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Royalties explained

What you actually keep from a book sale, channel by channel, with the arithmetic done. The percentage is never the number you take home.

10 min read

The percentage is not the payment

Every self-publishing platform leads with a percentage, and every percentage is calculated on a different base after different deductions. A 70% royalty and a 60% royalty can pay you the same, or the lower one can pay more.

There are only four questions that matter, and you should ask them of any channel before you believe any headline figure.

What is the percentage taken of — the price the reader pays, or the price after tax, or the price after a discount to a retailer? What is subtracted afterwards? Who pays the printing? Who pays the postage?

Traditional publishing, for comparison

A traditional publisher typically pays a royalty in the range of 7.5% to 15% of the cover price for a hardback or paperback, often lower on discounted or export sales, and usually against an advance you have to earn back before you see anything further.

That sounds derisory next to a self-publishing platform's 60% or 70%, and the comparison is not fair. Out of their share the publisher pays the editing, the design, the printing, the warehousing, the sales force and the returns — and takes the loss if the book fails.

In self-publishing you keep the larger share because you are carrying all of that yourself. Which is the right deal depends entirely on how many copies you can actually sell.

Ebook royalties

Digital is the simplest case: no printing, no postage, no stock. The deductions are the platform's cut, tax, and on some platforms a delivery charge based on file size.

Amazon's Kindle Direct Publishing offers 70% or 35%. 70% carries conditions — a price band, and for Indian sales, enrolment in the exclusive KDP Select programme — and deducts a delivery cost of ₹7 per megabyte on Amazon.in. 35% has no delivery deduction and no conditions.

Selling the ebook directly from your own website keeps effectively all of it, less the payment gateway's fee, which in India typically runs around 2% to 3% of the transaction. The catch is that nobody arrives at your website by accident.

Print royalties: the printing cost is the whole story

With print, the percentage is almost beside the point. What determines whether you make money is the printing cost, and the printing cost is driven by page count.

Print-on-demand platforms calculate a royalty as a share of list price and then subtract what it cost to manufacture that copy. Amazon's current structure for paperbacks and hardcovers sold on its own marketplaces is 50% or 60% of list price depending on the price itself — 50% at or below $9.98 on Amazon.com, 60% at or above $9.99 — minus printing. Expanded Distribution to shops and libraries pays 40% minus printing.

Because printing is subtracted after the percentage, a long book at a low price can earn you nothing at all, or produce a price the platform simply refuses because it would not cover manufacture. This is why a 600-page novel cannot be a ₹199 paperback.

The breakpoint trap

Where a royalty rate steps at a price threshold, the step is a cliff and not a slope. On Amazon.com a paperback at $9.98 earns 50%; the same book at $9.99 earns 60%.

One cent of list price moves a tenth of the list price into or out of your pocket, on every copy, forever. At $9.98 you earn about $4.99 before printing; at $9.99 you earn about $5.99 before printing. A dollar a copy, for a penny.

If your intended price is anywhere near a threshold, price just above it. There is no version of this where sitting a cent below is the right answer.

Selling from your own website

Direct sales look like the best deal on paper and are the most work in practice. You keep the full price less the payment gateway fee, and you own the customer relationship and their email address, which is worth more over a career than the margin on one book.

What comes out of it: the cost of the copy, the packaging, the courier, and your time. Indian courier rates for a single book vary enormously by distance and weight, and if you offer free shipping you are paying it out of your margin.

Returns and damage are yours too. A book that arrives with a bent corner is a replacement copy and a second courier charge.

Tax: the deductions you did not price for

Two separate things take a bite, and neither appears in a royalty percentage.

United States withholding. Royalties from Amazon.com and some other Amazon stores are US-sourced and subject to 30% withholding by default. Completing Amazon's tax interview and supplying your PAN as a foreign tax identification number brings that down under the India–US treaty. Amazon shows your resulting rate in your own tax profile — look at the figure there, because Amazon does not publish per-country rates.

Indian income tax. Your royalties are income in India and taxable here as such. Section 80QQB of the Income Tax Act provides a deduction for authors on royalty income from certain books, subject to conditions and a cap. Whether and how it applies to you is a question for a chartered accountant, not a publisher — we are not qualified to advise you on your tax position and this page is not advice.

When you get paid

Later than you expect. Amazon pays royalties roughly sixty days after the end of the month in which the sale occurred, by electronic transfer, and accrues them separately per marketplace in each marketplace's currency.

There is no longer a minimum threshold for electronic transfer to an Indian account — Amazon's threshold table shows ₹0 for Amazon.in — though cheque and wire payments retain a $100 threshold, and a payment too small for a bank to actually send can still wait.

Direct sales from your own site are the fast money: the gateway settles into your account within days. It is the only channel where a launch week converts into cash inside the same month.

A worked comparison

Take one book: a 300-page paperback you intend to sell at ₹499, and an ebook of the same title at ₹249.

Through Amazon's print channel, the ebook on KDP Select at 70% of ₹249 less about ₹7 delivery earns roughly ₹167. Through your own website at ₹249 less a 2.5% gateway fee, about ₹243.

The paperback is where it gets interesting. Through a platform you earn a share of list minus the manufacturing cost of 300 pages — a figure you have to get from their calculator, because it depends on paper, trim and marketplace. Sold from your own site you keep ₹499 less the cost of the copy, the packaging and the courier, which for a domestic shipment leaves considerably more than the platform does, at the price of packing it yourself.

Which is why most authors who take this seriously end up running both: the platform for reach, their own site for margin.

Still looking for support?

If you would rather someone priced the book properly, ran the margins across every channel and set the listings up to match, that is what we are for. Reach us through our services.

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