Is 70% Royalty Really 70%?

I just found this article about the Amazon 70% royalty rate.  It includes a delivery fee, so you don’t really get 70%.

http://empty-grave.com/2012/03/how-does-amazons-kdp-70-royalty-delivery-cost-delivery-fee-work/

Here’s some math from the article:

If you upload your 30MB $6.99 eBook file, and are on a 70% royalty plan, you get dinged for a $4.50 delivery fee with every Amazon sale. Your 70% royalty for each sale is actually [$6.99 – (30MB x $0.15)] x 70% = $1.74. Since your 70% royalty is actually only paying you 25% you are then advised to just use the 35% royalty plan because there is no “delivery fee” at 35%. If I wanted to make the $4.89 royalty implied by the 70% plan I would need to price my $6.99 book at $11.50 so as to accommodate the delivery fee.

Another Example:
My $4.99 15MB book at 70% royalty is:
($4.99 – (15 * .15))*.70 = $1.92

My $4.99 book at 35% royalty is:
$4.99 * .35 = $1.74

Thoughts?

About Charles Yallowitz

Charles E. Yallowitz was born, raised, and educated in New York. Then he spent a few years in Florida, realized his fear of alligators, and moved back to the Empire State. When he isn't working hard on his epic fantasy stories, Charles can be found cooking or going on whatever adventure his son has planned for the day. 'Legends of Windemere' is his first series, but it certainly won't be his last.
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42 Responses to Is 70% Royalty Really 70%?

  1. Saunved says:

    This is outrageously insightful! There’s a huge difference in 35% and 70% in real life. Anyone who knows his math would opt for the 35% royalty…! 😀
    But this seriously was shocking to read!

    Like

  2. sabcooke says:

    Charles? Maths? Really?! 😛 Just checked that link and saw the figures were there, the order to the universe is restored!

    It’s not a huge deal and I think it’s blown out of proportion. At the end of the day, Amazon are charging a flat rate based on size, not a discriminatory figure. They are a business and, judging by this article, are not hiding anything. It is up to each user to thoroughly read every aspect of the deal. So I would defend Amazon and say there is nothing shady going on here.

    As for how it matters to you, that depends on what you’re publishing. I would imagine most novels have a small size, thus the fee shouldn’t be that big and a 70% royalty is more beneficial. The only time a 35% royalty is more profitable is if you’re publishing a large file.

    Solution? Do the number crunching (or use articles like this to do it for you) and it’s quite clear which is more beneficial.

    For example, your Legends of Windemere ebook is under 1 MB. That’s a .15 fee – safe to say 70% is more beneficial, albeit you will not see the full 70%.

    Like

    • I’d be lying if I said I didn’t have you in mind when I made this post. 😉

      Thanks. I thought the size about was going to be a big factor, but my brain is not hardwired for math. I was wondering where one would get a file that huge though in terms of self-publishing.

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      • sabcooke says:

        It’d only really be an issue with comics and non-fiction books with tonnes of images. Even then, you’d need quite a lot to get it up there. 🙂

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      • I think this is more ‘shocking’ than anything else. People praise the 70% and don’t mention the other stuff for some reason.

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      • sabcooke says:

        The majority of publications on Amazon are fiction, which aren’t heavily effected by the system they have in place. The reason the 70% is so praised is because it’s that good.

        When you put in the subtraction for file size, you’re looking at about 65% more or less, which is still an extremely good royalty.

        Basically, one person properly read how the system works and did numbers that would make it seem like a terrible thing. I’d say there aren’t a huge amount of 30MB files being effected on Amazon. I could do a post with the flat rate of Amazon and match it with numbers that will make it look reasonable, if not more than reasonable.

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      • I’d say go for the post to make a counter-point and link it back to this. It wouldn’t be right for there to be a lop-sided opinion out there. Re-reading the article, it definitely feels like it’s skewed. I didn’t realize the size thing when I first read it.

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      • Seán Cooke says:

        I might do if the mood strikes me. 😀

        Still have editing, that guest post for you and most importantly, job hunting to do, so my plates quite full… but I am one to overeat anyway… Might chuck it up some point during the week.

        Like

      • I thought I was busy.

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  3. katemsparkes says:

    Interesting. It sounds like it really hits people doing graphic novels or illustrated books a lot more than novels, since they’re uploading a lot more data. I have no idea what the average file size for a novel would be. Sounds like it’s best to create your own .mobi file rather than using their conversion tools, though. Keeping this so secretive makes Amazon look bad.

    Like

  4. mrschmoe says:

    Delivery fee. How did I miss it? Talk about squeezing every single penny. Anyways, I would compile scrivener documents to mobi and epub via scrivener.

    Like

    • My computer hasn’t been able to work with scrivener. Though, my file is less than 1MB, so they only take .62 cents from me. I don’t see that much of a difference between this and 35%. It’s just very shocking when you expect $2 from a $2.99 ebook.

      Like

      • mrschmoe says:

        Yikes, sorry to hear about that. I take it that your computer is either an older model or somewhat a recent one.

        It stinks big time when amazon deducts from 70% royalty. Sounds like false advertisement on their part, those cheap skates. I had to refrain from calling them greedy sons of bitches. anyways when an self-published author is expecting 70% royalty, only to to find that he/she is being given leftovers.

        Like

      • Desktop has Vista, but I barely use it. Not a fan of spending all day in the basement. The laptop/work computer is from 2006.

        The deductions are in the contract. I think part of this issue is that people are promoting it as a straight 70% royalty without deductions. This is more by other self-published authors than Amazon. Kind of like the old telephone game. The original message loses something and you miss a fact. It’s really hard to tell exactly. I think I’d make a lot on a 3.99 book though. No matter what my book’s delivery fee is 0.09 cents.

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      • mrschmoe says:

        ah the contract. At least they didn’t deduct much from your 70% royalty

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      • mrschmoe says:

        ah the contract. At least they didn’t deduct much from your 70% royalty

        Like

      • Yeah. If I can get more books out then it really won’t matter much. 😉

        Like

  5. From reading the article, and from what other people have said, it looks like this is mainly a problem for people publishing books with lots of other pictures. Otherwise, the file size would be fairly small, and therefore the “Delivery fee” would be low. Is that fair to say?

    Like

    • Looking at my royalties from last week, you’d be right. My book is less than 1 MB and the delivery fee is 0.09 cents. It’s hard to tell entirely because they hit me with .99 cents for part of the week.

      Like

  6. Glynis says:

    This was very insightful!
    Thanks for the post and the link. I’m in the process of publishing my first book through Amazon and thankfully now I’m more informed.
    So Thanks !

    Like

  7. L. Marie says:

    Wow. This is eye opening! It looks like you’re only slightly better off at 70%.

    Like

  8. amberskyef says:

    Reblogged this on and commented:
    A very insightful post for those going the self-publishing route. And a delivery fee? Really, Amazon?

    Like

  9. C.N. Faust says:

    No matter what people will try to say about Amazon, in my experience it still treats most of us authors better than Kobo or Lulu or Nook – because with Nook I didn’t sell anything at all, despite all of my best advertising efforts, Lulu made my print work extremely overpriced, appealed to a smaller audience, and made everything in short more difficult to sell, and Kobo just never wanted to work with me at all. Amazon appeals to a wider variety and offers more rewards / benefits – right now I am pushing my print books a lot more just because my eBooks are starting to do better, and print isn’t affected by the select program.

    Like

    • Excellent point. This is probably why the others aren’t winning the self-publishing battle. How are you print book sales doing? I stopped pushing when it seemed they wouldn’t budge while eBook rose without my help.

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      • C.N. Faust says:

        My print sales haven’t budged either, which is why I have been doling out coupons. Granted, $10.99 is a bit excessive but The Dragon’s Disciples is a lengthy book. I’m thinking Heretic Priest will be cheaper just because it is about half the size.

        I’m doing everything I can think of to promote the print versions – I am trying to find local venues willing to sell them, but that’s like trying to fish with a butterfly net.

        Like

      • I can relate to that analogy. No long with the local venues and my print books. Afraid my butterfly net is more like a large bubble wand.

        Like

      • C.N. Faust says:

        I am actually trying to save up to send them to Lightning Source so that they can end up with wider distribution channels. Either that or put them in the expanded distribution setup that Createspace offers. I’m thinking of starting a Kickstarter program.

        Like

      • I keep hearing about Kickstarter being great for authors, but I can never figure out how I would really use it. Don’t you have to promise something to people that donate?

        Like

      • C.N. Faust says:

        I don’t think incentives are required, but they are definitely encouraged, because it will give people something physical to hold onto for their money. I will probably make a blog post about this, but what I am thinking about doing is this: set up a campaign that will fund the first three books of the series, then offer incentives like a $20 donation will get you a good sized poster signed by the author and a copy of the The Dragon’s Disciples eBook for whatever reader you happen to have. Then if you donate like $35 you get a copy of The Dragon’s Disciples paperback sent to you, and for a $50 donation you get Dragon’s Disciples and The Heretic Priest. Or something like that. Other things could be given out as extra – one could even pull together an “ultimate” package where $100 gets you the poster, both paperbacks, bookmarks, and an ebook – etc.

        Like

      • I’d afraid that all of the money I make will go the incentives. Truthfully, I don’t know what I’d really do with all the money. I spend $70 on initial advertising and the rest is free. The merchandising could help, but I haven’t had much luck around my neighborhood. I try, but the businesses aren’t interested in authors.

        Like

  10. keladelaide says:

    I normally like numbers but those figures do my head in. Hope you get to the bottom $ of it.

    Like

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