Understanding Your Royalty Rates

A Royalty is the money that’s left for the author after a book is sold and any retailer and production costs have been subtracted from the retail price. With a traditional publisher (and unfortunately most self-publishers), that profit gets shared between the author and the publisher with the publisher keeping the majority of the profits. At Liberty Hill Publishing, we think the old way of doing business is wrong. You did most of the work! Why should your publisher keep most of the profits?

How to Calculate Your Royalty

In its simplest form royalties are calculated as follows: Retail Price minus Retailer Charges minus Production Costs equals Royalty (or Net Profit).

  • Retailer charges are the portion of the sale that the booksellers (Family Christian Stores, Amazon.com, Barnes & Noble, etc.) keep to cover their costs and make a profit.
  • Production costs include things like printing, shipping, taxes, etc.

What does this mean for you in actual dollars?

Below are examples based on an average book retailing for $15.99 with an average production cost of $3.90.

Royalty Payments

If all of this seems overwhelming, don’t worry. The great news about tracking book sales and royalties is we do all the work. We get reports from all the distributors, bookstores, website and other retailers that are carrying your book. You’ll get an easy to read online statement that shows exactly how many copies sold, when they sold and what your net profit is. We offer monthly online statements and payments so you can keep track of what’s happening with your book and how much you’re earning. We also have Author Representatives available to help with any questions that you may have.

Note: Royalty checks are not issued until the royalties owed exceeds $25 for U.S. citizens and $50 for foreign citizens.


Still have questions about royalties? Call us at 866-381-BOOK (2665). We would be happy to help.

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