The biggest argument for self-publishing made on the many blogs dedicated to the topic is that an author gets to keep all of the money. I have to admit this one point is hard to argue – other than to say that, as I point out in my last blog, you also get to do all of the work. The other point is that publisher’s royalties are somehow out of touch with the reality of a modern age.
This one point I would like to argue, with an example.
Divertir Publishing currently pays the following royalty rates to authors:
- 12.5% of net for the first 2,500 paperback copies.
- 15% for the next 2,500 paperback copies.
- 17.5% for every copy after the first 5,000 paperback copies.
- For e-books we pay 50% of net.
So how does an author fare with these rates? Let’s take our upcoming book “Hurricane” as an example. We are planning on pricing the book at $9.99 to keep it in line with other books in the genre. Assume the following:
- We are giving a 40% discount to retailers, so our net sales per book are $5.99 for print copies.
- Our fixed costs (press fees and ISBN) are $142 per book, and we pay 15% of net (or about $0.90 per book sold) for editing and cover art (we pay editors a percent of net sales just like authors). Our printing costs are $3.50 per book.
Let’s look at what % of the gross margin (net sales minus cost of goods sold) an author receives if we sell the average number of books (500) or if the book is a success (meaning we sell 5,000 copies)
|Net Sales (60% of list)||$2,997||$29,970|
|Cost of Goods Sold (not including authors royalty)||$2,342||$22,142|
|Margin (Net – Costs)||$655||$7,828|
|Royalty – % of Margin||57%||52%|
Our royalty rates are set of so that an author will receive about 50% of the margin for each book. For e-books, we give 50% of net. We feel this is fair. What are we doing for our 50%? We provide the editing, typesetting, cover art, fulfillment, and marketing (more on this in a future blog).
The usual argument against self-publishing (or going with a new small press like Divertir) is that you’ll end up with low sales. But as discussed previously, going with a major publisher is no guarantee your book will be successful or that it will sell more than 500 copies. The usual argument for self publishing is that you keep all them money. While this is true, you also get to do all the work. The choice is yours. Caveat Emptor.