A Publisher's Conversation with Authors: What Counts as Fair Royalties? A Practical Guide for Authors
Understanding royalties is one of the most important—and most misunderstood—parts of publishing. The numbers look simple on paper, but the basis on which they’re calculated can dramatically change what an author actually earns. Below is a clear, practical overview of what’s typical, what’s fair, and how to protect yourself from the “hidden math” of net‑based royalties. 1. The Two Royalty Models: List vs. Net Royalties on List (Cover Price, MSRP) Calculated on the book’s full retail price Transparent and predictable Example: 10% of a $20 hardcover = $2 per copy Royalties on Net (Net Receipts) Calculated on what the publisher actually receives after retailer discounts and other deductions Retailer discounts are typically 40–55% A “10% royalty” on net often yields far less than a “10% royalty” on list “Net” may include deductions such as freight, warehousing, marketing fees, and returns Which Is Better? List‑based royalties are almost always better for authors Ne...