If you're looking to make money online, you're in the right place.

This blog post covers all things book royalties, like how to calculate them, how they vary based on book format, and how to make even more money with Kindle Direct Publishing as a self-publisher. Let’s dive in!

Royalty payments can be upwards of $10k-50k in a single month. Wanna see proof? Head over to our free webinar to see actual royalty checks and bank deposits from self-publishers who had zero experience with tech or writing whatsoever and see how you can get started ASAP!

Kindle Direct Publishing Royalty Options and Rates

Amazon KDP offers different royalty rates for different types of books. These royalties are calculated along with things like delivery fees and printing costs, which we'll get to later in this blog post!

Types of Books

The type of book you publish (whether it's high content, low content, or no content) can influence the royalty payouts you're entitled to. Here's a brief overview:

• High-Content Books: These include novels, non-fiction books, and detailed guides that might be published in multiple formats (eBook, audiobook, paperback, and hardcover). For eBooks, authors can choose between a 35% and 70% royalty rate, depending on the book's price and distribution range. For paperbacks, the royalty rate is approximately 60%, minus printing costs.
• Low-Content Books: These are typically journals, planners, or workbooks with minimal written content. They are usually published as paperbacks, and the royalty rate is the same as for high-content books (approximately 60% of the list price minus printing costs). The pricing strategy for these books often focuses on volume sales due to their lower individual price point.
• No-Content Books: This category includes notebooks or sketchbooks. Like low-content books, they are primarily published in paperback format, and the royalty structure is similar (around 60% of the list price minus printing costs). Pricing and profitability often rely on high sales volume due to the lower price per unit.

Pro Tip: The bulk of the money with royalties is going to come from high-content chapter books, but it doesn't hurt to diversify your income streams by adding other types of books down the line as you establish yourself as a publisher.

eBook Kindle Royalties 35 vs 70

Amazon offers two royalty plans for eBooks: the 35% royalty option and the 70% royalty option. There's also a special program that you can opt into to increase your visibility and hopefully connect with a bigger audience.

The 35% Royalty Option:

• Universally available for eBooks at any price.

• A suitable choice for eBooks priced below $2.99 or above $9.99 and for books with larger file sizes, as there’s no delivery fee.

The 70% Royalty Option:

• Available for eBooks priced between $2.99 and $9.99.
• The eBook must be priced at least 20% lower than any printed edition.
• This option is available in select countries where Amazon operates.
• A delivery fee is deducted from the royalty for this option, calculated based on the eBook’s file size and varies by marketplace.

Kindle Unlimited Royalties:

• eBooks enrolled in KDP Select are eligible for Kindle Unlimited (KU), where authors earn based on the number of pages KU subscribers read.
• The payout from KU is separate from the standard 35% or 70% royalty options and is calculated from the KDP Select Global Fund.

You can use our free Kindle eBook royalty calculator and estimate your potential earnings!

Paperback and Hardcover Royalties

The royalty rate for paperback and hardcover books is the same, but hardcover books will incur higher printing costs.

Paperback Royalties:

• Royalty Rate: 60% of the book’s list price.
• Printing Costs: Deducted from the royalty. These costs vary based on page count, ink type (black or color), and the book’s trim size.

Hardcover Royalties:

• Royalty Rate: Similar to paperbacks, authors receive 60% of the list price.
• Printing Costs: As with paperbacks, costs are deducted and depend on the same factors: page count, ink, and trim size.

Try our Amazon royalties estimator to instantly see your expected earnings and plan your publishing pricing more effectively.

Audiobook Royalties on Amazon Through ACX

Amazon offers a royalty structure for audiobooks through ACX, which is primarily based on the distribution choices rather than the length of the book:

Royalty Rates:

• Exclusive Distribution: If you choose to distribute your audiobook exclusively through Audible, Amazon, and iTunes, you can earn a 40% royalty.
• Non-Exclusive Distribution: If you opt for non-exclusive distribution, which allows you to distribute your audiobook through additional channels outside of Audible, Amazon, and iTunes, the royalty rate is 25%.

Production Costs:

• Producing an audiobook can incur various costs, including fees for narrators, studio recording, editing, and mastering. These costs can vary widely based on the length of your book and the rates of the professionals you hire.
• ACX offers a production cost-splitting option, where you can share these costs with your producer or narrator.

Royalty Share Programs:

• ACX also provides a Royalty Share option, where you can partner with a narrator/producer for production without upfront fees in exchange for sharing a portion of your royalties.

Pro Tip: We never recommend sharing your royalties with others, as this can cost you tens of thousands of dollars in the long run. Don’t learn this the hard way like some of our students did!

Calculating Your Amazon Royalties

Here are a few helpful tips and things to keep in mind when calculating your Amazon royalties:

Royalties Calculator

We created our very own Amazon Royalties Calculator that is 100% free to use. To use the calculator, you'll need to enter your book's list price, trim size, and whether you'd like to print your book in black and white or color. The calculator will then calculate royalties that you are entitled to.

It will also provide you with your Breakeven ACOS number, which you'll use to determine whether your future Amazon ads are profitable.

What Is List Price vs. Retail Price?

Self-publishing and Amazon have their own lingo, but it's really not that complicated once you get the hang of it. Let's break down the list price vs. retail price:

List Price:

• The list price is the price you, as the author or publisher, set for your book. This is the baseline price before any discounts or adjustments.
• It's crucial in determining your royalties, as Amazon calculates your earnings based on this price.

Retail Price:

• The retail price is the price customers see and pay on the Amazon platform. While often similar to the list price, it can vary.
• Amazon has the discretion to discount the retail price based on various factors, including market competition and promotional activities. However, your royalties will still be calculated based on the list price you set.
• Amazon may also adjust the retail price in different marketplaces to align with local currency and market conditions.

Impact of Printing Costs and Delivery Costs

Printing and delivery costs can also impact your Amazon royalties. Amazon deducts these costs from your list price before calculating your royalties. You’ll want to keep these costs as low as possible to maximize your earnings.

Pro Tip: We tell our students to print in black and white whenever possible for this exact reason. Most readers don't mind black-and-white photos or diagrams! Unless it's absolutely necessary to use color (like with a children's book), you should do yourself the favor and cut down on your printing costs to maximize your royalties.

Factors Affecting Royalties

There are several factors that can affect the average royalties for a book you earn. Understanding these factors can help you make informed decisions about your book and optimize your earnings.

Book Length and Formatting

Book length will be most relevant to print books and paperback distribution, but formatting will affect every type of book you create. Here's how these two factors can affect your book sales and price points:

Book Length and Printing:

• Royalties are calculated after deducting printing costs, which are influenced by the book's length. Longer books with more pages incur higher printing costs, potentially reducing your net earnings. Remember: Longer isn’t always better. 
• Consider the balance between content depth and page count. For very long manuscripts, splitting the work into multiple volumes could be a cost-effective strategy. You can then sell these volumes separately as well as bundled together. 

Importance of Professional Formatting:

• Proper formatting is key to avoiding costly printing errors. Poor formatting can lead to issues that might require multiple revisions and additional costs.
• Investing in professional formatting services can save you more in the long run if you don’t have the time/resources to do it yourself.

Optimized Formatting for Earnings:

• A well-formatted book enhances reader experience and can reduce unnecessary pages, thus optimizing printing costs.
• For eBooks, formatting doesn’t affect printing costs but can affect delivery costs as well as readability and customer satisfaction, which can indirectly impact sales and royalties.

Distribution Rights and Public Domain Content

Copyright is something that you want to get right the first time, and it's really not that difficult as long as you remain conscious of these topics:

Public Domain Content Considerations:

• If your book incorporates public domain content, Amazon may limit distribution options or impose specific requirements for books that primarily consist of public domain content if your work isn’t differentiated enough from the market. 
• Ensure your use of public domain content brings added value, such as unique annotations, illustrations, or translations, to meet Amazon’s publishing criteria.

Exclusive Distribution Agreements:

• If you’ve entered into an exclusive distribution agreement with a third party, it may restrict your ability to sell your book on other platforms, including Amazon.
• Review any existing contracts for clauses that may affect your distribution rights on Amazon and other platforms to avoid your account getting banned.

Ensuring Optimal Distribution:

• Take advantage of Amazon’s global distribution to reach readers in multiple countries. 
• Publish your book in multiple formats so you’re not leaving money on the table each month. 

VAT and International Sales

VAT taxes and fees won’t be relevant to self-publishers in all countries, but it’s worth brushing up on Amazon’s rules: 

VAT Deductions from List Price:

• For sales in certain countries, Amazon deducts VAT (Value Added Tax) from your book's list price before calculating royalties. This can lower the net amount you receive per sale.
• The VAT rate varies by country and can significantly impact your earnings, especially in regions with high VAT rates.

International Fees and Taxes:

• Sales outside your home country might incur additional fees or be subject to different tax treatments, potentially affecting your earnings.
• Exchange rate fluctuations can also impact your royalties from international sales.

Setting the Right List Price:

• Consider these factors when setting your list price. It may be beneficial to adjust prices in different markets to offset the impact of VAT and other fees.
• Keep in mind that price changes can affect customer perceptions and demand.

Seeking Professional Guidance:

• Given the complexities of VAT, international taxes, and fees, consulting with a tax professional or an international publishing consultant can be helpful.
• They can provide insights into optimizing your list price for different markets while ensuring compliance with international tax laws.

Receiving Payments and Managing Finances

How do you get paid when you self-publish a book on Amazon?

Here's the rundown:

Payment Methods

Amazon offers several payment methods for authors and publishers to receive their royalties, including direct deposit, wire transfer, and check.

• Direct deposit: This is the most convenient option, as it allows you to receive your payments directly into your bank account without any additional fees. To set up direct deposit, you will need to provide Amazon with your bank account information (which takes less than 5 minutes).
• Wire transfer: This option comes with a fee per transfer. If you choose this method, you will need to provide Amazon with your bank account information as well as your bank's SWIFT code.
• Physical check: Amazon can mail a check to you each month, but this method can take longer and may incur additional fees depending on your location.

Tracking Sales and Earnings with Amazon Reports

Amazon KDP provides comprehensive reports to help you track your book sales and earnings, accessible directly through your KDP account. These tools offer valuable insights into your book’s performance:

Sales and Royalties Reports:

• Detailed data on the number of books sold, total earnings, and royalties per book.
• Breakdown of sales by individual book title, giving a clear view of which titles are performing best.

Marketplace Performance:

• Ability to view sales and earnings by region or marketplace. This helps you understand how your book is performing globally and can inform targeted marketing strategies.

Analytical Tools and Resources:

• Amazon provides graphs and charts to visualize your sales data, making it easier to spot trends and patterns over time.
• Use these tools to analyze peak sales periods, the effectiveness of promotional campaigns, and reader preferences across different markets.

Comparison with Traditional Publishing

Here's how the Kindle store compares to other, more traditional distribution channels:

Royalty Differences

In traditional publishing, authors and publishers typically receive a royalty rate of around 10-15% of the book's retail price (in rare cases, up to 20%). This rate can vary depending on the publisher and the author's negotiating power.

On the other hand, self-published authors on Amazon can earn up to 70% of the book's retail price in royalties. Not to mention, Amazon also offers Print-on-Demand services, so you don't have to worry about inventory management or shipping your books to customers. They handle everything for you.

Control Over Pricing and Rights

When working with a traditional publisher, authors and publishers often have limited control over the pricing of their books and the rights to their work. The publishing house may set the price of the book and determine which formats and territories it will be available in.

In contrast, indie publishers on Amazon have complete control over the pricing of their Kindle books and their distribution. You can choose to sell your book at any price you want and have the ability to make changes to the book at any time (even if that means pulling off the shelves or redoing the cover).

With Amazon, you also retain all rights to your work, whereas traditional publishers may require you to sign over certain rights, such as film or audio rights, indefinitely.

Comparing Amazon Royalties with Other Self-Publishing Platforms

Amazon isn't the only self-publishing company on the market, but it's definitely one of the best. Curious about the others? Read about the top self-publishing companies to keep an eye on!

Royalties on Other Platforms

One popular self-publishing platform is Smashwords. With Smashwords, authors can earn up to 80% of the list price on sales made through their platform. However, this percentage is only available for sales made through their own website. For sales made through other retailers, such as Barnes & Noble or Apple Books, authors earn 60% of the list price.

Another platform to consider is Draft2Digital. With Draft2Digital, authors can earn up to 70% of the list price on sales made through their platform. They also offer distribution to a wide range of retailers, including Amazon, Barnes & Noble, Apple Books, and Kobo.

Which Platform is Right for You?

How do you know which self-publishing companies are worth publishing on? You'll need to consider things like subscription costs, whether the platform offers ancillary services like editing and formatting, and whether they offer expanded distribution.

As a quick reminder, Amazon offers a wide range of marketing and promotional tools, as well as access to its massive customer base for free. These tools can help you create your book cover for all formats of your Kindle books as well as track your customer reading behavior.

Realistic Earnings for Self-Published Authors and Publishers on Amazon

First things, first. Can you make a good Kindle publishing income? The amount you can earn from self-publishing on Amazon depends on several factors, including the price of your book, the royalty rate you choose, and how much effort you put into your marketing.

What better way to learn about the realistic earnings for self-publishers than to hear directly from some of them?

Nicolas and Marie-Lou are a couple who started self-publishing on a whim, even while juggling a dozen other responsibilities. They published their first book in less than six months, and it wasn't long before they were earning nearly $1k in a single month.

Samuel was a college student who felt unfulfilled and lost. He didn't really know what he wanted to do with his life, but he did know financial freedom was something he valued. He went on to earn nearly $4k in a single month from just three books, and English wasn't even his first language.

Brock made a LOT of mistakes in publishing over the course of 90 books, but each mistake brought him closer to making over $100k from publishing (you read that right). Brock's story isn't the average self-publishing success story, but it goes to show what's possible if you take your print book and eBook sales further.

Pro Tip: Plenty of side hustles sell the idea of a passive income, but self-publishing is one of the only side hustles that can generate truly passive income...the kind that pays in your sleep. If you have multiple books for sale and continue to promote them, your earnings can add up over time, and those royalty checks will continue to hit your bank account for decades to come.

5 Strategies to Maximize Royalties on Amazon

Before we wrap up here, we'll leave you with five ways to maximize your royalties on KDP:

1. Use Dynamic Pricing

2. Do Thorough Competitor Research

3. Optimize Your Book's Description

4. Make the Most Out of Amazon's Promotional Tools

5. Have a Solid Plan to Get Book Reviews

Making Money Online Doesn't Have to Be Complicated

Forget the business or law degree. Forget the upfront costs and inventory hassles of other side hustles. Self-publishing doesn't require any of that. What's stopping you from turning half a dozen self-published books into...

• a luxury vacation fund so you can travel anytime you want to without having to request PTO?
• a college fund for your current or future children so they'll never have to worry?
• an emergency fund that prepares your family for anything that comes your way?

See how self-publishing has already changed thousands of lives by heading over to our free webinar that simplifies the entire process and shows you exactly what you need to get started today!