Episode 59 : Author Income
In my first solo show for a while I use the information I learnt from my interview with Emmanuel Nataf about how much self-publishing costs to create a spreadsheet to work out exactly how many eBooks you’ll need to sell to cover these costs, get these costs plus a minimum wage and to a comfortable “average” income from an individual book.
It’s worth pointing out that like with any of these kind of estimation processes, there are a number of assumptions that we need to make to reach some figures:
- I assume that the book has developmental and copy editing and a typical priced cover.
- I assume we spend about $1000 on marketing and other unspecified costs of the book.
- I assume that we spend 100 days writing, working with the editor and marketing the book, spending 7.5 hours a day.
- I’m just looking at eBooks as this is the most lucrative market and is easier to work out than paperbacks.
- I also for this example assume that the only source of income is from sales, not KDP rentals.
- I’ve taken a US minimum wage figure of $7.50 an hour and an average wage of $25 an hour.
- I’ve assumed a 2MB eBook file.
So what are the figures. I’ve ran the numbers for three sizes of book 40,000 words, 60,000 words and 80,000 words at a variety of eBook prices for both the US and the UK.
For the US eBook market I get the following totals:
|eBook Cost ($)||$0.99||$2.99||$3.99||$4.99||$5.99||$9.99|
|US Delivery Cost||$0.30||$0.30||$0.30||$0.30||$0.30||$0.30|
|Sales to Breakeven (40k)||9726||1880||1352||1055||866||504|
|Sales to Breakeven (60k)||11977||2315||1665||1300||1066||620|
|Sales to Breakeven (80k)||14228||2750||1978||1544||1266||737|
|Sales to Minimum Wage Level (40k book length)||19063||6403||5551||5073||4767||4182|
|Sales to Minimum Wage Level (60k book length)||19843||7183||6331||5853||5547||4962|
|Sales to Minimum Wage Level (80k book length)||20623||7963||7111||6633||6327||5742|
|Sales to Average Wage Level (40k book length)||57483||13827||10891||9242||8186||6171|
|Sales to Average Wage Level (60k book length)||58263||14607||11671||10022||8966||6951|
|Sales to Average Wage Level (80k book length)||59043||15387||12451||10802||9746||7731|
Several things leap out:
- Selling eBooks at 99c, while good for promotions is never going to make you that much money. You need to sell almost 10,000 copies to just break even on costs. For a 80,000 word book you’d need to sell almost 60,000 copies to make an average amount of money for the time spent on the book.
- The increase in royalty rates at $2.99 makes a BIG difference. The actual royalty rate isn’t actually 70% because of the cost of delivery that is now charged (per MB), but you only need to sell about a fifth of the books that you need to sell to reach the same level of income.
- If you can sell your book for $9.99. the maximum level of the 70% royalty, you only need to sell 504 copies to make your money back for a 40,000 word book and 737 for a 80,000 word book. To make a comfortable average wage you need to sell between 6171 and 7731 books. The delivery charges take less of a percentage of your royalties and of course you get more back per book sold. Of course in many genres $9.99 books will not be competitive, but it does put pricing into perspective.
I did the same exercise on the UK market, translating Reedsy’s costs and the time costs into pounds at a rate of $1.32 to the pound.
|eBook Cost (£)||£0.99||£1.99||£2.99||£4.99||£7.99||£9.99|
|UK Delivery Cost||£0.20||£0.20||£0.20||£0.20||£0.20||£0.20|
|VAT at 20%||£0.17||£0.33||£0.50||£0.83||£1.33||£1.67|
|UK Royalty %||18.33%||51.30%||53.65%||55.53%||56.58%||56.93%|
|UK Sales to Breakeven (40k)||14066||2501||1591||921||565||449|
|UK Sales to Breakeven (60k)||17322||3080||1960||1135||695||553|
|UK Sales to Breakeven (80k)||20578||3659||2328||1348||826||657|
|Sales to Minimum Wage Level (40k)||25249||6588||5121||4040||3464||3277|
|Sales to Minimum Wage Level (60k)||25840||7179||5712||4631||4055||3868|
|Sales to Minimum Wage Level (80k)||26431||7770||6303||5222||4646||4459|
|Sales to Average Wage Level (40k)||80815||16468||11408||7679||5695||5051|
|Sales to Average Wage Level (60k)||81406||17059||11999||8270||6286||5641|
|Sales to Average Wage Level (80k)||81997||17650||12590||8861||6877||6232|
A big difference is that the figures are in general significantly higher because of the impact of VAT (Value added tax), which is now charged at a rate of 20%. While the figures aren’t directly comparable, £1.99 (approximately $2.63) requires almost 700 book sales than $2.99 to break even. This is purely due to VAT.
There is a silver lining for us UK based authors and those selling books mainly to the UK. The 70% band for royalties goes up to £9.99 ($13.19) rather than $9.99, and this price point allows UK sales to potentially give a quicker return than the $9.99 US eBook sales, breaking even at 449 eBooks rather than 504 for $9.99 in the US.
For books over $9.99 and £9.99 the 35% royalty rate applies to the whole amount, so in my opinion they aren’t even worth considering in these tables. Amazon is strongly managing prices this way for self-publishers.
If you liked this show then you will probably like How Much Does Self-Publishing Cost with Emmanuel Nataf, Organising a Mega-Book Launch with Kate Erickson and What’s Hot in the Kindle Store with Alex Newton of K-Lytics (Episode 33).