The royalties you will receive are one of the most important pieces of choosing a self-publisher. A company can offer great customer service and a huge selection of book cover art or a free book cover designer, but if they don’t pay you well for your sales, what’s the point? Truly understanding this aspect of a company can also be misleading as well as confusing for the uninitiated. You’ll need to do careful research and keep your eyes tuned not to the percentage, but to dollars. I find it’s best to flat out ignore those percentages. They mean nothing and I’ll tell you why.
The Devil in the Details
In my experience, the more they claim to pay in percentage, the more they take out before they calculate it and the less you get in the end. Shooting for a company that his a high percentage royalty is almost a sure way to make nothing. It sounds counter-intuitive, but consider this: 75% can be half as much cash in your wallet as 50%, depending on how many expenses are removed before they calculate that percentage. By design, every company calculates royalties a little bit differently, so you can never make any assumptions. Understanding the calculations of one company will tell you nothing about the other. A 30% advertised royalty payment doesn’t say 30% of what amount. Before royalty is calculated for your book, the discount given to retailers (as high as 65% and as low as 40%) will be removed first. Also, the cost of printing the book will be removed, leaving little to base the 30% on.
Here’s an example of what I’m saying.
Retail Book Price: $16.95
Minus 40% Discount for Retailers: -$6.78
Subtract Printing Cost: -$4.50
Profit remaining: $5.67
30% Royalty on $5.67: $1.70