The legal plight of authors
A five-part series of NOT legal advice by somebody who is confused
BOOK PRICING AND ROYALTIES
Hi and welcome back to my blog. If it’s your first time here, I hope you enjoy the post and consider visiting every week.
If you’ve hung on this long, you know this is the fourth installment of a series of posts regarding the legal problems, tasks, and tribulations all writers and, particularly, authors, face.
The very first thing I must point out is a disclaimer: I am not a lawyer. This is not legal advice. What follows are comments on what I have found scouring the internet, talking to published friends, and some insights from a couple of Q&A sessions I’ve had with actual legal professionals.
Forward, ho! As they used to say in Wagon Train.
You’ve written a book.
You hope it’s going to be a best-seller.
There, right in that short phrase, is the kernel that makes this post possible.
“A best-seller”. That means it outsells most other books in its genre, category, etc.
And you and I both hope that means it sells in the thousands of units each day.
Let’s posit a scenario.
You’ve written a (insert your genre here) novel. The word count is in the acceptable range for the genre (see my post at https://tjmanrique.com/2021/03/26/word-count/ for more details).
You have chosen to go indie. We talked about this last week.
You place your book in the “Big Five” so that it is available to buy “anywhere you get your books”.
You price it competitively, in the lower range, because you want it to sell well and in large numbers initially, so that it generates “word of mouth”, the best possible promotion.
Let’s use Amazon as an example, other commercial platforms will have their own version of this, but they are eerily similar, so we can use a “generic” example.
First, you must choose your price range, but it will also impact your royalty percentage. Obviously, we are not considering books you decide to list for free, since these will not generate income in the form of royalties. Please, be advised, that they can and do generate legal problems if you use portions of other books without permission. So, remember, just because you are not making money out of it, does not mean you can get away with using other authors’ characters, settings and worldbuilding. (I know, FanFic is another animal altogether, we will talk about that at another time).
So, then. Between 0.99 and 2.98 dollars, you get 35% royalties. It is more complex than that, but it works 99.9% of the time.
From 2.99 to 9.99 dollars you get 70%.
This is in the digital version of your book, the cost of the printed version will depend on many of your choices (paper quality, type of cover, etc.) and your royalties will be adjusted from the sale price you set.
Here your marketing strategy comes into play. Do you expect to sell more ebooks than printed ones? The other way around? It does have an effect on the net income you will receive.
In all cases, not just Amazon/Kindle, your taxes will be retained by the commercial entity.
The other consideration is that you will get paid according to the schedule they set up and only if you break certain barriers, that is to say, Amazon/Kindle has a minimum threshold for payment, via wire transfer or check, starting at US$ 100 for the US (other countries have different thresholds). This means if you are making 70% on a $5.00 book, you are making $ 3.5 per book. You need to sell at least 30 books for a payment to be generated. Furthermore, you will only get paid 90 days after the close of the month. So your January sales will be paid in March, February sales in April, and so on.
Can you live off your royalties? Sure. Some authors do. But they either sell a ton of books, or have an ample backlist, or both. Preferably both.
The page 20 Books to 50K (https://www.facebook.com/groups/20Booksto50k/) has many posts regarding their calculation. Essentially, they indicate that if you have 20 actively selling books in the market, you can make $ 50,000 a year.
Can you? Yes. You can also make more. And you can make less.
Remember. It’ll depend on how your books are selling, if they are part of series, which tend to bring in and keep readers for the duration of the series, if you have a loyal following of your stand-alone books, and many other considerations.
You must also be aware that your royalties are “gross income”. It is “before expenses” as it were.
You are a writer. You need to invest in a good computer, a writing program, utilities for your office (it doesn’t matter if you work from home or not), your business expenses (traveling, P.O. Box, internet service, mailing, editing, marketing, etc.) and, in theory, all of that should be paid for from your royalties. AND you should have some money leftover for coffee and doughnuts. Whew!
After all these, we know, then, that we must have a pricing strategy that will maximize the number of readers, but also give us the most royalties possible. Should our book be $9.99? Your debut novel? Probably not. You need people to come into your world and get to know you and your characters. Should you give it away for free or price it at $ 0.99? Depends. My personal opinion, no, you shouldn’t. There are readers out there, serious readers, that will not buy a free or 0.99 book. They expect it to be poorly written.
So, you might want to go in at $ 1.99 introductory price and raise it later. Or go in at $ 2.99 ( the accepted “minimum” for serious books) and raise it later. It depends on your marketing strategy.
You should always be aware of the delicate balance that requires the pricing of your books to be coherent and to make sense. You can “train” your readers to know that when you launch the newest book on a series, you put the first books all at $ 0.99. That will make your fans tell their friends “Hey, MY favorite author is coming out with the fourth book, you should wait and get all four at that time. The first three you can get for only $ 0.99 each. What a bargain!” Your royalties will be lower on the first three, true, but by then, you should have recouped costs on those and the income should be gravy.
Can you live off your royalties? Yes. Do most authors? Sadly, no.
There are a lot of books out there. The market is vast, but in order to make inroads, you need a good book, a good marketing strategy, and patience.
You must do a lot of calculations initially, to know where you are going, and to be able to have metrics you can evaluate to see if your marketing strategy is working and if your book is good enough to make the cut. I know, math, yuck, but it is necessary.
There you have it. Royalties. Was it what you were expecting? Would you like to know something else? Did I leave anything out? And, most importantly: was this useful? Let me know. I’d love to hear from you.
Thanks for reading and have a great day.