You want to find a publisher that pays a royalty based on a fixed percent of the gross sales price less the printing cost. Period. If your book sells for $15 through POD Publisher Xís web site and the cost of printing the book is $6, you should make $4.50 on each book sale if youíve negotiated a 50% royalty.
Some publishers deduct the credit card processing charge incurred for each transaction (1.5%-2.9% average). I'm okay with this because you still know what you're being paid and why.
The publishers who pay based on a net price (other than taking the gross sales price and backing out the cost of production and credit card processing fees) can be problematic. These guys often define "net price" however it best suits them. A "net sales price" royalty that subtracts the production cost of the book and then bases the royalty percent on that amount is acceptable only if the publishers tell you the cost to produce each book. Still, the problem with this approach is that youíll have to trust their numbers. But now that you know what the publisher pays to produce a book, donít trust anyone.
The only time including additional fees to the raw publishing cost is acceptable is when the publisher takes no royalty or handling fee for the sale of your book. DogEar Publishing and BookPros follow this rule: both slightly mark up the cost of the book in lieu of taking any royalties.
The subsection below discusses trade discounts given to third party retailers like Amazon.com as an incentive for them to sell your book. Some of the publishers covered in this book have the gall to give their own online store a trade discount! Donít worry, I tell you about the ones that doóin my book they're scum. A trade discount is usually 40% to 55% off the retail price. Let's say Publisher XYZ offers its authors 50% royalties based on the gross sales after production cost and the trade discount to all booksellers including its own online store. If the retail price of the book is $15, and the production costs are $5 per book, then the next $5 goes into Publisher XYZ's pocket as the "trade discount" for carrying the book that you've paid them to publish. That leaves $5 to be split equally between you and Publisher XYZ. Publisher XYZ walks away with another $2.50 (for a total profit of $7.50 plus whatever it made off the printing fees) while you make $2.50. See how shady this is?
Finally, stay away from any publisher that arrives at the "net sales price" by deducting vague items such as "administrative costs" and "marketing costs."
Read IN's interview with Mark Levine in ON THE COVER.