A conventionally published author earns 5–20% royalties on print books, 25% on ebooks (though this might vary), and 10–25% on audiobooks. Unconventionally published authors may earn less than 5%. Self-published authors don't typically earn anything.
After accounting for other costs such as editing, design, publicity, etc., printed books usually cost $12,000 to $50,000 while ebooks typically sell for $10 to $30 per copy sold. Audiobooks are generally more expensive at around $150 per hour or $15,000 for a two-hour story. Music albums and children's books aren't considered profitable due to low sales volumes.
Royalties are based on the number of copies that were sold. Print books that are listed on bookstore shelves are called "physical books" and they include bestsellers that can be found in stores such as Barnes & Noble and Amazon. Physical book publishers also work with retailers to arrange promotions and discounts that will help drive up book sales. These deals can include free gifts with purchase, half off certain titles, and more.
Ebooks don't need to be stocked on store shelves, so there is no physical book publisher who would offer these types of deals.
An author receives 20 to 30 percent of the publisher's earnings for a hardback, 15 percent for a trade paperback, and 25 percent for an eBook under conventional royalties. So, generally, every hardback publication that earns out provides the author around 25% of the publisher's total earnings. For trade paperbacks, this figure is around 20%. For eBooks, it is around 15%.
The actual amount an author receives will depend on several factors, such as how long after publication the book sells enough copies to be eligible for royalties, whether the publisher offers an advance against future royalties, and so forth. But with these figures in mind, an author can get an idea of what to expect.
There are two types of royalty rates: up-front and back-end. With up-front royalties, the author receives all of his or her royalties at one time. These are typically given as a single check at the end of the contract period (usually about three months after publication). If the publisher goes bankrupt before then, the author does not receive any money. Back-end royalties work differently. The author's share of sales comes out over time rather than all at once. For example, if one book sells 100 copies during its first year on the market, the author would receive 1 copy of the book. After two years, he or she would receive 2 copies, and so on.
A book royalty is the amount paid to an author by a publisher in return for the right to publish their work. Royalties are based on the number of books sold. For example, an author may get 7.5 percent royalties on each paperback sold and 25 percent royalties on each eBook sold.
The typical royalty rate for non-fictional works is between 8% and 10%. However, rates can vary significantly depending on many factors, such as how well known the author is, what category of book it is (for example, fiction or non-fiction), how old the book is when it is published, how new or established the publishing house is, and many others.
Books that sell in large quantities usually receive higher royalties than those that sell in smaller numbers. For example, an author might get $15 per copy of a book that sells one million copies, but only $10 per copy for a book that sells 50,000 copies. This is because there are more costs involved in printing and selling millions of books than there are with fewer products.
Royalties are usually included in the final price of the book. However, some publishers may choose to charge extra for this, especially if the book does not carry much profit for them. For example, a publisher might charge $60 for a book with a $10,000 royalty rather than $50 for a book with a $7,500 royalty.