Amazon Royalty Rates and Making Money with Your Book

Money in a bagI had an excellent question come in today about my opinion of the royalty rates offered by Amazon for ebooks on the Kindle and I will also put in paperback books through CreateSpace. It is a question about making money with your book.

Most of the money I make on Amazon comes from my paperback books produced through print-on-demand and CreateSpace. For me Kindle does almost nothing. Which is the opposite for many people. It is most likely the mix of books that I create.

I make about $3.27 royalty per book for my paperbacks with an average list price of $9.95 and $1.40 per book for Kindle with prices around $2.99. For the month of December I have sold 427 so far, having a great Christmas and on Kindle I have sold 11 books. Most of my books are on both platforms but I am selling coloring books, geography books, music books, a few business book, stuff like that. So most of my sales come from the printed books.

On Kindle you have two royalty rates, 35% – where Amazon picks up all download costs and give you the widest distribution and 70% – where the author pays download costs and has a little less distribution. You may know or not know that authors pay for the book download. With most books you never notice it because it is so small, but I see it with my picture and graphics books. The download can be a couple of dollars. To cover this I select the 35% option and Amazon picks it up.

Royalty rates are a common question, everyone thinks Amazon is just a big company taking all our money. But I think these issues have to be kept in perspective. Traditional publishers give you about $.70-$1.00 per book in royalties and own all the rights. Even the big guys, most of their money comes from the advances they get and then the author works against it. But our royalties are usually 2-5 times greater than this. And we get to keep all the rights. That being said, you want more money just charge more or sell more books. But that then comes down to what the market will bear, competition, and of course does anyone care and actually buy our books. I also think that Amazon has been pretty successful in pushing all prices down and down. Unless you are a big name you are in the $.99-$2.99 price range for your book. But it is their store.

Another thing to remember, and this is important, is that we aren’t handling any of the e-commerce, sales page, printing, mailing, trust of Amazon and the dropping of the money in our bank accounts. That is worth a lot. I am very pleased with what I get. It is up to me to market and sell more.

Personally I am thrilled by it all. I get to make any book I want and deliver it to an almost global market for zero cost and no one saying no. It is amazing. It costs me nothing but the time to make the book. I don’t have to touch any part of the process after the book leaves my hand. I love getting that money in my bank account.

My part is the marketing. My recommendation is to be always working on building funnels to drive people to buy my books. My job is to build out a website, social media, book videos, off and online marketing. This is what I do. You can’t rely on Amazon to sell your books. You have to be in charge and constantly marketing.

The other thing you can do and a lot people are starting to do this is use your book as a lead generator. Work the back end. You can give the book away for nothing if you have links and content that drives people to your other products. How about leading to a course, consulting, videos, into your mailing list, what ever you can think up.  If you do this, your book might bring $29.95 or $25,000.00 and anything in-between. You can have live web links in your Kindle books right to your website and products. Think of your book like a giant sales pitch, but in a nice way. You can also put web links in your print books, just make them simple and clear.

So my bottom line is I am very happy with the process. I don’t have a garage full of books and I don’t have to do any part of the hosting, printing, processing or dealing with the money. My job is just make books.

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