Royalty in Self Publishing v/s Traditional Publishing
Quite often, I hear this doubt from writers - How much royalty would I get for my book? How much is this royalty amount as compared to what traditional publishers offer?
Let us discuss about the questions one by one.
First, royalty/author profit is the amount one gets on the sale of each book. Royalty might or might not be a direct percentage of the MRP (Maximum Retail Price) of the book.
In case of publishing an ebook, one gets royalty as a percentage of the Selling Price one fixes. For example, we have 35% and 70% royalty on the selling price on Kindle. Or say, 45% of the selling price is what you would get on Google Play. Ebooks do not have any upfront cost as in the case of print books – printing cost, packaging, shipping, etc. The percentage commission of the publishing platform is their margin for facilitating the entire set-up to authors.
In case of printed books, printing cost, packaging, shipping costs are incurred while selling them apart from the commission of the ecommerce platforms that enable online selling of the printed books. So the profit that remains after deducting all these costs goes to the author. This method of calculating royalty is prevalent in self publishing.
In traditional publishing, royalty is a fixed percentage – say 8% of the MRP.
Few points to note here are –
1. In self publishing, MRP is confirmed by the author. In traditional publishing, it is the publisher who decides the price.
2. In self publishing, royalty is not a fixed percentage of the MRP i.e. since the cost part is fixed, a higher MRP would imply a higher royalty amount and thus a higher royalty percentage, which in traditional publishing is fixed – say 8% of the MRP (whatever it might be)
3. There is lack of transparency in terms of no. of sales recorded by traditional publishers as compared to the actual sales that might have happened.
4. In self publishing, monthly sales data is fetched from the sales channels and reported to the authors providing complete transparency in terms of sales.
One might argue that books are sold offline in traditional publishing with 50% commission involved. Hence the royalty amount can’t be matched for offline and online sales.
Say, you aim to sell 500 copies (@ Rs. 300 with Rs. 95 as royalty) in two years via self-publishing mode, with complete transparency.
You can earn – 500*95 = Rs. 47,500/- in two years
Considering traditional publishing with far wider reach of the book, one would expect minimum 500 copies sold in one year and 1000 in two years.
You would earn – 1000*24 = Rs. 24000/- in two years
If the reports are transparently shared with the author, you would get 24k as royalty in two years. You can very well estimate the difference between the two models.
If your book deals with a niche topic but with wide readership, little competition and a trending topic, you can very well decide which route to choose to publish your book.
All the best.