eBook Royalties Explained

There are a number of eBook distribution channels that will publish and distribute your eBook, but for the purposes of this blog entry I’ll just deal with two: Amazon and Smashwords. 

Amazon

When you publish with Amazon at the US dot com site your title will also be available in the UK, German, Spanish, French and Italian Amazon sites. Sales reports are generated from each of these sites.

Amazon provides two royalty options for publishers: 70% and 35%.

The 70% royalty option is available only under two conditions:

1.      The list price of the eBook is between $2.99 and $9.99

2.      The customer who buys the eBook is from the following countries: Andorra, Austria
Belgium,  Canada, France, Germany, Liechtenstein, Luxembourg, Monaco, San Marino, Switzerland, Spain, United Kingdom (including Guernsey, Jersey and Isle of Man), United States, Vatican City (as of Feb 1 2012).

Sales to customers outside these countries will be as provided under the 35% Royalty Option.

Therefore if an Australian purchases your eBook on Amazon, the royalty option automatically reverts to the 35% option.

Delivery costs – downloads

For every download of an eBook Amazon.com charges $0.15/MB.  The author pays for this. An average text-based book of 300 pages would be less than 1MB.

The following chart shows the author royalty share on a list price of $9.99.

At the 35% royalty, you can list your eBook from $0.99 to $200.00.  The following chart shows a list  price of $18.99. An author will receive about the same return listing their eBook at $18.99 as they will if they list at $9.99.

It is worth noting that Amazon will match competitor prices. If they see your title priced lower than their list price then they are allowed to match that price. Royalties in these circumstances are calculated on the sale price of the item, not your list price.

Smashwords

Smashwords retails eBooks directly to the public as well as distributing its eBooks to Apple iBooks (32 countries), Barnes & Noble, Sony, Kobo, Diesel eBook store and more). When you make a sale directly on Smashwords you take approximately 82% of the sale price. Smashwords has no restrictions on minimum or maximum list prices, unlike Amazon.

 When a distribution partner of Smashwords such as Barnes and Noble or Apple iBooks sells one of your books, Smashwords will give you 60% of the (sale price – GST). So if you book is listed at $9.99 then you will receive 60% of $9.00 or $5.40.

BWM Books does not charge any royalty fee when you work with us in publishing and distributing your book. You will receive 100% of net receipts from the retail outlets.