Saturday, July 3, 2010

The 70% Option

In case some writers still don’t know this, Amazon is now offering publishers a 70% royalty (of list price) for Kindle book sales. The term publisher means anyone with a Digital Text Platform account, both individuals and small presses. (Most major publishers have an agency-model contract with Amazon, a whole different subject.)
These are the conditions for qualifying for the 70% option:
  • The author or publisher-supplied list price must be between $2.99 and $9.99.
  • The list price must be at least 20% below the lowest list price for the physical book.
  • The title must be made available for sale in all geographies for which the author or publisher has rights.
  • The book must be offered at or below price parity with competition, including physical book prices.
  • The 70% royalty option is currently only available for books sold to United States customers.
There’s a lot of speculation about why Amazon is doing this, including the twisted notion that Amazon is out to destroy the traditional publishing industry. Mostly likely, they’re trying to boost volume by putting downward pressure on prices.

What does this mean for authors? Those who self-publish on Amazon with this option earn at minimum a $2 royalty on every e-book. It’s hard to make that kind of profit with any other publishing contract, so this is an exciting option that writers should at least consider. Even those offered a traditional publishing contract should look very closely at the terms and percentages for print and e-books. Authors should ensure the e-book rights revert to them when the print rights do. Do not give your e-book rights away forever! There is too much profit at stake now. If you want a lot more information about this subject, including real sales data, see J.A. Konrath’s blog.

Getting published in print format by a traditional publisher is still most writers’ dream, but one that has less and less sparkle. Publishers are buying fewer novels, paying smaller advances, and doing almost nothing to promote new authors.

Readers, on the other hand, are consuming e-books like candy and this trend will only escalate. If novelists have to do all the work to sell their books anyway, why not make a greater share of the profit?


L.J. Sellers is an award-winning journalist, editor, and the author of the Detective Jackson mysteries, The Sex Club and Secrets to Die For. Her new novel, Thrilled to Death, is available on Kindle now. She also loves to edit fiction and works with authors to keep her rates affordable. Contact her at:
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  1. This is great information. I shared the link with the local Sisters In Crime group.

  2. There's so much to learn about these new deals. I read this morning that one disadvantage of the 70% arrangement is that Amazon has the right to change the price at their discretion, so if you choose $2.99 at the beginning, you could suddenly find the price upped to $9.99, which most likely would have a big negative impact on your sales. I haven't read the contracts yet, so can't speak to the accuracy of this.

  3. I don't believe that's true. Amazon is able to discount books, but they can't raise your prices.
    Even when they discount, they have to pay the royalty based on your list price. Amazon is rational and fair.

  4. I spent some time researching the royalty options on Amazon as I prepared to put up a short story that's connected to two of my novels.

    The 70% option looks good (although not for a short story which would be overpriced at their minimum) UNTIL you read on. If you choose this option, Amazon has the right to sell your book at a sale price of its choosing and you only get 70% of whatever they sell it for. At least that's my interpretation:

    The Royalty will be equal to 70% of the amount equal to the applicable List Price for the Digital Book less the Delivery Costs (as defined below) for the Digital Book. But if we sell the Digital Book at a price below the List Price to match the price at which a third party sells any digital or physical edition of the Digital Book or to match the price at which we sell any physical edition of the Digital Book, the Royalty will be equal to 70% of the amount equal to the price at which we sell the Digital Book less the Delivery Costs for the Digital Book. Our determinations regarding price-matching are final and non-reviewable. If you object to our price-matching determination with regard to one of your books, your sole and exclusive remedy is to switch your Royalty option for future sales of the Digital Book to the 35% Royalty Option as described below.

  5. I can't imagine Amazon will do much price adjusting unless the book is very high volume. I could be wrong, but in the meantime, I'm glad my publisher had opted to double our royalty.

  6. To clarify a few points: Amazon does reserve the right to match the prices of other retailers - and the 70 percent is on the discount price. Otherwise, they do not set your price. If you prefer to stick with the old option, 35 percent of list flat, you can.

    However 70 percent of most discounted prices is still more than 35 percent of the total.

    The other thing I wanted to point out is that Amazon is actually pushing the price point UP with this move. While big publishers are trying to push the prices higher, most indies and small presses were publishing at 99 cents or 1.99.

  7. Like a PUBLISHER is not going to set a price that's to its own advantage and not the writer's? Like they are currently doing with their ebook prices by keeping them artificially high?

    Amazon is selling tons of Kindles, is the most writer-friendly entity in the industry, and this 70 percent royalty is stunning. If you have ever published in NY, you know this is the absolute best time to sell your work in the history of publishing.

    I am not making the case for anyone, but if you find flaws in this offer, please wait on the sidelines for another year or two. There are already going to be millions of ebooks slapped up there of various levels of quality, so the more writers who wait, the better for the rest of us!

    Scott Nicholson

  8. Good advice L.J. It also seems to me that the sooner you get your ebooks out there and begin promoting the books and yourself, the better your chances of getting known.

    You almost need to be a lawyer to understand contracts, be they with a publishing house or Amazon, though.

    Straight From Hel

  9. Good last point, Hel. I wonder if we can get an attorney to comment on this Amazon arrangement. Like Scott, I'm not quite so willing to declare them fair and interested in the writer's well-being. I'm basing that comment on recent bullying tactics perpetrated against major publishers who carry some weight themselves. The author seems to suffer the most from these unhappy situations.

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The Blood-Red Pencil is a blog focusing on editing and writing advice. Some of our contributors are editors, some are authors, and some are writing sheep. Yes, sheep.


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