If you're going to make a living by writing books Wholesale Soccer Jerseys Online , you need to understand how a book royalty gets calculated. That's how the author gets paid, ultimately, if the book becomes a successful bestseller. What's more, the royalties the publisher expects the book to earn determine the advance the publisher will pay the writer up front.
Royalty Accounting Only Starts Off Simple
Royalty calculations start out pretty simple. Royalties get calculated by multiplying the price of a book by the royalty percentage. Sometimes, the price used in the calculation is the retail price that the customer pays for the book in some bookstore.
Assume that you've written a book that retails for $20. Further assume that the royalty percentage is five percent. To calculate the royalty you earn per book sold you multiply five percent, or .05 Wholesale Soccer Jerseys Free Shipping , times $20. The result equals $1. So that's the royalty you earn for every book the publisher sells.
Many authors and agents prefer royalties based on retail prices. The calculation is simple to understand. It's simple to compute. And there are limited opportunities for argument about whether the calculations are correct.
Big Authors Often Do It Differently
Some very powerful authors receive a set royalty amount per book'such as $1?which is essentially a variation of the royalty based on a retail price. The agent, through his agent, says something to the publisher such as, ?I don't care what you sell it for, just give me $1.?
Wholesale-price Royalties are Common?and Complicated
Sometimes, the price used in the calculation is the wholesale price that the publisher receives from the bookstores and wholesalers who buy the book.
Royalties based on wholesale prices?which are technically called net royalties--get a little more complicated. Again assume that you've written a book that retails for $20. Assume that the royalty percentage is ten percent. Ten percent Wholesale Soccer Jerseys From China , in other words, is the royalty percentage that the publisher applies to the wholesale price that its customers pay for your book.
Okay, so far so good. Unfortunately, calculating the wholesale price of a book is tricky. Publishers calculate the wholesale by discounting the retail price by some percentage. And the discount percentage depends on the number of books that the bookseller or wholesale orders from publisher. If a bookseller or wholesaler buys from one to four copies, the discount might be 46% which means your $20 book wholesales for $10.80. If the bookseller or wholesaler buys between 51 and 500 copies, the discount might be 52% which means your $20 book wholesales for $9.60.
These differences affect the royalty you earn on a book Wholesale Soccer Jerseys China , of course. Assume that the publisher pays you 10 percent. If the publisher sells a book for $10.80, you earn $1.08. If the publisher sells a book for $9.60, you earn $.96.
And here's something else to consider: Using the earlier price discount schedule, you might assume that the only time the publisher discounts your books by the biggest possible discount is when the publisher receives a large order for your books. But the bookseller or wholesaler applies the discount to the total order they place. If Barnes and Noble orders five hundred copies of some other bestseller that your publisher sells and three copies of your book, the price for your books is also calculated by discounting the retail price by the biggest discount, which might be 54%.
You now need to understand something else that's really important. Publishing contracts usually don't specify just one royalty rate. They specify a schedule of royalty rates. Normal sales to bookstores use the regular rate. And authors always focus on that rate.
However Wholesale Soccer Jerseys , other rates come into play in special situations. If your book sells an enormous number of copies, such as more than 25,000, the contract may say you get a higher royalty rate (perhaps 15% instead of 10%, for example). If your book sells through a book-of-the-month club, outside the country Wholesale Authentic Jerseys , or at the biggest price discount, the contract may say you get a lower royalty rate (perhaps 5% instead of 10%, for example).
Now at this point, you may be thinking that I'm making an awfully big deal about a situation where we're talking about pennies. But the combination of these price discount schedules and royalty rate schedules hugely impact your royalties.
Suppose you and a publisher agree that you earn a 10% wholesale-price-based royalty on a book that wholesales for $10. Further suppose that there are two exceptions to this accounting treat. You get only a 5% royalty on deeply discounted sales, but you get a 15% royalty on any copies sold after the first 25,000 units. Here the various royalties per unit amounts you might earn:
1. If your publisher sells a copy of your book for $10.80 and it's not deeply discount and the book hasn't yet sold 25 Wholesale Jerseys Cheap ,000 copies, you earn $1.08.
2. If your publisher sells a 'deeply discounted? copy of your book for $9.20, you earn $.46.
3. If your publisher sells a copy of your book for $10.80 and it's not deeply discounted and the book has sold 25,000, you earn $1.62.
Those are very large differences. Take the situation where a book becomes a big success and sells 50,000 copies. In the worst possible case Wholesale Jerseys Online , you might earn $23,000 in royalties (calculated as 50,000 times $.46). In the best possible case, you might earn $68,000 in royalties (calculated as 25,000 times $1.08 plus 25 Wholesale Jerseys Free Shipping ,000 times $1.64).