Publishing Quandary - Part Two

update: 09feb12 - Note:  I just got through listening to a lecture on e-publishing.  I want to clarify that CreateSpace is the division of Amazon that physically publishes e-books.  I believe the royalties percentages are the same, but the fees may not be.  If I go the e-publishing route, I'm sure I'll share all the details.  See my 09feb12 post for more information on the lecture.

The other thing that has changed is that Amazon now has a "fund" for authors to pay out royalties for books that are loaned via their Prime membership.  I don't know all the details, but e-publishing is looking better all the time.





Let's Talk Money

To Self-Publish or Not to Self-Publish: I mean, that is really the question, at least on my mind these days.  As I mentioned, many of my friends have been sending me the articles about the benefits of self-publishing, and I’m starting to listen, and investigate.

I found a blog called “A Newbie’s Guide to Publishing” (see the link on the right sidebar) which appears to have a lot of convincing information on the advantages of self-publishing, but call me skeptical, I’m of the opinion that you cannot believe most of what you read on the web. 

So I opened a CreateSpace account (Amazon’s tool for self-publishing). 

The first advantage is that the author gets somewhere between 35-70% of the royalties. After doing some reading on CreateSpace, the “what is my royalty” equation appears to be quite complicated. Even if you sign up for the 70% royalty program, you may not get 70% relative to delivery* expenses and taxes**.

* "Delivery Costs are equal to the number of megabytes [Amazon] determine[s] [my] Digital Book file contains, multiplied by the Delivery Cost rate listed below."  For example: Amazon.com = $0.15/MB, Amazon.co.uk = £0.10/MB

** "When [Amazon] sell[s] a Digital Book to an EU customer from one of [Amazon’s] EU websites, the price includes value-added tax at the rate of 15%, the statutory Luxembourg rate. Tax rates for sales in other countries and from other Amazon websites may vary."

So, let’s say that my book sells for $0.99 and is somewhere between one and two megabytes in size, the equation (if you read all the fine print) would look something like this:

0.70 x ($0.99 – 2($0.15)) = 0.70 x $0.69 = $0.48

which is half of the cover price, and still not too shabby. 

But let’s also say that it sell on one of the EU websites (using the 15% tax rate mentioned above).  Now the equation looks like this:

$0.99 x 0.15 = $0.15

0.70 x ($0.99 – 2($0.15) - $0.15) = $0.33

which makes it worth considering the flat 35% option.

At the 35% rate, the delivery costs are not taken into consideration, and the book can be sold in any territory, while you only get the 75% rate in certain territories (countries).  If a county is not listed as a 75% rate territory, then the royalty reverts to the 35% rate.

Still sounds good, yes??

But my favorite tidbit—and they, Amazon, are very open with this, it isn’t hidden in minuscule fine print—is the interesting clause under the flat 35% option (and from what I can glean from the legalese, this could also happen with the 75% rate):  "[if Amazon is] matching a free promotion on another sales channel. [My] royalty is zero."

So basically, Amazon has the right to give my book away, get whatever they get for giving away stuff like this, and I get nothing.  I'm not sure, since I've never dealt with a publishing firm, whether this is just standard practice or not.  Time will tell.  But it does disturb me that Amazon can decide "we're having a free-for-all, gonna have a huge give-away" and I get zero.

Of course, all this is opposed to an at-best royalty of 17% when going through a traditional publishing house.  I’ve been told by existing authors that they have gotten as little as $0.07 on the dollar for each book sold, depending on the contract, the agent, the publisher, and the market.  I’m pretty sure the agent gets more than that.

With that said, it's still a toss-up.  Next time, I'll investigate the non-financial issues and advantages of both traditional and non-traditional publishing.