How Book Royalties Actually Work: A Zambian Author’s Guide

A royalty is the author's share of the money a book earns, usually expressed as a percentage. On its own, the percentage tells you surprisingly little. "Ten per cent" could mean ten per cent of the price printed on the back cover, or ten per cent of the much smaller amount a publisher receives after a bookshop has taken its share. Both can honestly be described as a 10% royalty, yet they produce very different payments.

Before comparing publishing offers, put each percentage beside three other facts: the amount it is calculated on, the sales it covers and the date on which you will receive an account. That simple exercise tells you more than the headline figure. At Sotrane Publishers, we believe an author should be able to follow one copy from the reader's payment to their own royalty statement. If that path cannot be explained in plain words, the agreement needs more work.

Start with one copy, not a thousand

The clearest way to understand a royalty offer is to work through a single sale. Take a paperback with a cover price of K150. The figures below are illustrations for comparison, not any publisher's actual terms.

With a royalty of 10% of the cover price, each eligible copy sold earns the author K15, which is K150 multiplied by 0.10.

Suppose instead that a bookshop takes its agreed share and the publisher receives K90 for the same copy. A royalty of 10% of the publisher's receipts then earns the author K9, which is K90 multiplied by 0.10. A royalty of 20% on those same receipts would earn K18. A larger percentage can therefore pay more or less than a smaller one, depending entirely on what it is calculated on. Ask any publisher for a sample calculation using the proposed price and the channels through which the book is likely to sell, and never compare offers by their percentages alone.

The agreement should define its terms. If it uses "net receipts", find out whether that means the amount actually received from the bookshop after its discount, and which taxes, delivery charges or other deductions are excluded. "Net profit" deserves even closer attention. If costs are deducted before your share is calculated, the agreement should say which costs, how they are measured and whether you may see the supporting figures.

The percentage matters far less than the amount it is calculated on.

A book in a shop is not necessarily a book sold

Suppose 300 copies leave the printer and 100 go to a bookshop. The author cannot assume that 100 royalty-earning sales have taken place. The shop may hold the books on consignment, buy them outright, return unsold copies or pay only after its own customers have bought them. The agreement and the actual sales arrangement decide when a sale counts.

That is why a royalty statement should distinguish copies printed, copies held in stock, copies supplied to each channel, copies sold, returns and copies given away for review or promotion. A publisher may also sell directly at events or online, and those sales may bring in different amounts from bookshop sales. If the contract sets separate rates for direct sales, heavily discounted sales, eBooks or other formats, the statement should show them separately. Our guide to how book distribution works in Zambia explains why moving stock into a shop is only one step in reaching readers.

What an advance really does

An advance is money paid to an author before the book has earned it, and it is usually recovered from the author's future royalties before any further royalty payment is made. It is not a bonus added on top of later sales.

Take an illustrative advance of K2,000 and royalties of K10 per eligible copy. After 100 copies, the author has earned K1,000 in royalties but has already received K2,000, so the statement may show K1,000 of the advance still to be recovered and nothing further to pay. At 200 copies, earned royalties reach K2,000 and the advance has been fully recovered. If another 50 copies then sell on the same terms, they earn a further K500, payable according to the contract's reporting and payment schedule.

That arithmetic assumes a single rate with no returns or adjustments. Real agreements may treat formats or titles differently. Ask whether an advance for one book can be recovered from another book's earnings, what happens if the project ends early and whether any circumstances require repayment. Many publishing arrangements include no advance at all. Its absence does not, on its own, tell you whether the arrangement is fair, so compare the whole offer: the editorial and production work, the rights granted, the distribution plan, any payments by the author and the way sales are accounted for.

Paying to publish changes the calculation

If you are paying for editing, design or printing, do not assume that "royalties" work as they do when a publisher funds everything. You may own the printed stock and keep the proceeds of copies you sell, while paying a bookshop its share. The service provider may sell copies and owe you an agreed amount for each one. Some arrangements combine an upfront payment by the author with a continuing share of sales.

Write down each flow of money. Who pays the printer? Who owns the finished stock? Who sets the price and receives the buyer's payment? What reaches you after bookshop discounts, payment charges and delivery costs? Can you take copies to sell yourself, and on what terms?

If you pay to produce 200 books and then sell some directly at K150 each, the K150 you receive is revenue, not profit. Production and selling costs still have to be recovered, and calling the whole K150 a royalty would hide the investment you have already made. Our guide to pricing a book in Zambia works through that side of the calculation.

Ask to see a statement you can understand

A generous percentage is of little use without clear accounting. Before signing, ask what a typical royalty statement shows and how often you will receive one. Useful lines include opening stock, copies printed or reprinted, copies sold by format and channel, returns, the base and rate used, royalties earned, any advance still to be recovered, adjustments and the amount due.

Ask when payment follows the statement, whether there is a minimum amount before payment is made and how errors can be queried. If several bookshops sell the book, ask whether their sales are reported separately. Find out how late payments or returned stock appear in later statements. A statement that simply says "400 copies distributed, royalty due K3,600" cannot be checked. Were 400 copies sold, or merely delivered? What price or receipt was used? Were returns deducted? One more column can turn a mysterious total into an account you can verify.

At Sotrane, sales and royalty statements are made available through each author's account, and where the author's records and ours differ, the difference is reviewed and reconciled formally.

Different rights may need different calculations

A paperback, an eBook, an audiobook and a translation are not necessarily sold or licensed in the same way. A publisher might sell an eBook directly, license audio rights to another company or arrange a special bulk sale to an organisation, and the author's share of each may be defined differently. A print royalty clause does not automatically explain those other uses.

Ask which formats and territories the publisher is taking, who can approve a licence to a third party, how licence income is shared and how it will appear on your statement. Think carefully about granting rights that will not be actively used. Our contract checklist for authors explores the rights and obligations behind these figures in more detail.

Five questions to take into the conversation

• Is the royalty calculated on the cover price, the publisher's receipts, a fixed amount per copy or another clearly defined base?
• When does a copy count as sold, and how are unsold stock, returns, damaged copies and free copies treated?
• Do direct, bookshop, bulk, digital and licensed sales earn different rates?
• When will I receive statements and payments, and can I check the sales figures behind them?
• If I am contributing money to publication, who owns the stock and what do I receive from each kind of sale?

You do not need to be an accountant to ask these questions. Ask the publisher to walk you through one copy sold in a bookshop and one sold directly. If the figures cannot be explained in ordinary language before you sign, they will be harder to untangle after publication.

Which part of a royalty offer has been hardest for you to understand: the percentage, the deductions or the moment a sale actually counts?