Kindle Publishing: File Size vs Royalty Rate

Time for a helpful hint of the day.  If you publish e-books independently on Amazon (called KDP--Kindle Direct Publishing), you know about the different royalty rates...but you might not know a few important details.  If you're new to publishing, here's what you need to know

If you price your e-book between $2.99 and $9.99, you have two options:

70% royalties
35% royalties

70% sounds better, right?  Well, mostly yes.

But don't forget about delivery costs.  The 70% royalty rate has delivery costs.  The 35% royalty rate doesn't.

What are delivery costs?  Amazon charges you for delivering your ebook to the customer.  The delivery charge is based on the converted book's file size, and it's taken directly out of your 70% royalty.  For novels or narrative non-fiction without any fancy graphics or images, the delivery cost is not significant enough to stress about.  For anything with photos, illustrations, graphs, maps, etc., your file size will be a lot bigger and thus so will your delivery charges.  They can really start eating into your profits, especially if it's a big file and a low list price.

Examples:

My novel, Far-Knowing, has a delivery cost of 6 cents.  So, if it's priced at $2.99, I get 70% of 2.99 minus 6 cents, which somehow comes to $2.05 of royalties per copy sold (Amazon does creative math, but luckily it's creative in our favor). 

My travel guide, Cruising Alaska on a Budget (with pictures and illustrations), has a delivery cost of 24 cents.  That's after I used Gimp (a photo editor) to individually scale my images down so they're still pretty good quality but don't take up so many kilobytes.  I also saved the manuscript as an html file then zipped up all the photo with the text instead of just uploading my Word document, as some people do.  This also reduces final file size.  If I hadn't done so much work to scale things down, delivery costs would have been well over 65 cents, which would have eaten up about a fifth of my profits when it's priced at $4.99, almost a third of my profits if it were priced at $2.99.

Delivery costs mean that you should pay attention to your file size and try to reduce where possible.

Even with the delivery costs, however, the 70% royalty rate is almost always better.  But not always.  So be aware.

If you price your book between 99 cents and $2.98, you must go with the 35% royalty rate.

Why price something so low?
-If it's short
-If you want to give your fans something at a bargain price
-If you want to use it to drive sales to other books

The other advantage here is that there is no delivery cost, so if you have something graphics-heavy, you don't have to worry so much about scaling things down.

However, here's what isn't immediately obvious in the KDP information: if your file is too big, you cannot price it at 99 cents...or even 1.99.

I planned to sell my new travel guide, Hiking Alaska from Cruise Ports, for less than $2.99 because it's a relatively short book.  Plus, I wanted to have more pictures of the beautiful hiking trails, so I didn't want to have to worry about delivery costs.  However, after preparing my file and uploading it, I discovered that KDP wouldn't let me price it at my promotional 99-cent book-launch price.  Why not? I asked.  It took a bit of Googling to find this page:  List Price Requirements.  Here's the most important bit:

99 cents pricing--your file must be under 3 MB
$1.99 pricing--your files must be under 10 MB 

Mine was 4.5 MB.  I had to do a lot more scaling down to get it to 99 cents.

So, I learned some new things with this new book, and I thought I'd share.

Want to see those pictures I had to scale down?  

Buy it here:  Hiking Alaska from Cruise Ports