How Self Published Authors Get Paid for Ebook Sales

Self-publishing has become quite popular with indie authors over the past few years because of its low barrier to entry. Most self-published authors sell their books on Amazon because the platform offers the best opportunity to move higher volumes.

Granted, there are many other eBook distributors on the internet, but Amazon outsells all of them combined on a consistent basis.

Some of the other common and popular eBook distributors include:

• iBooks
• Google Play
• Nook / Barnes & Noble
• Kobo
• Smashwords

In the U.S alone, Amazon holds commands at least 60% of the eBooks market share and an impressive 78% in the U.K. For that reason, this tutorial on how self-published authors get paid is going to focus on Amazon.

How Do Self-Published Authors Get Paid by Amazon?

To know how much you are going to get paid for every eBook you sell on Amazon, you first need to understand what business model Amazon uses when it comes to eBook sales.

The simplest explanation is that Amazon pays its registered authors using royalties. That is a certain percentage of the sale prices minus necessary fees such as electronic file delivery fees. The formula used to calculate your royalties looks something like this:

Royalty Rate x (List Price – applicable VAT – Delivery Costs) = Royalty

The “Royalty Rate” is calculated in percentages and there are two main categories: the 35% range and the 70% range.

• If your books are priced anywhere between $0.01 and $$2.98 or are priced at more than $9.99 on the service, then Amazon will give you a 35% royalty rate.
• If your books are priced between $2.99 and $9.99, then you will get a 70% royalty rate from Amazon.

Additionally, if your book sells to a select number of countries listed on the Amazon digital pricing page, then they will automatically fall under the 35% range no matter the pricing; that is unless you enroll your eBook in the KDP Select Program.

Note: Amazon charges an electronic delivery cost for eBooks that fall under the 70% royalty range. This electronic delivery cost varies from country to country.

Calculating Your eBook Royalties

Now that you know the formula, let’s take a look at an example to give you a clear picture of how much you could make per eBook.

Let’s make a few assumptions:

• Your self-published eBook is priced at $2.99.
• The file size for that book is 1MB (most books are smaller than this unless you have included lots of images).
• Most of your customers are from the U.S.

Using the Amazon formula, this book will make you:

Royalty Rate x (List Price – applicable VAT – Delivery Costs) = Royalty

70% x ($2.99 – $0.15(electronic transfer cost for the U.S)) = $1.988

This means you will get $1.99 for every eBook you sell in the United States. However, that does not mean that you will be making almost $2 for all the sales this eBook makes mostly because not all your customers will come from the U.S.

In some cases, you will get customers from countries where Amazon automatically applies the 35% royalty rate plus a higher or lower electronic delivery cost.

Amazon does provide you with a detailed report for your sales and royalties due on the 15^th of every month.

You can check that out on the Kindle Direct Publishing page.