While Amazon has created a marketplace that makes it easier for readers to discover new and interesting books, it has also created a monster. More and more often, self-publishing authors are discovering that Amazon takes a big chunk out of their earnings. Below, you’ll discover everything you need to know about how much Amazon takes from writers, including details on how to reduce your take-home pay and how to negotiate for better deals.
What Is Amazon’s Royalty Structure?
Before we delve into how much Amazon takes from writers, let’s examine how the company calculates author royalties. At present, all ebooks sold through Amazon are considered “Amazon Originals,” and the company takes a 30% cut of the revenue. For print books, which are not original works, the royalty is set at between 10% and 30% of the sale price.
In theory, this arrangement creates an incentive for Amazon to provide value to authors. If the deal seems too good to be true, that’s because it usually is. However, as with any contract, there are exceptions to the rule. If you’re a best-selling author with a large audience, you may be able to ask for a higher royalty rate.
How Does Amazon Take A Cut Out Of My Royalties?
When an Amazon author sells a book on the company’s website, the percentage that the company takes from the sale is shown in two places on the revenue disclosure form the author must file. First, under the entry for “Other Revenue”:
- For digital sales, the percentage is 30%
- For print sales, the percentage is a smaller number, which varies by author and by the print run
Then, in the “Royalty” section of the form:
- For digital sales, the percentage is 30%
- For print sales, the percentage varies by book but is usually between 10% and 30%
In addition to taking a percentage of the revenue from digital and print book sales, Amazon charges authors fees for using their services. These fees vary by product, but can amount to hundreds of dollars per month for a premium product.
What Are Some Of The Other Fees That Amazon Charges?
In addition to taking a percentage of the revenue and charging monthly fees, Amazon also charges several other fees that have the potential to eat into your earnings. These include:
- The credit card processing fee, which is shown in the table below, can vary between $0.30 and $0.99 per transaction, plus 2.25% of the total purchase amount
- Sale and delivery fees (which may be zero if you’re in the US) that range from $4.99 to $7.99 per item plus a percentage of the total purchase amount
- The fulfillment processing fee, which is shown in the table below and can range from $0.30 to $0.99 per item plus a percentage of the total purchase amount
- The Amazon Care fee, which is a medical policy purchased through Amazon that covers the cost of professional medical services and supplies that you may need (e.g., a band-aid, flu shot, etc.)
- The Amazon Recycle fee, which is shown in the table below and can range from $0.30 to $0.99 per item plus a percentage of the total purchase amount
- The early bird bonus, which is shown in the table below and can range from $0.01 to $0.32 per item plus a percentage of the total purchase amount
- The standard checking account maintenance fee, which is shown in the table below and can range from $0.05 to $0.25 per month plus a percentage of the total purchase amount
In short, there are a number of fees that Amazon charges, and while many of them seem insignificant on the surface, they can add up quickly. The key is to understand how much you’re likely to lose from each one.
Do I Have To Pay For Each Book That I Sell On Amazon?
If you decide to go the self-publishing route, you’ll likely have to invest in a book budget. Depending on how much you want to spend, you may need to decide how many books you can afford to publish. If you do decide to go the traditional route, you can elect to have your publisher take care of the budgeting for you.
Is Amazon A Good Place To Be Or An Bad Place To Be A Writer?
As a writer, you may have thought that Amazon would be the perfect place to find an audience. After all, it’s a well-known fact that many authors get discovered through the platform. However, as with any contract, there are negatives to consider. Below, we’ll discuss some of the things that you may need to know before entering into a promotional agreement with Amazon.
The Downsides Of Promoting Your Work On Amazon
While Amazon has created a marketplace that’s useful to readers, it’s also created a monster. More and more often, authors are discovering that Amazon takes a big chunk out of their earnings. Below, you’ll discover everything you need to know about how much Amazon takes from writers, including details on how to reduce your take-home pay and how to negotiate for better deals.
How To Get Your Book On Amazon
Let’s discuss the benefits of being discovered on Amazon first. If you decide to go the self-publishing route, you may decide that having your book on Amazon is a desirable option. After all, it will mean that more people can read and enjoy your work than ever before. As a writer, you may benefit from the increased visibility that an Amazon listing brings. In addition, you may choose to promote your book on social media in order to gain more exposure.
Negotiating Your Royalty Structure With Amazon
It’s always a good idea to negotiate. Even if you’ve already entered into a promotional agreement with Amazon, it never hurts to ask. As a rule of thumb, always ask for more money upfront. That way, you’ll have more money left over at the end, if things go well. It’s also a good idea to ask for more money when your book is near its publication date.
Reducing Your Royalties
Amazon takes a considerable amount of money out of every author’s pocket. Depending on how many books you’ve sold on the platform and how much money you’ve made, you may be entitled to a royalty rebate. If you decide to pursue a royalty rebate, you’ll need to provide proof of sales and earnings as well as fill out a rebate form, which can be found online. While Amazon strives for fairness, there are no guarantees in life, and it can be a lengthy and strenuous process to get your money back. Ensure that you’re legally bound to pursue this route before doing anything else.
Overall, How Much Does Amazon Take From Authors?
While it can be beneficial to be discovered on Amazon, it can also be very costly. Depending on your situation, you may or may not be entitled to a royalty rebate, but it’s always a good idea to ask. In most cases, Amazon takes a big chunk out of an author’s earnings, which can easily amount to hundreds of dollars per month, not to mention the cost of books that you sell on their platform. If you’re serious about being a writer, then proceed with caution.
As a self-published author, you may have thought that Amazon would be the perfect place to find an audience. After all, it’s a well-known fact that many authors get discovered through the platform. However, as with any contract, there are negatives to consider. Below, we’ll discuss some of the things that you may need to know before entering into a promotional agreement with Amazon.