Royalty on "Retail" or "Net" - Writers Forum

ronndonn · 11-02-2005, 12:33 PM

Scanning the 'Writers Guide,' I noticed that some publishers pay royalty on retail sales, and some pay royalty on net sales. Could someone explain to me how different these two methods of payment are. I am thinking there may be a huge difference. Paying a percentage of retail could be as much as twice as much as paying on net... but then, this is just my guess.

What would be your estimate or your comment. I just want a rough idea.

SeattleGhostWriter · 11-02-2005, 01:57 PM

I believe that this is some publishers pay on the book price + Tax, and on net pays on the actual book price. I could be wrong.

mammamaia · 11-03-2005, 09:00 AM

no, it has nothing to do with tax...

'retail' is the price the store sets for the book [not including tax, which varies from place to place], as opposed to what they paid the publisher for it [= 'wholesale']...

'net' is the total amount the publisher makes from selling your book, minus the cost to them, of publishing it...

but, it's still not that simple... see this very good rundown on royalties, for the devil in the details:
http://www.ivanhoffman.com/royalties.html

ronndonn · 11-03-2005, 10:36 AM

Thanks,

I checked out the site and like you said, the devil is in the details. That's a great internet site... it's a great rundown on royalties.

ronndonn · 11-06-2005, 09:28 AM

The term 'net' usually means retail sales less books that are returned. So in fact there may not be a huge difference between the term royalty on retail and royalty on net sales. Royalty on wholsale would be the exception. That would be quite a different figure than retail and net.

This comes from my latest research on the subject. Please let me know if you find something different.

My apologies for coming in to answer my own question. Maybe I should have done the deeper research before I asked the question. Oh well, this little discussion might be a help to someone else.

Thanks for the kind responses.

mammamaia · 11-06-2005, 10:06 AM

the interpretation of the terms still differs from publisher to publisher, so you really need to check each individual firm's guidelines, to be sure of what they mean by them...