At first glance, the Amazon.com Kindle ebook pricing setup and associated royalty rates — displayed in a lengthy table with numbers and boxes and buttons — seems a lot more complicated than it really is.
The bottom line: More flexibility = lower royalty/less flexibility = higher royalty.
What’s your rate: 35% or 70%?
The guidelines below are assuming you’re focusing on selling your mostly-text ebook through Amazon to readers in the US and/or Canada.
You can choose between…
- a 35% royalty (no fees), or
- a 70% base royalty rate (with some fees)
The “royalty” is the amount you earn based on the sales price of your book. For example, 35% of a $3 ebook would be $1.05, while 70% would earn $2.10. You can play around with the royalty rate variables here.
Before you think “duh — more money for me is better!” — there’s more you need to know.
If you pick the 70% royalty rate…
- Your price range is limited: Your ebook can only be priced between $2.99 and $9.99.
- The price you choose must be at least 20% below the list price of any physical (print) edition of the book.
- You must pay “delivery costs” on each ebook sold — roughly 5-20 cents for a standard novel (mostly text with a couple illustrations) — a fee based on file size to compensate Amazon for the bandwidth used when the customer downloads your title. If your book is photo or graphic-heavy, that delivery fee will be higher. (You will find out the fee to be charged after you upload your book and cover.)
- You are required to participate in Kindle Book Lending (where one customer can lend an ebook to another for 2 weeks at no charge).
- The content you’re publishing cannot be in the public domain.
If you go with the 35% royalty rate…
- Lots of pricing flexibility: You can list your book anywhere between $0.99 and $200.00.
- No delivery costs.
- You can opt-out of Kindle Book Lending.
Again, the above is geared toward selling in the USA and Canada. You can easily add additional territories, but the royalty percentages vary. Click here for those details.
Free is not easy
One thing you may have noticed about both of the above pricing structures: You cannot choose to list a book for free — or below 99c — on Amazon.
The only legit way to give your book away is to enroll it in the KDP Select program. This means that while Amazon.com is the one and only place people can buy your ebook for the duration of the three-month term, you are allotted five free giveaway days every 90 days.
If you’re truly determined to give away your book on Amazon.com, and have some time to spare, you can also try a convoluted process of giving away the book for free on a competing site, hoping that Amazon will be forced to price-match. Get a how-to in the article How can I set my eBook price to $0.00 on Amazon? by Faydra Deon over at Independent Author Index.
FYI: Barnes & Noble won’t let you price a Nook book for less than 99 cents, either. You can give your ebook away for free via Smashwords, but that might not be enough to force a Kindle price match.
What’s the answer?
What makes sense for you and for any one particular book may not apply to another — you have to weigh a lot of variables and decide for yourself what’s the best fit. (Get some insight from other authors and publishing pros here: 1 question, 10 answers: What’s the best way to price your ebook?)
The good news, no matter which plan you choose: You’re not locked in to a single price. You can experiment with charging different amounts, and even try both royalty tiers. Lest you think it’s not worth the effort, remember: being willing and able to adapt to change is always the wisest strategy of all.
Information current as of August 2013