It can be tough to choose how to distribute your books and, to make it even more complicated, you can use combinations of services to maximize your marketing and profits. Lots of self-publishers sell their book directly to Amazon using Amazon KDP Print and distribute everywhere else with IngramSpark because they think that they make more money on Amazon by doing that. A quick test showed me that isn't true.
HOW TO CALCULATE ROYALTY
There is a formula for calculating royalty, and here it is:
List Price - Discount - Print Cost = Publisher Compensation / Royalty
I used IngramSpark's Publisher Compensation Calculator to determine the cost of a 6x9, 280-page paperback book: $5.93 profit. When I plugged these same numbers into Amazon's Book Royalty Calculator, I got $4.78, which is $1.15 less royalty than IngramSpark.
Let's take a look.
INGRAMSPARK ROYALTY CALCULATOR
Here's what IngramSpark's publisher compensation calculator looks like and the results for my 6x9, 280-page paperback book.
I'm applying the 30% discount (to distribute to online retailers) because I want to see how much it will cost to distribute to Amazon in particular. (But this also applies to B&N, iBooks, Kobo, GooglePlay, and other online retailers.)
If I was marketing to bookstores I would need to set the discount to 53% and enable book returns.
(List Price - 30% IngramSpark Discount - Print Cost = Publisher Compensation)
$14.99 - $4.50 (30%) - $4.56 = $5.93
AMAZON'S ROYALTY CALCULATOR
As you see in the table below, Amazon takes 40% of the list price. (They may discount your book, selling it for below that price, but you will always get the 40% of list price.)
So, based on the 40% of list price, here are the results for the same 6x9, 280-page paperback book.
(List Price - 40% Amazon Discount - Print Cost = Publisher Compensation)
$14.99 - $6 (40%) - $4.21 = $4.78
Instead of doing the backwards math to find the print cost, which is not provided in the Print Options calculator, above, you can use their Member Order Calculator.
Don't forget to file a resale certificate so when you purchase your own books you don't pay sales tax twice - once when you purchase your books and once when you resell them. Find out how in my post on BookWorks.
Again, here's the formula.
- List price is $14.99, which is the same on both platforms, minus
- Discount, which is 30% for IngramSpark and 40% for Amazon, minus
- Print cost, which is $4.56 for IngramSpark and $4.21 for Amazon
Use Amazon KDP Print to supply books directly to Amazon instead of IngramSpark
The disadvantage of using IngramSpark to distribute to Amazon is that if your book isn't just flying off the (virtual) shelves Amazon might mark your book as Temporarily Out of Stock or Ships in n Days status. So, understandably, you may want to use Amazon KDP Print to keep your print book in stock in Amazon so you don't lose customers (who want instant gratification) in the highest-volume bookstore on the planet.
Argument for using IngramSpark to supply books to Amazon
As we've seen in this post, the advantages of using IngramSpark to distribute to Amazon is financial. Who doesn't want to make more money on each book? If your book is a consistent seller you'll probably won't be listed as out of stock. In addition, IngramSpark offers:
WHICH WILL YOU CHOOSE?
I welcome your thoughts and questions on this topic.
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