read. They read mostly books. And now they use ebook readers. If not yet discouraged from the idea of a paperback edition of your book, read what Lynn Serafinns, a once first-time author, is advicing other newcomers to do. […]

  3. My (independent) publishers used CreateSpace to produce the first paperback version of my book; had I known this, I’d have been less excited about having a contract with them. I urge other writers to thoroughly check which press is involved, especially when signing up to an independent / online publisher.

    I’ve since self-published via Lulu.com. The revenue per book is slightly higher than Amazon, but the cost for the consumer is higher and includes postage, which is often off-putting.

    Thank you for your guidance on this. You’ve prompted me to shop around :)

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