Why do traditional children’s or young adult publishers only give 10% royalties as royalties? Is this too much or too little? Who keeps the remaining 90%? How is the royalty percentage of a children’s book calculated?
There are many questions that new authors ask themselves new authors when they are informed that they will only receive 10% of the retail price of their books sold in distribution.
From our experience, as a traditionalchildren’s publisher , we know that this is one of the issues that makes you most uncomfortable or raises the most doubts, so we will now explain how the royalty percentage of a children’s book is calculated and who are the agents that interfere in them.
It is very likely that you have already tried the world of self-publishing and you have been promised “all kinds of good things”: Many new authors tell us: “x” publishing house gives us 30% or even 40% of the RRP. Of course! because they are your books, the books that self-published authors have previously paid for. In other words, when you self-publish, you finance 100% of the printing of the books that the children’s or young adult publisher puts into distribution (if it does). Don’t forget that they are your books: it is logical that, if they sell, you will receive a high percentage of the sales, and the self-publishing publisher will keep a small percentage for management expenses. If a self-publishing publisher offers less than 40% royalties to its self-published authors, be wary of it.
Now we explain how the royalty percentage of a children’s book is calculated.
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The distributor
As we have already mentioned, when a children’s or young adult book enters the traditional distribution circuit, many participants come into play, among which the following stand out DISTRIBUTOR. In the case of a national distributor, this one takes 55% of the RRP of the children’s or young adult book, or even 60% if it is a special time such as the literary fairs between April and May! Why does it get so much?
Bookstores
Because the BOOKSTORES usually receive from them between 30% and 45%, depending on whether it is an independent bookstore or an important chain in the sector, such as Corte Inglés, Fnac, Amazon or Casa del Libro (the latter take 45% of the RRP, but all authors like their children’s or young adult book to be present in them, right?).
At this point, the children’s or young adult publishing house already has only about 40-45% of the total. It’s very hard, yes, but that’s the way it is, dear authors!
The printing press
Next, a new agent enters the market, the printing house. It is usual that the production cost of children’s or young adult books ranges between 16-20% of the retail price of each book. If the cost were higher, we would enter in losses, for that reason it is necessary to have always very present the production cost.
It is from this unit production cost that we extract (by mathematical calculation) the retail price of each children’s or young adult’s book. After removing the production cost, the children’s or young adult publisher only has in its hands the other 20-25% of the sales value of the children’s or young adult book.
This last figure is where you get the royalty percentage that you always see when you talk to any traditional children’s or young adult publisher.
What are the costs of editing, publication, distribution, promotion, etc.?
Publishers of children’s or young adult books are aware of the difficult task they face from the moment they receive a manuscript, evaluate it positively, and decide that they are interested in it because they find value in it. From this moment until the children’s or young adult book reaches a bookstore window, there are many difficulties and costs (both expected and unexpected) to be faced. It is only because of the great hopes we have for the sale of our selected children’s or young adult books that we have the cultural goodness to do such a complicated task at almost zero cost, since, from the retail price of each children’s or young adult book sold, we charge no more than 5% to all these costs derived from the publishing and distribution process.
How much does the author of a children’s book earn, what percentage of royalties does the author receive?
The author, therefore, is considered by our children’s and young adult publishing house as an “equal partner with the publisher”, since he/she obtains 10% of the RRP of the children’s or young adult’s book. Obviously, in the case of several authors, this 10% must be divided among them (whether there are two or more than two).
The publisher
As you can see, in the end, any traditional children’s and young adult publisher receives a profit (before taxes) of 10% of the retail price of each children’s or young adult book launched on the market. Unbelievable, isn’t it? Yes, that’s how the percentage of the retail price of each children’s or young adult book sold is divided. Did it seem that the children’s or young adult publisher takes 90% of the retail price? Thinking this is a normal mistake that every new author goes through, even if only for a few seconds, before getting the right advice (it’s okay!).
As you can see, in the end, children’s or youth publishing house and author are on the same level and both receive the same from each project.
A complicated market but full of illusions
It is true that this is a complicated market, and a traditional children’s or young adult publisher has to sell a lot of children’s or young adult books in order not to make losses, and that is why we take so many steps: the evaluation, the decision of the formats, the bet for the adequate printing for national distribution, without falling short, but without assuming large printings out of reach for a market collapsed with novelties every week. Dear authors, as a traditional and specialized children’s publisher, we juggle every month to launch the best children’s and young adult books with the best possible positioning in physical bookstores, without dying in the attempt.
We repeat, it is a very complicated sector, but we also have before us a world full of illusions and possibilities. Do you want to enter it? Then get ready.
Once you understand how to calculate the royalty rate for a children’s book, it’ s clear to you that you must dedicate yourself to it with all your heart and put everything you have into it. It sounds hard… but we’re sure the rewards will be worth it. Our advice? Surround yourself with a professional team that is willing to get excited about every step of your project and that will guide you clearly at all times.
If you think it could be us, don’t hesitate! Contact and make your dream come true.
Frequently asked questions about book royalties
What is a royalty?
Fee payable to a patent holder for using or commercially exploiting a patent
What is a book royalty?
Payments that a writer receives passively or automatically for the sale of his or her book.
What is a book’s retail price?
This is the retail price. To calculate it, factors such as royalties and production costs are involved.
How much do I charge for a royalty?
Every time someone purchases a book, a percentage goes to the benefit of the author, as royalties. To receive it, the book must be registered
How is the royalty rate for a children’s book calculated?
A number of factors come into play in setting this percentage, such as distributors, bookstores, printers, derived costs, authors, publishers and the market.
What is the percentage destined to distributors?
It is 55% or 60% of the retail price of the children’s or young adult’s book.
What is the percentage destined to bookstores?
They receive between 30% and 45%, depending on the type of bookstore.
What is the percentage going to printers?
Printing presses represent a production cost of between 20-25% of the book’s retail value.
What is the percentage allocated to the costs of editing, publication, distribution, promotion, etc.?
This is the group with the lowest percentage. No more than 5% of all these costs
What is the percentage allocated to the authors?
They get 10% of the book’s RRP. It will always be 10%, even if they are more than one author. They will share that 10%.
What is the percentage going to publishers?
Receives a profit (before taxes) of 10% of the retail price of each children’s or young adult’s book launched in the market.
More Information
Bibliography
- Official State Gazette (Government of Spain). Intellectual Property Law (Revised Text):Title V – The publishing contract and author’s remuneration.
- World Intellectual Property Organization (WIPO). Basic principles of copyright, intellectual property and royalties (Official web viewer).
- Federation of Publishers’ Guilds of Spain (FGEE). Domestic Book Trade Reports (Official statistical data on invoicing and copyright).