How to Maximize eBook Royalties and Minimize Hassles

After a brief hiatus, valued contributor Ray Rhamey is back! We’re so pleased to have him share insights on both editing and the rapidly changing world of publishing. Welcome back, Ray!

Here are some of the options available for distributing your ebook:

Upload directly to ebook retailers.

The top ones include:

  • Amazon Kindle Direct Publishing
  • Barnes & Noble Pubit!
  • Smashwords
  • Apple
  • Kobo

Amazon. Amazon is the elephant in the library, and the best way to get your ebook there is to create an account, create a Kindle format version (.mobi file), and upload it. The technically savvy can manage this with good results, others can call upon folks like me for an assist. Amazon has tools for creating the .mobi file on your account page. You can get it done with a properly formatted Word document (but it can be tricky). You will need a high-resolution cover image. ISBN not required. Go to Amazon Kindle Direct Publishing (KDP). I’ve posted an article on techniques for cover design that work best on the web here.

Mind your price on Amazon. You can get a 70% royalty on books priced between $2.99 and $9.99–and that price must be at least 20 percent below the lowest list price for the physical book. Outside of that price range, your royalty is 35%. You would make more on a Kindle ebook priced $5.99 than you would for one priced at $10.99.

Amazon’s price adjusting can affect your royalty, too. Amazon searches for prices, and if it finds your book in any ebook format listed on the Internet for less than your Amazon Kindle price, Amazon will drop the price to match the lowest one out there.

Barnes & Noble. You use the Barnes & Noble self-publishing site, Pubit!, to upload your .epub file for sale on the B&N website. They, too, have pricing variations similar to Amazon’s. B&N pays 65% of list for books priced between $2.99 and $9.99. However, it pays only 40% of list on books below $2.98 or above $10. You have to provide an .epub file that you create elsewhere. ISBN not required. You will need a high-resolution cover image.

Kobo. Kobo is a big retailer of ebooks that will be launching a new service for authors at the end of June 2012. Kobo Writing Life will have a means for converting Word and .mobi files into the .epub format they sell. They will have new royalty rates, reportedly up to 70% on books priced under $12.99. Previously, they have required an ISBN, no word on that yet.

Apple. Apple, with its iBook store, is a good market. They pay 70% and have a tool for converting a manuscript to an .epub file, but I have not tried it. An ISBN is required, and they can be costly, as is a cover image.

Sony. Sony does not accept books from individual authors or very small indie publishers—but you can sell there through an “aggregator” such as Smashwords, and they will determine your royalty. Sony requires an ISBN number.

Aggregators. An aggregator will distribute your ebook to a number of ebook retailers. Some charge fees, some don’t , and they differ in to which retailers they distribute to. I found an excellent article on the possibilities here. Some of them also distribute to Amazon, but there may be a fee involved.

Smashwords is the only aggregator I have experience with–I have 4 novels published there. There are some advantages to publishing your ebook through Smashwords.

  • They have a tool for formatting your Word document into all the ebook formats you need, including Kindle’s .mobi–although Smashwords does not distribute to Amazon. Still, Kindle users can buy your book from Smashwords if you select that option. You will need a high-resolution cover image.
  • Smashwords pays a royalty of 85% of net sales for books sold on their site, which works out to about 80% of the list price.
  • They pay 60% on most sales to their retailers–here’s where you can make 60% on any price at Barnes & Noble–that can mean a 60% payoff instead of 40% outside their preferred bracket. Smashwords’s Baker-Taylor royalty is 45%–but they’re a wholesaler, and that’s better than nothing, I think.
  • For Kobo, you earn 60% list for prices between $.99 and $12.99 and 38% for prices over $12.99. This could change with the advent of Kobo’s new Writing Life service.
  • No ISBN required for Smashwords, and they will provide a free one for selling to Apple and Sony.
  • You can track and manage sales to a host of outlets on just one site.

The combo that works best for me

I’m not encyclopedic in my knowledge and experience in ebook publishing, but I’ve researched it a lot, I do have four novels up there, and have done the ebook publishing for two of my book-design clients. For simplicity and the broadest reach for your ebook, it seems to me that signing up with Amazon Kindle and Smashwords are strong choices. I’ll be honest, I haven’t dug into the other aggregators, but the chart I found shows that some charge hefty fees upfront and, even though they don’t charge for the subsequent distribution (Smashwords takes 10%), it would take a long time to earn that fee back unless you have a huge hit on your hands.

The convenience of hitting so many markets with just one sign-up on Smashwords, plus the free ISBN number (worth $125 if you were to go to Bowker), and free conversion of your manuscript into ebook formats make it an attractive option. If they ever distribute to Amazon, then it could be a one-stop e-publishing.

If you have insights for ebook publishing to add, please do in comments.

For what it’s worth.

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About Ray Rhamey

Ray Rhamey is the author of five novels and one craft book, Flogging the Quill, Crafting a Novel that Sells. He's also an editor who has recently expanded his creative services to include book cover and interior design. His website, crrreative.com, offers an a la carte menu of creative services for self-publishers and Indie authors. Learn more about Ray's fiction at rayrhamey.com.

Comments

  1. says

    Very valuable information, Mr. Rhamey! I have been pondering the benefit of publishing with Amazon and Smashwords together. This post seems to confirm what I had been researching! Thanks so much!

    ~L.M. Sherwin

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  2. says

    Thanks for the info.

    What is your authority for the information that ebooks must be priced at least 80% below price of paperback, per Amazon/KDP and Barnes. I’ve never seen that before and was just about to publish a book for an author with ebook and paperback at the same price – if you what you say is true, we’ll have to change that pricing structure asap.

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  3. says

    This was most helpful. I’ve been studying up on e-publishing and every little bit of info helps me get ready for when I’m ready to put my book out there. Thanks so much.

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  4. says

    Great info, Ray, and in line with everything I’ve learned as well.

    The e-publishing formula that works best for me is having direct accounts with Amazon and B&N – since Kindle and Nook make up the majority of my e-book sales – and a Smashwords account to handle distribution to Kobo, Apple, etc.

    Like you, I have not tried publishing directly to Apple’s iBookstore. After briefly reviewing their process, it seems easier to go through Smashwords. But I would be interested in hearing from someone who’s tried it.

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    • says

      Like Ray suggests, I’ve been inclined to let Smashwords do most of the distribution work for me. When I decided to experiment with epublishing back in 2009 (an experiment that’s ongoing, I suppose) I signed up with Amazon first, then Smashwords. When Apple opened up iTunes to books, I signed up with them too, because the direct process was quicker than waiting for Smashwords. iBooks is fussier than the other two, but what I like best about it is immediate pricing control. Want to make your book free RIGHT NOW? Go ahead. If you’re not interested in joining Amazon’s exclusive Kindle Prime program, then this can be a helpful tool in coaxing Amazon to price-match your book. (Note: it’s not guaranteed, and you can’t control when it starts or ends, but it’s something and it’s free.) You can accomplish the same thing by making your book free via Smashwords, but (a) then you have to do it across all the channels you’re enrolled for, and (b) it can take quite a while for Smashwords et al. to process the change (in BOTH directions).

      So yeah. I’ve been happy with my trio — Amazon, Smashwords, and iTunes — even though iTunes is really just a price tool. Amazon BY FAR sells the most copies, with B&N coming in second, then Sony and Kobo.

      // just my experience!

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  5. says

    I’ve been looking into this recently, what put me off smashwords is they only accept word documents! Not the most reliable of formats if you’ve got anything other than very plain text.

    After spending quite awhile carefully hand adjusting my book (a mix of text and illustrations) so that it would display correctly when converted to .mobi for kindle, I don’t see smashwords automated conversion from word working for me.

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  6. says

    Tamsin, it’s possible to use Word’s formatting features in the same way that you can InDesign’s to format so that there are breaks and font sizes and images in a tasteful design. I do this for my book design clients, and the Smashwords converter does a good job. The use of the “space before” and “space after” and “insert images” functions are the tools to use.

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  7. says

    One thing to be clear on is that Smashwords provide you with an ISBN because they become your publisher. In effect you are no longer self-published.

    Many people then use that ISBN for their own versions on other platforms but that is neither legal nor ethical.

    ISBNs are issued to publishers (inc, individuals as publishers). They are not exchangeable.

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  8. says

    MaryZ, I can’t say which is the best route for ePicture books. I just did one that had a large number of photos, so it’s a form of picture book. I designed it for Amazon Kindle and for Smashwords.

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    • says

      Beware Amazon when uploading ebooks with heavy image content. Amazon, pretty much alone among the main distributors, charge fees by file size.

      Fees that can run to several dollars PER SALE, wiping out any potential profits or forcing the author to price at an uncompetitive level just to break even.

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  9. says

    Mark, good point, and I should have included this in my post. However, Smashwords does offer a very low-cost ISBN (under $10) that will list you as the publisher. This is the route I recommend to my clients, and the one I have used. If you use the free ISBN, then Smashwords is listed as the publisher.

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  10. says

    Great info and I was wondering about the high res cover image? I’m a photographer (more than a writer) but I can usually produce a good image or are they looking for a jacket cover type design (I assume) :-)

    Also is there a good source (like other articles from you) on links in a epub or maps? I produce a New England fall foliage blog and help people make their plans and tell them where to go.

    I’d like to leverage all the articles in to a epub that would tell folks how to get there and once there what to look for?

    Thoughts?
    Thanks
    JF
    Click my link to see my foliage blogs
    http://www.jeff0foliage.com
    http://www.new-england-foliage.com

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  11. Loni says

    Thanks for the information. I’ve been thinking a combination of Amazon and Smashwords would be a good idea. I’ll definitely be sharing this post.

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  12. Ashleen Moreen says

    Very informative. Amazon and smashwords are the perfect place where you can publish your books. Thanks a lot for the information and I will share it to my friends.

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  13. says

    Mark, another good piece of information. I have not run into the large-file fee problem yet. One client’s book was photo-heavy, but apparently did not tip the scales.

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  14. says

    What I love about self-publishing is being in control of my career, so I’ve opted for doing everything myself from purchasing a bundle of ISBNs to converting my word document to html and creating the epub and mobi files, as well as uploading directly to Kindle and Nook. It’s possible and really not that difficult, not to mention liberating! I’ve tried uploading directly to iBook, but what a nightmare and what a shame that Apple is lagging behind considering they don’t have to re-invent the wheel but just follow in the footsteps of Amazon and Barnes & Noble. I’m delighted to hear about Kobo’s progress.

    Kristan, what an interesting method to ‘coax’ Amazon into price-match your book! I just love learning all this new stuff – thank y’all.

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  15. says

    I use Lulu.com instead of Smashwords on the advice of my Kindlizer. This makes my book available on the iPad, and lately, it’s been interesting to see sales for it from Australia, Sweden, Denmark and Belgium (Apple’s bookstores are country-specific).

    My book is also available through Amazon (natch) and Barnes & Noble, although I notice that Nook users are also buying the book through Lulu.com.

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