We as publishers want every book to be a success, and all success in the book world is shared. The more money the publisher makes, the more money the author makes.
All books have a “list” or retail price that serves as the basis for a publisher’s business plan. Publishers sell most of their books to booksellers, libraries, and individuals at a range of discounts from that list price. Your royalty rate is calculated based on either a percentage of the list price or, more commonly among university presses, a percentage of net receipts, meaning the amount the publisher receives from its accounts, including bookstores, libraries, and other vendors, as well as sales direct to the consumer. If Amazon is buying books from a publisher at a discount of fifty percent off the list price, for example, then your royalty rate could be expressed as, say, ten percent of net receipts (the price Amazon pays), or as five percent of the list price. Different formats have different royalty rates, so expect to see varying figures in your contract for hardcover, paperback, and digital formats (e-books and audiobooks). For university presses, net royalties are far more common than list royalties.
Royalty rates among university presses are somewhat standard when it comes to monographs (the success of which is more about academic impact than sales), but for trade books you might have more room to negotiate. Some book contracts may provide clauses that escalate royalty rates when your book hits various sales thresholds.
You will receive a royalty statement from your publisher probably once year, which includes your sales figures and (possibly) a royalty payment. You should be aware that sometimes your sales need to meet a certain threshold in order to trigger a royalty check (for instance, UPs often won’t issue checks for less than $25—or a similar figure—earned in a given year). The best time to have a conversation with your publisher about your royalty rate and how your earnings are calculated is during the negotiation of your publishing contract, so be sure to read all the terms carefully when you receive your draft contract. Don’t hesitate to request a meeting to go over the proposed terms; publishers are happy to explain these things to our authors.
—Texas Tech University Press, December 2024