Did You Co-Write Your Ebook? How to Split Royalties When Publishing
Have you co-authored an eBook and you’re now getting ready to publish? Congratulations! Your work will now be online forever, as a testament to your expertise, devotion, and creativity. But, what about the $$$? No matter how much you care about your readers, ultimately, book sales are about profit.
Yet, once you begin to explore all issues surrounding royalties, the matter becomes more complicated. What percentage should go to each author? How much do publishers get? Who gets to sign the book, promote it in the media, and use it in their portfolio?
Finally, who gets chunks of profit associated with launches, products, courses, and merchandise earned from the title’s fame and publicity? This article answers the question of how to split the accolades once you’ve poured all of your genius juice on paper.
Ebook Royalties: What Are They and Why Are They Important?
Book royalties are chunks of sales profits, most often expressed in percentages, that authors get based on their contract. They vary from title to title, and reflect more than just your portion of writing.
Author’s background, history, reputation, and undeniable fame and influence, all play a part in how much “share” they have in profits. This may sound unfair, but such is life!
You or your co-author may have all the knowledge and experience that your readers need, but unless you have an online presence or an internet fan base behind you, the reality is that the more famous name will reel in sales. In this sense, different participants in creating the book contribute in different ways.
Some authors have online fame, and others have stellar writing skills that earn a reviewer's stamp of approval. There are also co-authors whose style and appeal will sell the book on its own—Cough… YouTube creators who’ve grossed millions selling widely discredited books.
Ultimately, publishers earn a major, often the biggest chunk of sales, to many authors’ dismay and disappointment.
But, like all things that disappoint, publisher’s profits speak of harsh realities behind book sales—books require a lot of resources and marketing, no matter how good the writing is. Now, if you’re in a group of self-publishers, your biggest concern is how to split the royalties. This split should be carefully calculated, fair, and realistic.
Royalties are sometimes said not to exist in self-publishing, but this isn’t true. All authors bring talents and contributions to the table, so profits should be split accordingly.
How to Calculate Ebook Royalties
The book’s retail price is the basis for calculating royalties. From there, each author is given a percentage that reflects their perceived contribution to the book.
This form of calculating is also called “net sale royalties,” with many author’s percentages increasing along with the number of sales (e.g. royalties increase by 1% for each X number of sold copies). However, this is done on a certain, pre-defined basis.
How Often Are Royalties Paid Out?
If you’re self-publishing, it’s completely up to you and your co-authors to decide how the profits will be split, and when to make payouts.
If you’re using a platform like Amazon, the account to which the book is posted on will receive monthly sales royalties, and then it’s up to you and your legal representation to decide how to split the earnings among yourselves.
Co-Writing Books: Share Credits, Share Rights
Royalties are confused with book credits all too often, and have hence earned their place in this article. Royalties, although seemingly straightforward, depend on many factors—credits being a major one.
The bigger the credits, the bigger the cut. In self-publishing, being fair about profit division ensures that you’ll earn and maintain a good reputation among peers and the audience.
With co-authored books, especially those with more than two authors, profit segments are distributed among the participants based on pre-defined terms. These terms may or may not reflect each author’s written contribution and negotiated appropriately.
If two authors wrote 95% of the book, and a third only contributed with a couple of passages—but they have a famous name that sells the book, they’re likely to ask for a higher percentage.
However, this is most often not the case since co-authored books are more than a series of laid out book segments by different authors. Instead, all of the authors participate in creating the content with their own insight and specific talents.
Contributions vary by niche and for each individual book, but the goal is for the entire work to look seamless—as if written by a single person. Without a publisher involved, you have to think about the following aspects before you even begin writing and that they’re properly included in everyone’s contracts.
Is There a Star Author?
It’s important to define whose name(s) will do the heavy lifting of driving in publicity. If all authors are considered equal in these terms, then this should reflect on royalties as well. If not, let your legal experts discuss and suggest what each person is “bringing to the table” and what percentage of net profits is attached to it.
If there is a star author, and it doesn’t happen to be you—don’t despair and feel like someone is getting all the fame for your work. Book sales are difficult to achieve, and the smaller percentage that you might be getting with more sales might yield more money than a large percentage with fewer sales.
What Are Everyone’s Duties and Contributions
As self-published authors, all of you carry the weight of planning, creating, publishing, and then promoting the book. Depending on the niche, define who’ll be responsible for what.
For example, if there are three authors of a fiction book, one might be in charge of outlining and plot creation, the second person will tackle character building, and the third will do meticulous work with world-building.
Finally, when the writing is done the way your team sees fit, someone needs to take over the distribution and publishing process, and there’s a lot of marketing and promoting to do as well.
If you don’t wish to outsource this work, which could cost anywhere from thousands to hundreds of thousands of dollars, then you as authors need to step up. Ultimately, some of the research and publishing will require investments, and those who were able to fund the project may also require a larger percentage.
Post-Publishing Royalties: Lectures, Promotions, Merchandise, and Sponsorships
Be very specific and meticulous about who is to represent the book and how they’ll do it upon publication, and how any royalties earned through this should be divided.
Authors are in charge of promoting their books, true, but many consequently earn rewards, get invited to give lectures, receive offers for TV shows, movies, and merchandise themed after their work.
In the event that your book sees this kind of success, how will these profits be split? Make sure to map this out and include it in your contract. In a team of equals, most authors agree to divide all royalties among themselves, but not everyone will garner the same amount of attention for the title.
Some authors might prove more efficient than others when it comes to representing the book and scoring deals, so make sure to define the terms that apply to any future deals related to the publication.
Split Royalties When Co-Writing: A Step-By-Step Instruction
Here’s a short checklist for splitting royalties when co-writing an eBook:
- Obtain basic identity information from everyone involved in the book writing and publishing and insert it into the contract.
- Define each person’s roles, duties, and deadlines.
- Carefully negotiate the required percentages alongside legal representation.
- Account for post-publishing royalties from lectures, individual and group deals, merchandise, other media opportunities, etc., and agree on the manner in which these profits will be split.
- Define each author’s rights in terms of book representation and any profits that may result from it.
- Name one person to collect monthly book profits and do calculations for distributing funds to others.
- Map out payment details and due dates.
- Define what to do, or who to pass the royalties to in case an author dies or is unable to perform their roles and duties determined by the contract.
Although standard royalties include 7-15% of net book sales for authors, this doesn’t apply to self-published creators. If you’re sharing your title with one or several other authors, make sure to negotiate royalties before you even begin your collaboration.
When sharing royalties for a self-published book, keep in mind that you, as authors, are going to have to “pull the weight” of all other operations, like book design, distribution, promotion, and marketing.
Each author’s ability to contribute to the book and its sales should be accounted for when drafting a contract, so make sure to hire legal experts who specialize in publishing!