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Royalties
And
what about royalties? Be careful that you compare apples to apples.
Royalties can be based upon list price or they can be based on
net price. Some publishers
play with these numbers, trying to make the royalties look substantial
while still covering their costs and making money.
Usually, 10% of list (or retail) price comes out to be more than 25% of
“actual payments received less distribution, returns, and sales and
use taxes.” “Actual payments received” is list price minus discounts
to the wholesaler (trade discount is 55%) and other expenses.
For
example, let's say your book lists for $16.00. A 10% royalty would
be $1.60. That may not sound like much, but let's look at how it
works out the other way. The "actual receipts" from a
sale made through a bookseller reflects a trade discount of 55%.
So right off the top, the price drops $8.80. That leaves the
publisher with $7.20 in actual receipts. Now subtract shipping and
handling, sales and use taxes, and returns. Typically 10% is kept
in reserve toward returns so we can take $1.60 off the top. That
leaves $5.60. Let's forget about shipping and handling because the
wholesaler will pay it, and let's also forget about sales tax because
this is a wholesale sale. The publisher has $5.60 in hand on your
$16.00 book. A 25% royalty on that $5.60 is
$1.40. Compare that to 10% of list at $1.60.
And
how about when the sale is a direct sale from the publisher to the
consumer? A publisher offering 30% of list will pay you $4.80 on
each book sold. Simple, straightforward. What about the
publisher offering 30% of "actual receipts" less distribution,
shipping and handling, sales and use taxes, and returns? On a
$16.00 book, actual receipts for a direct sale is the full $16.00.
The author gets 30%, but it's not 30% of list; it's 30% of what's left
over after the publisher takes out his expenses. It's pretty
obvious which works out better for the author.
Other Considerations
There
are other considerations besides these.
For instance, does the publisher offer editing and/or marketing
services? With millions of
books on the Ingram database, the commitment of your publisher to making
your book a success really matters.
And although it may be tempting to go with the biggest and most
automated (Xlibris or iUniverse), be sure you check the fine
print. iUniverse, for instance, is partially owned by Barnes &
Noble, but B&N does not stock books published by iUniverse on its
shelves. That tells you something, doesn't it?
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