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Royalties? What are royalties?

Royalties? What are royalties?

 |  Author Academy

 

 

 

 

Royalties 101

Firstly, what are royalties? Royalties are the payments given to creatives, including authors.

 

This is often a percentage of net sales of a book.

 

We can only give a royalty for a book when it has been paid for by the shop/wholesaler, many of these places take up to three months to pay. Also, shops such as Amazon or Gardner’s (a book distributor) may return books after three months, as most of our books are on a sale and return basis, meaning they can be returned if they do not sell, at no charge.

 

Your royalty is the result of a net sale. For example, one of our highest discounts goes to Amazon; they ask for a 60% discount. If a book is £10 and we sell it to Amazon on a sale or return basis, we would receive £4. You then get your royalty percentage of the net price, which is £4. If your royalty percentage is 10% you would receive 40p.

 

The only place where a discount is not included is from our own website, and you get the royalty percentage of the full price of your book. Bookshops and wholesalers demand publishers give them a high discount as they also need to make a profit.

 

Please note: we occasionally offer sales or discounts on our website, if this is the case and customers are given a unique discount as a promotion, the same procedure as bookstores apply with net sales.

 

We calculate sales twice year, as of 31 December and 30 June. All sums of money due to the author are paid to the author within twelve weeks of that date. (Usually, royalties are paid in January and July, but as information needs to be collated from wholesalers, Amazon etc, it can sometimes take a few weeks.) If the amount is less than £10, this is carried forward to the next royalty statement.

 

 

Example calculations

 

Book cover price                     (RRP)                                                  8.99

Price Amazon pays                 40% of retail price                               3.60

Publisher net sales                   40% of retail price                              3.60

Author royalty *                      10% of publisher net sales                  0.36

 

Book cover price                     (full retail price)                                 8.99

Sale price                                50% of retail price                              4.50

Publisher net sales                   50% of retail price                             4.50

Author royalty *                     10% of publisher net sales                  0.45

 

 

* The royalty percentage is specified in the contract. These figures are for illustration purposes only.

*Retailers such as Amazon or Book Depository can set a higher or lower selling price to the recommended retail price we give them. 

 


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