How You Make Money Selling Books
#1: Royalties
An author's "royalty" is simply the net profit earned for book sales after all costs are deducted. Costs include printing, shipping, taxes, distributor and retailer margins or commissions, and publisher's compensation. For example, say your "Best Seller" book retails for $22.95 each. After deducting a retailer discount of perhaps 55% ($12.63), then deducting the per book print cost of, in this case, $7.25 each, we are left with a Gross Profit of $3.08 per book. From that gross, deduct our commission (in this case 20%) or 62 cents. You would realize a net profit (royalty) of $2.47 for each book sold. Profit margins are similar with ebooks, and though there is no printing cost, the retail figure is lower and resellers' margins are higher, so the net profit earned is comparable to print book sales figures.
Keep in mind that roughly 80%+ of book buyers still prefer traditional, printed books, so we always publish and release a print edition of all books first.
#2: Personal Sales at Retail
You also have the option of purchasing books in bulk quantities to sell directly yourself. You can sell books through your own website, at book signing events at local bookstores, farmer's markets, or other venues, for example. If you're creative, you can discover countless ways to sell books yourself. In this case, you order a number of books that will be shipped to you. You save the retailer discount (40% or more of retail, for example) and we will not collect a commission. Your wholesale cost will be the production cost plus a percentage and/or set dollar amount markup, per unit. The actual cost will depend upon your book's characteristics (type, size, etc.) and the quantity ordered. Selling books this way is the most profitable way for authors to make money.