Self-publishing Costs: One-time Payment or Percentage of Royalties?

As an indie author I wear two hats: writer and publisher. These two job roles involve complementary but markedly different responsibilities and mindsets.

A writer's job is to produce the best writing possible so that readers will be pleased.

A publisher's job is to get the author's writing into readers' hands in the most profitable manner possible so the writer can keep writing and the readers can keep being pleased.

I've been hearing certain publishing questions repeated by readers and fellow authors recently, so now seems like a good time and place to address these queries.

Should indie authors pay fixed, one-time fees for professional services or give collaborators a share of my royalties?
The main costs associated with bringing a book to market are cover art, editing, formatting, distribution, and, if you're doing audiobooks (which aren't really books, but that's a subject for another time), fees for a narrator and studio time.

Here is a vital lesson that many indie authors--especially those who are used to the Big 5 publishers' obsolete business model--have trouble wrapping their heads around.

Never give anyone a percentage of the royalties for one-time work on a self-published project.

The only exception to this rule is a retail/distribution partner like Amazon. The reason it's a valid exception is because, when you upload your book to KDP, B&N, etc., you are entering into a partnership that grants you ongoing access to their sales channel. Percentages are for partners, which is why you should never give a percentage of indie book royalties to:
  • Artists and illustrators
  • Editors
  • Agents
  • Formatting services
  • Narrators
  • Recording studios
  • Publicists
  • Ad agencies
Now, you might object, "But splitting my royalties 50/50 with somebody on that list still leaves me with a way bigger piece of the pie than the pittance afforded to authors by the Big Five."

I answer: Yes, that's one of the many reasons why the Big 5 are evil. And dying. As for why giving up a slice of your royalties for one-time work is a bad idea, consider the following analogy.

You want to add an extra bathroom to your house. You don't have the time or expertise to do it yourself, so you hire a plumber to install the tub, toilet, and sink for you.

When the time comes to settle the bill, do you:
  1. Pay the plumber a fixed, one-time fee based on parts, labor, and hours worked?
  2. Give the plumber part ownership of your house?
It's not so hard to see why I say that percentages are only for partners now, is it? (H/t Dean Wesley Smith.)

Short vs. long time preference
Another objection: "But giving up a share of my royalties means I don't have to pay for [one-time service X] up front. This way I get my book out there, and even though I'm earning less than if I kept all the royalties myself, at least I'm earning something."

I answer: You're thinking like an author; not a publisher. Do not, to the best of your ability, make business decisions in author mode.

The key here is short vs. long-term time preference. Yes, if you give up a share of your royalties now, your book will be released sooner, and you'll start making money sooner. You'll also be making less--in the case of ACX's royalty sharing deals, only half as much--forever.

Digital is forever. Giving up royalties now will affect you, your children, their children, etc. The chief principle in this calculus is ownership. You wrote this book, so you own it. Part with ownership of your work at your own peril.

By the way, I practice what I preach. These books' royalties don't go to nobody but me and Amazon.

P.S. thanks to my awesome readers, those royalties will be sufficient to pay all of my February bills ;)


  1. P.S. thanks to my awesome readers, those royalties will be sufficient to pay all of my February bills ;)

    So have you made the move to Telluride, CO yet, or are you still in Sedona, AZ?

  2. According to my chart, I'm still in Sedona. But because I live really cheap, I qualify for the J-List on Larry's chart.