Publishing

What DO authors get paid?

The Lesbian and Bi Women Fiction survey that I am currently running has thrown up a lot of interesting comments from readers of the genre. One thing that has come up a lot is a desire from readers to purchase books from distributors who pay authors a little more than others.

As an author, I’m touched to hear this and am really appreciative of readers who want to ensure that all our authors get that little bit extra. Especially as we operate in such a small market where sales volumes, and therefore income, is so low.

But it’s clear from the results of the survey that people aren’t entirely sure how royalty structures work nor which distributors pay authors the most.

I thought I’d blog about royalties to explain how they work and how authors get paid different amounts depending on a wide variety of factors.

Firstly, I’d like to clarify some terms. Some of these may seem obvious to you, but I’m seeing confusion from readers regarding some publishing jargon.

Traditionally published vs Indie published

I blogged about this in a little more detail recently, but in a nutshell, a traditionally published author is someone who works with a publisher (regardless of their size) to create their book. The publisher will pay all costs associated with creating that book and will hold the rights and often have final say on the product.

An Indie (independent) manages everything themselves. They hire professional editors, cover designers, formatters, and whoever else they need. Indies pay their own money to publish their books.

Side note: A publisher who asks the author to pay money in order to publish their book is a vanity press. Avoid these at all costs, they often know nothing about publishing and are actually just printers trying to sell expensive print runs.

Publisher

Some publishers within the lesbian fiction genre include; Bold Strokes Books, Bella Books, Ylva Publishing, Heartsome Publishing, and more. These are publishing houses and not retailers, although they all do also sell books.

Distributors

A distributor is simply a company that distributes a product. In the publishing world, a distributor would be a website such as Amazon, iTunes, Kobo, Nook etc.

Royalty Rates

How much an author gets paid changes massively depending on how and where they are published. There are no concrete rules when it comes to published author royalty rates, every publishing house is different. Although, it is generally recognised that lesbian publishing houses pay more than most of the bigger mainstream houses. This is because of the very small size of our market in comparison to even small mainstream genres. Simply put, if these publishing houses didn’t pay more – we wouldn’t have any authors, and therefore no publishing houses.

Often publishers will pay different rates depending on distribution channel, this is because different amounts are received depending on the distributor. For example, a publisher may pay an author 20% per eBook sold, unless the book is sold through the publisher own website and then they will pay 25%. (These are made up figures, for example only!)

The reason for this is that the publisher will receive the whole amount of the sale price when the purchase is made through their own website, but they will only receive a percentage when the sale is made elsewhere.

Here’s an example:

Let’s say a book costs $7.

First, we’ll run an example based on a traditionally published author, with a royalty scheme as per the above.

One book sold through the publisher own store would pay the publisher $5.25 and the author $1.75. (Note these figures aren’t quite exact as a small fee might need to be taken off for card processing software and stock management software).

If we look at the same example, but this time the book was sold through Amazon, this is how it would add up. The publisher would receive $3.50, the author would receive $1.40, and Amazon would receive $2.10. (Note these figures may change depending on if the author’s contract is gross or net of the sales price.)

Of course for an Indie author, this is quite different because they get all of the pie. A book sold at $7 on their own website will produce $7 income (minus any costs). A book sold on Amazon will pay the Indie author $4.90 while Amazon keeps their $2.10.

Amazon pays out 70% royalty rate, they keep 30% for their costs (on books priced between $2.99 and $9.99) and this is actually better than a lot of other distributors who charge 40%. However, Amazon doesn’t always pay out 70%, there are many times when they pay out 35%. India, Japan, Brazil, and Mexico are the four countries that have an Amazon presence but still only pay out 35% due to taxation agreements.

But wait, there are many other times when 35% will be paid. For example, if a customer is based in New Zealand, and they purchase an eBook from Amazon.com then the payout will only be 35%. This is because that customer is not using their home Amazon store and therefore Amazon will take a much higher percentage to deal with the administrative paperwork and the double taxation agreement. All purchases by customers who don’t have a home Amazon store and buy from Amazon will only pay out a 35% royalty rate.

Many traditional lesbian fiction publishers don’t bother to factor in the 35% royalty rates when calculating author royalties. So, this is a situation where traditionally published authors are subsidised by the publisher. The $7 book will only produce a $2.45 income for the publisher, but they will still pay the author the $1.40 rate. (Unless the author has signed a net sales price agreement, then the publisher might pay considerably less.)

Whereas an Indie author who might usually receive $4.90 would only receive $2.45 if a purchase came through Amazon.com rather than the Amazon store local to the buyer (if there is one).

Reviews

Many readers will buy on Amazon.com in order to write a review on the primary Amazon site. As I’ve discussed many times before, reviews are essential for visibility and without reviews, a book will slip down the charts and into obscurity.

Complicated

The question of what authors get paid per book, is a complicated one. It depends on a number of factors. But there are some takeaways to be had. Going direct to a publisher means the highest author royalty, and it also pays the publisher more money. But, as with everything, there are exceptions. Bella Books is a distributor as well as a publisher. If an author with Ylva Publishing sells a book on Bella, they will be paid less than if that same book was purchased directly from Ylva. I know, I did say it was complicated.

Paperbacks

Another factor to consider is that not all editions of a book are paid equally. Paperbacks, while lovely to have in your hand, cost a lot to make. Because of this, the royalty rate paid by publishers to authors is much less, often between 5%-10%.

Another example: when you buy a $17 paperback, the author is only going to receive between $0.85 to $1.70.

In summary

At the end of the day, royalty payments are a complicated subject with plenty of factors to think of. If you do wish to support authors more through your buying decisions then going directly to the publisher or the author is the best way to do it. However, a sale is a sale and I know all authors are appreciative of all sales no matter where they originate.

If you have any questions about how royalty structures work, put them in the comments below!

 

 

2 Comments

  • Annette Mori

    Nice blog. The other factor in this equation is that although going directly to the Publisher gives the author a higher amount, that sale does not count in Amazon’s formula and help push the ranking…and unfortiunately ranking helps to sell more books…yes it is complicated

  • Anne Hagan

    Thanks for publishing this, AE. I’ve gotten this question from readers from time to time. Readers do want to support authors. Buying direct from the publisher or the author – if the author is set up for that – is always best. I’m not personally set up for direct sales, even digital ones, yet, but I will be in the next few months.The bottom line is, the author is always going to get something from a sale and a sale from any site, is better than no sale at all.

    The other retailers pay 60%-70% to the publisher or to the indie author too and most of them don’t cut that down to 35% or so if a book is priced outside the Amazon optimal range of $2.99-9.99. Distributors like Draft2Digital, Smashwords, Streetlib and PublishDrive make life easier for indies by distributing their books to the major players and many, many minor ones and they generally take a 10% cut for doing so. It’s the cost of having wide reach – wider than an indie could get on her own without spending dozens of hours going from site to site, filling in agreements and tax forms and then uploading all of her books.

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