Like any author, you must have had the same question. What are royalties and how can you earn royalties for your book?
Let us find out what is royalty in book publishing and how book royalties actually work.
WHAT IS BOOK ROYALTY?
In the simplest of terms, we can define a royalty paid book as a book wherein the author getsa certain amount of remuneration for the number of books that are sold.
The author is the sole copyright holder and the author gives exclusive permission to a publishing house to publish and sell their books.
The money earned from the sales is the author’s royalty and the author usually gets a percentage of the profits from the book sales and this percentage is agreed upon before the book is published.
Royalties can be seen most commonly in the traditional publishing industries and average royalties for a book can extend up to 25% or even more and it totally depends on the agreement between the author and the publisher.
Frankly, book publishing royalty rates can vary hugely depending upon the scenario.
HOW DO AMAZON BOOK ROYALTIES WORK?
There are different ways in which royalties can work and in the case of Amazon book royalties the author can earn up to 70% of the royalty if the book is pricedat more than ₹99. Although this should not be taken at face value.
There are two ways in which Amazon processes their royalties. One is for their e-book platform and the other for paperbacks.
When it comes to e-books, there are two tiersfor the percentage of royalty which varies from 35% to 70%.
When it comes to printed books, there are also two ways in which they work. If you choose the Amazon only distribution channel then you can expect royalties up to 60% of the price that is listed for every book sold. But if you choose to distribute it to non-Amazon dealers also then you can expect the royalty percentage to go down and be 40%.
Amazon is strictly a self-publish platform.
HOW DO TRADITIONAL ROYALTIES WORK?
When it comes to traditional publishing,royalty payment it is quite a bit different than self-publishing loyalties as author royalties per book can be calculated based on two steps.
Here are the two important types of royalty calculation techniques. Let’s find out how they are different from one another.
RETAIL SALE ROYALTIES
Retail royalties are perhaps one of the simplest ways of calculating royalties and retail royalties are also called list royalties.
Most traditional publishing houses and traditional publishers often opt for or prefer retail royalties over other types of royalties.
If the retail prices are fixed then the retail royalty percentage can be locked on. This is quite a bit different from the other type of royalties that we are going to talk about after this.
The percentage of retail realities on average tends to go between 9% and 15% on hardback cover sales and this percentage decreases when it comes to paperbacks to about 7%.
The payment is made usually after the sales have been done and the percentage of royalties is not calculated on the number of books sold but rather the percentage fixed based on the retail price.
During any royalties andafter any agreement there is a chance that you might get an advance payment for your royalties.
When this is the case then the royalty equation changes a little bit.
When you have been paid in advance then you can expect royalties only after the number of sales equal to your advance amount has been made.
Professional authors often opt for advance payments because this payment is their earning and goes into paying their bills.
NET SALES ROYALTIES
Net sales royalties are quite different from retail royalties.
As we have discussed in the previous point, royalties calculated in line with the retail amount of the book are called retail royalties but net sales are different.
Net sales royalties are royalties that are calculated when the number of copies sold is taken into account and the total list price of all the books is calculated including the discounts and everything is made and the average is calculated.
After the average has been calculated then a percentage can be decided. Net sales royalties usually take place after a certain sales milestone has been reached.
For smaller publications that milestone can be 100 books and for best selling publications that milestone can be a couple of thousand books.
The amount paid when net sell royalties are calculated is paid less often than retail royalties because these milestones take a long time to reach.
However, if you look at the plus point of net sales royalties, it has been found that the net sell royalty amount is usually more than retail reality amounts.
The con of this process is that author needs to wait a long time for the milestones to be reached to see any royalties.
PROFIT-SHARING MODEL
This is quite a new concept as compared to the traditional forms of book publishing loyalties.
In the traditional form, the royaltypercentage is usually calculated beforehand and the royalty percentage is usually a percentage of the list price of the book.
In the profit-sharing model, things work in a radically different manner. In this process, the self-publisher usually agrees with the publishing house to share profits.
This is more like a partnership model than are traditional book publishing model.
The self-publisher agrees that after the book has been published and the sales are done, the profit is usually divided between the self-publishing house and the self-published author and the percentage sharedwith the author is based on the profits meaning that they can get percentagesas high as 50 to 60%.
This is quite a different model from the traditional royalty model as the author is seen more as apartner than someone who needs to be paid.
PAYMENT METHODS
There are different types of payment methods that the authors and the publishers can agree to.
They can agree on simple and traditional payment methods like Bank deposits and cheques and other traditional methods. They can even opt for hard cash, although this is rare nowadays.
There are also a few unconventional methods of payment that a few authors agree on. Some of these unconventional methods can be that the author might ask for a few shares of the publishing house instead of payment in cash, this is usually the case with big multi-national publishers.
Authors can also ask for discounts or can even ask for that percentage model to be improvednext time they publish with that publishing house instead of payment or can even ask that their payment be paid to them in goldbonds or other forms.
Although we have yet to see any author ask for Bitcoins as their payment method but we won’t be surprised if some author does.
The publishing houses are generally quite flexible and understanding and accept whichever payment method the author agrees on.
This was the blog on royalties in book publishing and the different types of royalties there is. If you are an author who is curious about real and accurate figures and percentages on royalty sharing and profit-sharing as well as different types of royalty payments then we are here for you.
We are Orange Publishers and we are a full-fledged self-publishing book house and you can contact us to know what our royalty percentages are as you can assure you that they are the highest in the Indian book industry. We are a publishing house that ensures you will have a smooth sail throughout the publishing process as we are the fastest-growing book publishing company in India with decades of experience in the book publishing world.
