The following is a comparison of the maximum eBook royalty rates offered by Amazon.com, Barnes & Noble, Apple iBookstore, etc. This is the percent of the book’s list price that the publisher (or you, if self-publishing) will receive if an eBook is sold through the following vendors:

List Price Amazon.com* Barnes & Noble Apple iPhone/iPad Smashwords
FREE 0% 0% 0% 0%
$0.99-$2.98 35% 40% 70% 60%-85%*
$2.99-$9.99 70% 65% 70% 60%-85%*
$10-$199.99 35% 40% 70% 60%-85%*
$200+ 0% 0% 0% 0%

Notes:

  • Amazon: For books between $2.99-$9.99, Amazon has a delivery charge. For each book sold, it subtracts $0.15 per MB of the book’s size from the list price, after which it calculates royalties. Books <$2.99 or >$9.99 don’t have a delivery charge, but they do have certain size requirements (although as of August 2011, the size requirement has yet to be enforced). Books $0-$0.99 are supposed to be <3 MB, books $1-$1.99 are supposed to be 3<MB<10, and books $2-$2.98 are supposed be >10 MB in size in order to qualify for 35% royalties.
  • Smashwords: This is Smashword’s royalty rate. E.g. if Smashwords sells a $1 book through Amazon for a 35% royalty, you get:
    +++++$1 · 35% · 65% = $1 · 22.75% = $0.23 royalty per book
  • None of these vendors allow you to sell books priced lower than $0.99 (unless they’re FREE), or over $199.99.

For a complete description of these royalty rates, visit here:

Rachel4 R.M. ArceJaeger is the international bestselling author of Robin: Lady of Legend (The Classic Adventures of the Girl Who Became Robin Hood). Her publishing company, Platypus Press, is devoted to helping authors produce quality books.

6 Responses to EBook Royalty Rates for Amazon.com, Barnes & Noble, etc.

  1. David Gatwood says:

    That’s almost, but not quite, right. For eBooks between $2.99 and $9.99, you can choose either:

    * 35% of list or
    * 70% of list, minus a surcharge based on the size of the document in megabytes, with a host of restrictions and gotchas.

    So it’s not purely correct to say that all books in that price range are discounted by a data surcharge; only books in which you choose the 70% rate are affected. They also must be no more expensive than in any other digital format, and must be no more than 80% the cost of a physical book.

    For example, if your physical book is $9.99:

    If you choose the 35% rate, the most you can get is unbounded, but in practice, you won’t want to sell the eBook for more than the physical book, so it’s probably safe to say that you’ll get a maximum of about $3.50 per copy.

    If you choose the 70% rate, you’ll have to charge no more than $7.99 for the eBook, and you’ll get 70% of that—$5.83 minus download fees. Unless they decide to price-match another vendor. Then, you get less—possibly much less.

    Suppose you agree to let Apple’s iBookstore sell your eBook at only $7.49 (a mere 50 cent discount). Now, in addition to the download fees, Amazon also takes the sales tax out of your royalties, using the new, lower cost as the basis for the initial percentage. So you start out with 70% of $7.49, which is $5.24. Assuming worst case taxation (19% in Germany, I think), you’ll lose another $1.42 in taxes. So you’re down to $3.82. This means that if your book is larger than about 2 megabytes, you would actually be better off choosing the flat 35% rate and a $9.99 list price if most of your sales occur in a country with such a high eBook VAT.

    For that matter, if your Kindle edition is over 23 megabytes, you’re better off at the 35% rate even without a price match. Admittedly, that’s a huge book (a math textbook, maybe?), but it’s certainly not impossible….

    There are a few other requirements as well, such as automatically allowing new Kindle features like text-to-speech. Thus, if you’re selling a book-on-tape edition, you might see more profits at the 35% level even if most of your sales are in a country with a low tax rate. It’s certainly something to consider.

    The most important thing to understand is that you do have a choice, and you’d better understand exactly what you’re agreeing to if you choose the 70% rate. I suspect that most folks would be better off with the 70% rate, but this chart seriously oversimplifies things. :-)

    • RMArceJaeger says:

      Thank you, your points are well taken. It is important to consider size when choosing your royalty rate if your book is, as you say, very large. However, as you noted, most authors will profit best by taking the 70% option, and I didn’t want to complicate the chart too much by discussing the size contingency, (that’s why I only listed the maximum possible royalty rate, even though you can sometimes choose a lesser rate). I am grateful that you did so, though, as it is useful information to know.

      The only thing I want to correct about what you said regarding sales tax on eBooks. Sales tax is only applied to tangible sales (that is to say, the sale of physical goods), and then only if you the seller have a physical presence in the state your buyer is from. EBooks are considered to be virtual goods and thus can’t be charged sales tax, at least in California — different states/countries have different rules, though, so it is possible an eBook sold in the U.K. would be charged tax, whereas an eBook sold in California would not.

      As for delivery tax, it costs money to transfer goods electronically, say to your cell phone or Kindle, and the cost goes up with the size of the transfer. If you the publisher select the 70% royalty option from Amazon, Amazon will charge this cost to you as a delivery tax ($0.15 per MB) so it doesn’t have to charge it to the customer. They subtract the delivery cost from the list price of the book before calculating the royalty, however, not after.

  2. Charles Hattenstein says:

    I self published a book and a number of paperbacks were sold. My publisher put my book on ebook. I know nothing about ebook operation and asked my publisher about royalties, etc. I have not received a reply. I would like to know how royalties are handled from ebook. Do they go through the publisher and then to me, or as an author am I required to make arrangement to receive royalties.

    • RMArceJaeger says:

      I’m a little confused. If you self-published, then YOU are the publisher, not anyone else. If you signed a contract with a publisher, then in that contract it would specify how much you would get paid for digital copies of your book (ebooks). You would get paid these royalties like you do your normal royalties. It’s the publisher’s responsibility to make sure you get paid. If they’re not paying you, then something fishy’s going on. My inner-alert is already going off due to the fact that they haven’t responded to you….

  3. cassia says:

    In your chart it says 70% from amazon for books 2.99-9.99 ~So if my book is listed at 15.99 will I receive only 35% of the price ?

    • RMArceJaeger says:

      That’s correct! Also, most kindle buyers are accustomed to books being priced between $2.99 and $4.99, so books priced over that usually don’t sell as well anyway. That means you’d lose royalties AND sales with a higher price tag.

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