Their new royalty structure goes into effect on June 30. According to Internet Retailer, this new structure:
will pay authors a commission of 70% of a book’s list price, minus the net delivery cost. Amazon says authors typically get a 25% commission today on e-books from major publishers. Delivery costs will be based on file size and priced at 15 cents per megabyte...According to Amazon:
“On an $8.99 book an author could make $3.15 on the standard option and $6.25 with the new 70% option.” The new royalty schedule is double Amazon’s current royalty rate of 35%...There are a few stipulations.
To qualify for the 70% royalty, an author must price an e-book between $2.99 and $9.99 and the list price must be at least 20% below the lowest list price for a paper copy of the book. The title must also be available for sale in all geographic areas where the author or publisher has rights, Amazon says.Amazon hopes the move will mean they capture a bigger share of the market. This move isn’t altruistic, but it does mean more profit for authors. From a writer’s POV, that’s a good thing.