Book Royalties: What They Are and How to Earn the Best Rates

As a new author looking to publish your first book, you’ll encounter a lot of decisions and processes. Whether you choose self-publishing or you want a traditional book deal, one of the most important things to understand in this process is book royalties and how they work. This will affect your decision regarding which publishing method to choose, as well as the format of the book you want to publish.

To help you make such decisions, we will discuss in this article everything you need to know about book royalties, and how to get the highest rates in today’s publishing industry.

book royalties

What Are Book Royalties?

The term “book royalties”–in both self-publishing and traditional publishing–refers to what authors earn from every copy of their books that gets sold. This royalty is calculated as a percentage of the profits from these book sales, and it differs significantly depending on the chosen publishing model. This percentage is paid to the authors as compensation in exchange for the rights to sell their books.

In the case of traditional publishing, this percentage is paid by the publisher to the author after the advances are covered. As for self-publishing, it’s paid for by the digital publishing platform that the author chooses.

Read more: Self-Publishing vs Traditional Publishing: Which Route Should You Choose?

How Do Book Royalties Work?

The way book royalties work differs hugely depending on the publishing model you choose. Whether you go for traditional publishing or self-publishing, each of these approaches operates differently when it comes to compensating authors for their work.

How Book Royalties Work in Traditional Publishing 

When an author signs a contract with a traditional publisher, they usually negotiate and agree upon specific royalty rates and an advance first. This advance is an up-front payment that the publisher pays the author against future royalties; the author doesn’t get any royalties until enough sales are made to cover the advances. Once the advance is covered, the publisher calculates and pays the royalty dues, usually every six months–but this can differ from one publisher to another.

With that said, sometimes authors have the option to pay back their advances and receive higher royalty rates. For example, an author might choose to pay back their advance (or a portion of it) to increase their royalty rate from 10% to 15%. This decision involves a trade-off as authors sacrifice immediate income (the advance) for potentially higher long-term earnings (through increased royalties). However, this can be a risky move since there is no guarantee that the future royalties will surpass the paid-back advance or that they’ll earn more money afterward.

Types of Royalties in Traditional Publishing

It is important to know that there are two main types of royalties that traditional publishers pay authors. The first is known as retail royalties (or list royalties), and that is a percentage of the retail price of a book that authors receive with every copy that is sold. This is the most common type, and it is usually paid every 3 months

There is also another type known as royalties on net sales, which is a percentage of the publisher’s net sales of a book. This percentage is calculated after accounting for the discounts given to retail stores by the publisher. This type of royalties is usually much lower than the retail royalties.

Generally speaking, authors benefit more from retail royalties as the list price is the highest amount at which a book is sold. With that said, it is important to note that royalties on net sales can be more beneficial in some cases, such as when a book is sold at a huge discount.

How Royalties Work in Self-Publishing

In self-publishing, the concept of royalties differs significantly because advance payments are not provided. Instead, the author benefits from higher royalty rates from each book sale. Authors typically receive these royalties once a month, provided they’ve reached the agreed-upon sales threshold during that month for the publishing platform to process the payment.

How Much Royalties Do Authors Get?

You might be thinking that since the author made the maximum effort in bringing their book to life, they would be able to reap all the profits. Unfortunately, this isn’t the case, neither in traditional nor in self-publishing. Here is a more detailed look at how much royalties authors get in both of these publishing methods.

AverageTraditional Publishing Royalties

The publishing royalty, or the percentage of revenue paid to authors, can vary depending on the publisher and book format. Even though many publishers offer standard royalty rates, this percentage can be negotiable, especially if you are an established author or have previously published a best-selling book. So whether you have an agent or you have signed directly with a publisher, make sure you’re getting the highest possible royalties.

As for the average book royalties in traditional publishing, they are usually as follows:

  • 10% – 15% on hardcover sales
  • 5% – 7.5% on paperback sales
  • Around 25% on ebook sales
  • Around 25% on audiobook sales

Let’s look at an example to better understand what these rates look like in real life, and imagine how much revenue you can get from your traditionally published book. Let’s say the paperback edition of your book is sold for $10 and you have signed a contract with 5% royalties. This means you get 50 cents for each book sold. So for each 1000 thousand copies sold, you’ll earn $500 in royalties.

Some publishers also choose to offer their authors graduated royalties; in which case your earnings increase as the number of books sold rises. Here is an example of how it can go:

  • 10% for the first 5000 hardcover copies sold
  • 12% for the second 5000 hardcover copies sold
  • 15% for every hardcover copy sold after that.

Average Self-Publishing Royalties

The model of book royalties in self-publishing is much different than that of traditional publishing. For starters, self-published authors receive much higher rates than traditionally published ones. They either receive these royalties immediately after each sale or they receive the consolidated amount once every month, depending on the publishing platform. This means they get to earn a lot more from self-publishing their books.

The royalty rates in self-publishing differ from one platform to another and from one book format to another. Here are the typical rates you can expect to get from self-publishing your book: 

  • 35% – 70% for ebooks (100% on Kotobee Books for a limited time)
  • 20% – 80% for audiobooks
  • 30% – 60% of print-on-demand books

How Long Do Book Royalties Last?

While the duration of book royalties in traditional publishing varies depending on the contract, it typically lasts for the life of the copyright (often 70 years). After the author passes away, the rights and royalties are passed down to their heirs or beneficiaries. So it is important to carefully review the terms of the publishing contracts and, if needed, seek legal advice to ensure a clear understanding of your rights.

As for self-publishing, the book royalties last for as long as the book is being sold. So technically, as long as there are readers purchasing your books, you will continue to receive a share of the sales revenue.

traditional vs self-publishing book royalties

How to Earn 100% Royalties for Your Books

Now that we’ve covered the average royalty rates available in today’s publishing scene, you might be wondering; is there a way to publish your book for free and still earn 100% royalties? As a matter of fact, there is! All you have to do is get your manuscript ready for digital publishing, then go ahead and publish it on Kotobee Books.

Kotobee Book is a free digital publishing platform that aims to spread the love of reading and make books easily accessible to everyone. Supporting both static and interactive ebooks, authors find this platform ideal for reaching their target audience and earning high profits.

Not only does Kotobee Books offer the highest royalty rates, but it is super easy to use and offers many other benefits. For example, it allows you to publish your ebook in a matter of minutes and reach thousands of readers around the world

Here’s all it takes to publish your book and gain 100% royalties for each book sold:

  1. Sign up for a free author account on Kotobee Books.
  2. Click on the “Add your first ebook” button from your account dashboard.
  3. Upload your book and add all the necessary information.
  4. Once done, press the “publish” button.
  5. In just a few minutes, your book will be available for sale on Kotobee Books, and you can gain 100% of its royalties!
Kotobee Books

Final Thoughts

Writing and publishing a book requires significant time and effort. Understanding how book royalties work is crucial to maximizing your revenue for the effort you’ve invested. Fortunately, by selling your book through Kotobee Books, you can retain all the profits without sharing them with anyone. So, prepare your manuscript for publishing and reap the maximum benefits in today’s industry.


Read More

How to Publish a Book for Free and Maximize Your Profit

How to Start an Online Bookstore: A Step-by-Step Guide

Successful Book Launch Tips and Tricks for First-Time Authors

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