Royalties: How do They Work When Self-Publishing E-books? - article

E-books are a great way for emerging authors to make their first splash, because e-book publishers don’t reject you. You also don’t need an agent to publish an e-book, so whatever you make is yours and yours alone (once the e-book retailer gets its split, of course.), Apple iBooks and Barnes and Noble’s Nook are examples of e-book retailers.’s e-book model is to give the author a whopping 70% of the sales, provided that the price of the e-book is $2.99 or higher. If the price of the book is less than $2.99, the royalty is 35%. Nook and the iBook store are similarly priced.

These companies should be distinguished from e-book service providers such as Lulu, which pays an 80/20 split. Service providers make publishing your e-book easier and quicker, with intuitive interfaces and step-by-step instruction. However, when publishing with Lulu and having Lulu “distribute” your work on Amazon or Apple or any other e-book retailer, (as opposed to just selling it on the Lulu site), the retailers’ commission will be subtracted before Lulu takes its cut. This means you’ll have the opportunity to sell more books, but your payout per book will be reduced.

There are several other e-book sellers and service providers, and more lining up to join the fray, but the common traits they all offer are a high royalty rate and a minimum selling price (Lulu’s is $1.24.)

Why are e-book royalties so high compared to traditional publishing? There are a couple of reasons why e-book royalties are so much higher than traditional publications. For one thing, the e-book publisher incurs virtually no costs. There’s no printing, marketing, distribution, editing etc. They’re simply providing a marketplace for authors to exhibit and sell their work. In addition, as an author, you set the price, and you want to set it so that you sell, sell, sell. It’s a quantity game in the e-book world.

Another reason e-books pay higher royalties for self publishing authors than if you go through a traditional publisher is because there is competition in the marketplace. More and more e-publishers and e-book retailers are trying to attract authors. Their business model depends on having a lot of content to offer to people like the business traveler with a Kindle or an iPad who’s about to board the 16-hour flight to Tokyo, the soccer mom who wants her kids to do more with their tablet computers than play video games, and that voracious reader who can’t wait for an elevator without cracking open a book.

Traditional publishers no longer have the industry in a hammerlock. Creativity has never been so valued, opportunity has never been more available, and that’s good for all of us.

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