THE INDIE PRESS NETWORK GUIDE
Royalties
We cover other important aspects of royalties (e.g. advances) in our Contracts article.
While some publishers choose to pay a fixed fee (a one-off payment – more common in buying rights to include a piece of work within a publication), the majority of trade publishers pay royalties, sometimes with a lump sum, or ‘advance against royalties’ up front.
Royalty rates vary drastically from publisher to publisher (author to author) and between areas of the industry, but it’s fair to say that they’re generally between 5% and 10%. The most common trade model is 10% on hardback sales and 7.5% on paperback sales, and this is traditionally paid on the RRP of a book, although in some cases they are paid on net receipts.
It’s important to make this clear in the contract, as it makes a big difference. For instance:
On sales of This Great Book by J. Smith, which retails at £10
Paid 7.5% of the RRP, J. Smith would receive 75p per sale.
Paid 7.5% of net receipts, and presuming sales were made at an average discount of 50%, with sales and distribution charges of 30%, J. Smith would receive 26p per sale.
After this, terms can get a bit trickier – perhaps an agent wants to see an escalator (e.g. 7.5% up to 10,000 copies, and then 10%), and if you’re selling copies in export or at high discounts you might need to adjust the royalty rate so you’re not losing money.
Royalty periods
When you’ve decided on all of the above, you’ll need to work out when you pay royalties. Since it’s a time-consuming and fiddly job, most publishers only run royalty reports once or twice a year, and it’s common practice to pay swiftly afterwards.
Resources
- Society of Authors – CREATOR
ABOUT THIS ARTICLE
Last updated: 16th September 2023
Author(s): Will Dady, Renard Press