In this post I’ll share how royalties work when self-publishing at Amazon and how this information is changing my approach to selling books.
For 2021 I wrote ten goals into my Google Keep. One of the goals was to sell 250 copies of Story Secrets from Scripture this year.
Kindle Direct Publishing
Anyone can write a book at sell it on Amazon. The Kindle Direct Publishing site is the author/publisher management tool for creating, promoting and selling books. A key step in the process is to set a price for the book. The royalty payment – what I receive as the author/publisher – is what’s left after Amazon prints the book and takes a share of the price. My royalty is $3.78 per book. Story Secrets from Scripture has 112 pages.
Breakdown of My Goal
As I got serious about plans to achieve this goal, I mentally calculated my royalty per book times 250 books.
250 x $3.78 = $945.00
I then realized that I could easily set aside $20 per week and end up with more money than from selling books – without any marketing or promotion required. At the end of 2021 I would have $1,040!
In reality, $1,000 saved over the course of the year is not much. It is sufficient to cover a weekend trip or pay for a few Christmas presents.
Working For Amazon
I recently saw this ad on Twitter. Amazon has been promoting that its starting pay is $15.00 per hour. This is over twice the federal minimum wage of $7.25.
A year’s wages at Amazon (50 forty-hour weeks) pre-tax is $30,000. As easy way to calculate an annual salary from an hourly wage is to take the hourly wage times 2,000 hours.
$15/hour x 40 hours x 50 weeks = $30,000
Royalty vs. Salary
This is when I really started to think about the effort to publish a book: The Amazon annual wage ($30,000) divided by my royalty ($3.78) rounds to 7,937 books.
That means I would need to sell almost 8,000 books to match an annual income equivalent to working full-time at Amazon! I do not work at Amazon, but I’m simply using Amazon’s hourly wage as an example.
According to the U.S. Bureau of Labor Statistics, the average annual salary for May 2020 – most recent data – in the U.S. was $56,310. The equivalent of this salary in books (based on my royalty of $3.78) is 14,897 books!
The number of books in these comparisons is huge.
Questions to Ponder
Below is a list of questions I am now considering …
- Do I want to earn an income from publishing books or use books as a promotional tool?
- If I want to earn significant income from selling books, what strategy should I use? Clearly, relying on sales of single books or small orders of multiple books likely won’t help me get to a goal of 250 books let alone the much larger quantities mentioned above.
- How can I tap into corporate level sales to sell a large number of copies with a single purchase (if I want to earn income from the book)? Some good news is that my “author copy” price is the printing price ($2.19). If I order large quantities and resell them, I obviously have a lot more room to negotiate with a buyer at a reduced bulk price and still earn more per book than via Amazon.
This is an ongoing process, and I will provide updates here as I answer these questions and develop a strategy, if that’s the direct I take.