A sneak peek of our guide to marketplaces and royalties

Every author worries about getting the best possible royalties for her ebook. Despite this, finding reliable, independent information about the different retailers has always been tricky – until now. We’re proud to announce that we’re putting the finishing touches on a comprehensive guide to ebook marketplaces and royalties, which we’ll release shortly. It will cover everything from picking a distributor, to standard file formats, and to royalty rates, taxes, and delivery fees. We’re really looking forward to releasing it, so we thought we’d give you a preview with this excerpt about the thorny issue of price restrictions. Sign up for our newsletter to get the full guide this week!

Introduction

Significant and intricate restrictions on pricing are imposed by Amazon, Barnes & Noble, and Apple, the three biggest ebook retailers. There are also pricing requirements imposed by law in some jurisdictions, such as Germany, and compliance with these is generally contractually determined to be the publisher’s responsibility. Please note that some of these restrictions only apply to authors publishing as individuals – aggregators such as Vook may not be subject to them.

Amazon

For Amazon’s Kindle Direct Publishing, pricing requirements differ depending on the royalty option chosen by the author: see the chart below.

Amazon charges delivery fees for books sold under its 70% royalty option, but not under the 35% option, which is why minimum prices are tied to file size for the latter. Similar restrictions exist on sales in other markets—see this page for more information. Distributing through an aggregator with a special contract—such as Vook's wholesale contract—can avoid the pricing restrictions and delivery fees associated with KDP.

Barnes & Noble

When authors distribute through B&N's self-publishing platform PubIt!, pricing restrictions apply. The list price must be between $0.99 and $199.99, and should be chosen with regard to the fact that your royalty rate will be 40% unless your book is priced between $2.99 and $9.99, which will increase your royalty rate to 65%. The price in British pounds is auto-calculated daily according to the current exchange rate, but authors and publishers have the option to set this price manually. Barnes & Noble requires that the price of ebooks sold through its store is no higher than any available print or other digital edition. Read more about B&N pricing here. Again, working with distributers with special contracts will lift these terms.

Above: Barnes & Noble has a special promotional section for ebooks priced under $5

Apple

Apple’s pricing structure is intricate and tied to the price of the ebook’s print version, if there is one. Prices may only be selected from certain “tiers” chosen by Apple, which start at $0.99 and move up to $39.99 (with equivalents in overseas currencies). Apple’s form contract requires that the price of ebooks sold in the US never exceeds any paperback list price, and generally sets a maximum digital price just above half of the hardcover price for books priced above $10. For books on the Hardcover New York Times Bestseller Lists, more specific prices are set. Similar restrictions exist on sales in other markets.

Above: The lower range of Apple’s price “tiers”

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