Self-publishing has become an increasingly popular avenue for authors to get their work out into the world. One of the most widely used platforms for self-publishing is Amazon’s Kindle Direct Publishing (KDP), which allows authors to publish both eBooks and physical books. However, one common question many authors have is what’s the percentage rate Amazon takes for publishing a book? Understanding Amazon’s royalty structure is essential for authors who want to effectively price their books and plan their profits. In this blog, we will dive into the specifics of Amazon’s royalty percentages for eBooks, paperbacks, and hardcovers and how you can maximize your earnings.
Amazon’s Royalty Structure for eBooks
Amazon offers two primary royalty options for authors who publish eBooks on KDP: the 35% royalty option and the 70% royalty option. The royalty rate you receive depends on the price of your book, as well as the distribution options you choose.
35% Royalty Option
The 35% royalty option is applicable when the eBook is priced below $2.99 or above $9.99. This option gives authors the flexibility to price their books higher or lower, but they sacrifice the higher royalty rate that comes with the 70% option. The key here is that Amazon’s royalty rate for books sold at lower prices (below $2.99) and higher prices (above $9.99) is capped at 35%.
70% Royalty Option
The 70% royalty option is available for eBooks priced between $2.99 and $9.99. This option provides authors with a higher royalty rate, but it comes with certain conditions. The 70% royalty rate is based on the book’s list price, which means that authors must ensure their pricing falls within the specified range to be eligible for this higher rate. Additionally, there are delivery costs associated with the 70% royalty option, which will be deducted from the royalty earnings.
Calculating Royalties for eBooks
Understanding how to calculate your royalties is crucial to managing your expectations as an author. For the 35% option, your royalty is simply 35% of the book’s list price. For example, if your eBook is priced at $1.99, your royalty would be:
- 1.99 x 0.35 = $0.70
For the 70% option, Amazon deducts a delivery cost, which depends on the size of your eBook file. The delivery cost ranges from $0.15 to $0.30 per MB of your file size. Here’s an example:
- Price of eBook = $4.99
- Delivery Cost = $0.15 per MB
- File Size = 2 MB
In this case, Amazon would take a portion for delivery costs and you would receive the remainder as your royalty:
- 4.99 x 0.70 = $3.49 (gross royalty)
- 3.49 – $0.30 (delivery cost) = $3.19 (net royalty)
It’s important to factor in delivery costs when using the 70% royalty option.
Amazon’s Royalty Structure for Paperbacks
When it comes to paperback publishing, Amazon’s royalty structure differs slightly. The royalty rate for paperbacks is fixed at 60% of the list price, but there are additional considerations.
Fixed Royalty Rate of 60%
Amazon pays authors 60% of the book’s list price for paperback sales made through Amazon’s marketplace. However, this amount is not entirely your royalty. Amazon deducts printing costs before paying out royalties. The printing cost depends on the book’s specifications, including its trim size, page count, and whether it’s printed in black and white or color.
For example, the printing cost for a 200-page black-and-white paperback might be $2.15. If the book is priced at $9.99, the calculation would look like this:
- List Price = $9.99
- Printing Cost = $2.15
- Royalty = 60% of $9.99 – $2.15
This leaves you with:
- $9.99 x 0.60 = $5.99
- $5.99 – $2.15 = $3.84 royalty per book
Example of Printing Costs Impacting Royalties
A higher page count or a color interior will increase the printing costs, which can reduce the overall royalty. Let’s say the book is priced at $14.99 and the printing cost is $4.50:
- List Price = $14.99
- Printing Cost = $4.50
- Royalty = 60% of $14.99 – $4.50
This gives you:
- $14.99 x 0.60 = $8.99
- $8.99 – $4.50 = $4.49 royalty per book
Amazon’s Royalty Structure for Hardcovers
Hardcovers, like paperbacks, also follow a 60% royalty rate on sales through Amazon’s marketplace. However, the printing costs for hardcovers are typically higher than paperbacks due to the materials used and the physical nature of the product.
Fixed Royalty Rate of 60%
Similar to paperback royalties, authors receive 60% of the list price for hardcover books sold on Amazon. However, because the printing costs for hardcovers tend to be higher than paperbacks, authors should expect their royalties to be lower per unit sold.
Printing Costs for Hardcovers
For a hardcover book, printing costs vary based on the page count, trim size, and whether it is a full-color or black-and-white print. A 300-page hardcover with a price of $19.99 might have a printing cost of $7.50.
The royalty calculation would look like this:
- List Price = $19.99
- Printing Cost = $7.50
- Royalty = 60% of $19.99 – $7.50
This results in:
- $19.99 x 0.60 = $11.99
- $11.99 – $7.50 = $4.49 royalty per book
Authors need to consider the higher printing costs when setting the price of their hardcover books to ensure they maintain a reasonable royalty rate.
Factors Influencing Amazon’s Royalties
Several factors affect the royalties you’ll receive from Amazon. These include pricing strategies, distribution channels, and file size, among others. Understanding these factors can help you make informed decisions to maximize your earnings.
Pricing Strategies
One of the key factors that influence your royalty rate is the price you set for your book. Books priced between $2.99 and $9.99 for eBooks, or books priced competitively for paperbacks and hardcovers, are more likely to fall under the 70% royalty rate for eBooks, or maximize earnings with paperback and hardcover royalties.
Distribution Channels
Selecting expanded distribution will distribute your book to a broader market, but it comes at the cost of a lower royalty rate. For example, with expanded distribution, your royalty rate may drop to 40% for paperbacks, instead of the standard 60% for Amazon-only sales. Authors should weigh the benefits of broader distribution against the reduced royalty rate.
File Size and Delivery Costs for eBooks
The size of your eBook file can also influence the royalty rate. A larger file size will result in higher delivery costs, which will be subtracted from your royalty earnings. If you have a large manuscript with high-resolution images, for example, you may want to consider optimizing the file size to reduce delivery costs and increase your earnings.
Pricing Strategies for Maximizing Royalties
The price you set for your book plays a significant role in determining your royalties. By choosing the right price point, you can take full advantage of Amazon’s royalty structures for both eBooks and print books. While Amazon takes a percentage of your sales, you have control over your book’s price, and that’s where smart pricing strategies come into play.
Setting the Right Price for eBooks
For eBooks, you want to set a price that falls within Amazon’s preferred royalty rate range. As mentioned, eBooks priced between $2.99 and $9.99 are eligible for the 70% royalty option, which provides a higher payout than the 35% royalty rate. However, finding the right price can be tricky. Set your price too high, and you might discourage potential buyers. Set it too low, and you may miss out on maximizing your earnings.
It’s essential to understand that pricing isn’t just about staying within the royalty range—it’s about market competition. Researching the pricing of similar books in your genre will help you find a sweet spot where your book remains competitive but also reflects its perceived value.
Pricing Strategies for Print Books
Pricing for print books, whether paperbacks or hardcovers, works slightly differently from eBooks. With the 60% royalty for print books, your royalty is directly influenced by the printing costs. You’ll need to price your print books high enough to cover printing costs and still generate a substantial royalty. However, be mindful of keeping the price competitive and appealing to your target audience.
To maximize print book royalties, you should consider:
- Offering a higher price for hardcovers compared to paperbacks.
- Balancing between cost and perceived value to avoid pricing out potential readers.
Choosing the Right Distribution Channels
When publishing on Amazon, you have the option to distribute your book only through Amazon or to extend your reach with expanded distribution. While expanded distribution increases the number of potential readers, it comes at the cost of a reduced royalty rate. Understanding when and how to opt for expanded distribution is crucial for maximizing your earnings.
Amazon Exclusive vs. Expanded Distribution for Paperbacks
When you choose to sell your paperback exclusively through Amazon, you get the benefit of the 60% royalty rate on the sales. However, if you opt for expanded distribution, your royalty drops to 40% of the list price. While the broader reach may seem tempting, it’s important to consider the trade-off in the royalty rate.
For authors who are confident in their book’s market appeal and want to maximize royalties, keeping the distribution limited to Amazon can be a profitable choice. But if you’re looking for a wider audience through other retailers and bookstores, expanded distribution is worth considering, even with the lower royalty.
Global Distribution and Amazon’s International Market
In addition to expanded distribution within the United States, Amazon offers global distribution, allowing authors to sell their books in international markets. This can significantly increase your book’s exposure and sales potential. However, royalty rates vary by region, and authors need to be aware of these differences when pricing their books for global audiences.
The royalty rates for international sales generally follow the same patterns as domestic sales, but taxes and delivery costs may reduce your overall earnings. When opting for global distribution, carefully consider the royalty implications in each market.
Understanding the Role of File Size and Delivery Costs for eBooks
While Amazon’s percentage rate Amazon takes for publishing a book is important, it’s equally crucial to understand the factors that affect the royalties you actually receive. For eBooks, Amazon deducts delivery costs based on the file size of your book. The larger your eBook file, the higher your delivery costs will be, and the lower your royalty payout will be.
Optimizing eBook File Size for Lower Delivery Costs
To ensure you are not losing out on potential royalties due to high delivery costs, consider optimizing your eBook file size. Larger files, especially those with high-resolution images or lengthy manuscripts, can quickly rack up delivery fees. The best practice is to keep your file size as small as possible without compromising the quality of the content.
Impact of Delivery Costs on 70% Royalty eBooks
For eBooks priced under the 70% royalty option, the delivery fee is deducted before the royalty is calculated. For example, if your eBook has a file size of 2 MB and the delivery fee is $0.15 per MB, your royalty would be reduced by $0.30. For higher-quality eBooks with larger files, these costs can add up and significantly impact your earnings.
Here’s an example:
- Price of eBook = $4.99
- Delivery Fee = $0.15 per MB (2 MB file)
- Royalty Rate = 70%
Your net royalty after delivery costs would be:
- 4.99 x 0.70 = $3.49 (gross royalty)
- 3.49 – $0.30 (delivery fee) = $3.19 (net royalty)
Optimizing your file size and paying attention to delivery costs can help ensure you receive the highest possible royalties.
Maximizing Your Earnings with KDP Select
KDP Select is an exclusive program that allows authors to increase their visibility and earn higher royalties through promotional tools. When you enroll your eBook in KDP Select, Amazon markets your book through promotional campaigns like Kindle Countdown Deals and Free Book Promotions.
Benefits of KDP Select Enrollment
- Increased Visibility: KDP Select gives your book increased visibility on Amazon’s platform through features like Kindle Unlimited (KU), which allows subscribers to read your book for free while you earn royalties based on pages read.
- Promotional Tools: You get access to promotional tools like Kindle Countdown Deals, which can help boost sales and visibility, particularly during book launches or seasonal promotions.
The Trade-Off with Exclusivity
While KDP Select offers significant benefits in terms of exposure, it requires you to exclusively distribute your eBook through Amazon. This means you cannot sell your eBook on other platforms like Barnes & Noble or Apple Books. For authors who want maximum distribution, this exclusivity may be a limitation. However, if maximizing royalties from Amazon is the priority, KDP Select can be a great tool.
Understanding Royalties for Audiobooks: Amazon’s ACX Program
In addition to eBooks and print books, Amazon also allows authors to publish and sell audiobooks through their ACX program. The royalties for audiobooks are slightly different from those of eBooks and paperbacks but are still crucial for maximizing your overall revenue.
ACX Royalties
ACX offers a royalty rate of 40% for audiobooks sold through Amazon and Audible. This rate is available for books sold on Amazon, Audible, and iTunes. Authors can choose between a royalty share (where they share a portion of the royalties with their narrator) or a pay-per-performance model, where they pay their narrator upfront.
The beauty of the ACX program is that it offers another revenue stream for authors, especially those who want to cater to audiobook listeners, which is a growing market. Just like eBooks and paperbacks, authors can still use pricing strategies to ensure the audiobook is competitively priced for the best return.
Final Thoughts on Maximizing Royalties
Now that you have a comprehensive understanding of what’s the percentage rate Amazon takes for publishing a book, the next step is to implement the best strategies to maximize your royalties. From pricing your eBooks strategically to choosing the right distribution channels and optimizing your book’s file size, every decision you make will have an impact on your earnings. By enrolling in KDP Select and using promotional tools effectively, you can also increase your visibility and boost sales.
Ultimately, being strategic with your pricing, distribution choices, and file optimization will help ensure that you make the most of Amazon’s royalty structure, allowing you to generate more income from your hard work.