August 05, 2009

Royalties Based on List Price vs. Net Profit

Angela,

I'm feeling a little stupid - I read on your website that iUniverse gives authors only a 20% royalty for a book sold on Amazon. However, if I understand correctly, your royalty (for wholesale orders) is only 15%, which is even less. What am I missing??

Sometimes, authors don't read the fine print and end up earning far lower royalties than they thought they would.

The iUniverse royalties are based on the discounted price of the book, not on the list price.

iUniverse -
List price $15.95
Amazon discount 36% (-5.74)
Discounted price: $10.21
Royalty: 20% of discounted price = $2.04

(The example above was taken directly from the iUniverse website.)

BookLocker
List price: $15.95
Royalty 15% of list price = $2.39

BookLocker's royalties are ALWAYS based on the list price so authors always know how much they'll get, right from the start, from each sale. BookLocker pays 35% of the list price for public sales through BookLocker.com.

Authors should avoid doing business with POD publishers that pay royalties based on their net profit...because it's almost impossible for the author to figure out exactly how much they'll make in the end. Since the author has no control over the publisher's alleged production costs, they shouldn't be forced to accept royalties based on those varying factors.