How do book royalties work?
A royalty is your share of every copy sold. In traditional publishing it is calculated either on the list price (the cover price) or on the publisher's net receipts (what the publisher actually receives from retailers). Royalty statements usually come once or twice a year, and they count copies that have been sold, paid for and not returned.
Traditional royalty rates
The Authors Guild's model trade book contract gives the usual ranges for the US market:
- Hardcover (adult trade): around 10–12% of the list price, with higher rates after certain sales thresholds.
- Trade paperback: many publishers pay 7.5% of the retail price; established authors can sometimes negotiate up to 10% above a threshold.
- Mass market paperback: at least 8% on the first 150,000 copies, 10% thereafter.
- E-book: 25% of the publisher's net receipts, which has become the standard rate.
At Orbita Media you earn royalties from the very first copy sold, on every edition (print, e-book and audiobook) and well above the industry average. We go through the exact terms in the first call.
What is an advance?
An advance is a payment from the publisher before publication that is offset against your future royalties. You only receive further royalties once the book has "earned out", meaning your royalties exceed the advance. If it never earns out, you usually don't have to pay the advance back. Publishers Marketplace sorts reported deals into categories: "nice" ($1–49,000), "very nice" ($50,000–99,000), "good" ($100,000–250,000), "significant" ($251,000–499,000) and "major" ($500,000 and up). Deals that make the news are the exception, not the rule.
Self-publishing royalties
- Amazon KDP, e-book: 70% of the list price for prices between $2.99 and $12.99, minus a delivery cost; otherwise 35%.
- Amazon KDP, paperback: 60% of the list price at $9.99 or more, 50% below, minus printing costs in both cases.
- ShelfPublisher: 30% of the net revenue per copy, with no printing costs, a publisher's ISBN and a listing in the wholesale catalogs.
The higher percentage comes at a price: you pay for editing, cover and advertising yourself, and you only make money once those costs are covered.
Example: what do you earn per book?
A hardcover lists at $28.00. A 10% royalty on the list price is $2.80 per copy. At 5,000 copies sold that is $14,000; at 20,000 copies, $56,000. The math shows it clearly: the percentage matters, but volume decides.
For comparison, an e-book on KDP at $9.99: 70% is about $6.99 per copy, minus a small delivery cost. In return, you have to win every single reader yourself.
What do authors actually earn?
The Authors Guild's 2023 Author Income Survey (covering 2022) puts the median book income of all authors surveyed at $2,000. Full-time authors earned a median of $10,000 from their books and $20,000 including author-related work such as teaching, speaking or freelance writing. Most authors earn from their books on the side; the few who live from them usually combine several of the levers below.
What really drives author income
- Reach: Authors who bring a community sell from day one.
- Distribution: A book that can be ordered in every bookstore reaches more buyers than one that only exists online.
- Marketing: Books keep selling for months when ads and recommendations keep running.
- Formats: Print, e-book and audiobook reach different readers, and each pays royalties.
- Subsidiary rights: Translations and licenses bring additional income without writing a new book.