Comparing IngramSpark and Amazon KDP Print Royalty
It can be tough to choose how to distribute your print books and, to make it even more complicated, you can use combinations of services to maximize your marketing and profits. Lots of authors sell their print book directly to readers who shop in the Amazon store using Amazon KDP Print. They distribute everywhere else with IngramSpark because they think that they make more money on Amazon by doing that. But IngramSpark allows you to set a 30% discount whereas Amazon's discount is set at 40%. So you earn 70% royalty with IngramSpark but only 60% royalty with Amazon. There are other reasons to go direct to Amazon (such as your book always being in stock), but royalty rate isn't it. Here's the math.
HOW TO CALCULATE ROYALTY
There is a formula for calculating royalty, and here it is:
List Price - Discount - Print Cost = Publisher Compensation / Royalty
Use IngramSpark's Publisher Compensation Calculator to determine the cost of your book. I compared a 6x9, 280-page paperback priced at $14.95 on both platforms.
It's important to note a difference in discounting. IngramSpark offers 30%-55% discounting, but Amazon offers only a 40% discount. Amazon is not a distributor -- well, they are, but you shouldn't use their distributor -- you'll use them to get your book into the Amazon store.
On IngramSpark with a 30% discount you'd make $5.80 profit. With Amazon at their 40% discount your profit would be $4.79.
If you want to compare apples to apples, with IngramSpark at a 40% discount you'd make less than Amazon at $4.30 per book. But there's no reason to set a 40% discount.
Here's how you can do the math for your book.
INGRAMSPARK ROYALTY CALCULATOR
Here's what IngramSpark's publisher compensation calculator looks like and the results for my 6x9, 280-page paperback book.
Apply the 30% discount required to distribute to the online retailers. If you want to market to bookstores you'll need to set the discount to 53% and enable book returns, but I remember that 99% of your print book sales will happen online. Here's the math:
(List Price - 30% IngramSpark Discount - Print Cost = Publisher Compensation)
$14.99 - $4.50 (30%) - $4.67 = $5.80
AMAZON'S ROYALTY CALCULATOR
Amazon takes 40% of the list price. They may discount your book, selling it for below that price, but you will always be paid 60% 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 = $4.79
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 to do this in my post on BookWorks. This is just one of the tasks you need to do when setting up an author-publisher business. Learn how to set up in my online course, Set Up Your Publishing Business.
Final Compensation Comparison
Here's the final price comparison.
- 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 $4.67 for IngramSpark and $4.21 for Amazon
- Compensation, which is $5.82 for IngramSpark and $4.79 for Amazon
Why use Amazon KDP Print?
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 if you don't use Amazon KDP. So, understandably, you may want to use them so you don't lose customers (who want instant gratification) in the highest-volume bookstore on the planet.
Why use IngramSpark to get 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. Distributing using IngramSpark offers other perks, too:
The other services
It's difficult to directly compare other services as they don't provide calculators. But here's the best I could come up with for the same 6x9 paperback priced at $14.99.
Lulu - Create a Book - $6.85 print (mfg) price minus a 20% distribution fee.
BookBaby - Help Page - simply states you get 10-30% royalties - there is no way to calculate royalties until you create an account. On their BookShop store page they give an example for a $9.99 book ($1.39) and a $19.99 book ($2.07).
What Distribution Model Will You Choose?
There are may other distribution options but for print I think the Amazon + IngramSpark combination is the best. What about you? I welcome your thoughts and questions on this topic.
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