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 CreateSpace and distribute elsewhere 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 6×9, 280-page paperback book: $5.44 profit. When I plugged these same numbers into CreateSpace’s Book Royalty Calculator, I got $4.78, which is 66 cents less.
Let’s take a look.
IngramSpark royalty calculator
Here’s what IngramSpark’s publisher compensation calculator looks like and the results for my 6×9, 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 applies to B&N, iBooks, Kobo, GooglePlay, and other online retailers.) If I was marketing to bookstores I’d have to set the discount to 53% and enable book returns.
(List Price – 30% IngramSpark Discount – Print Cost = Publisher Compensation)
$14.99 – $4.50 (30%) – $5.05 = $5.44
CreateSpace royalty calculator
As you see from 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.)
A little more about the table: Don’t use Expanded Distribution–40% discount doesn’t work for bookstores, who require 53% and a returns program, and you only need to give the online retailers 30%. The CreateSpace store might look attractive to you, since you get 80% of list price, but nobody really shops there. You’re better off selling on your own website with an ecommerce widget from a service like Gumroad.
So, based on the 40% of list price, here are the results for the same 6×9, 280-page paperback book.
(List Price – 40% CreateSpace Discount – Print Cost = Publisher Compensation)
$14.99 – $6 (40%) – $4.21 = $4.78
CreateSpace’s calculator does not specify the print cost, but you can do backwards math or go to their Member Order calculator to find it.
Instead of doing the backwards math to find the print cost, which is not provided in the Print Options calculator, above, you can use the Member Order Calculator.
Of course, I want to make $5.44 per book instead of $4.78 and, if my book is a hot seller, Amazon is unlikely to list it as out of stock. But if it languishes, it may make sense to move it to CreateSpace to keep it in stock and take advantage of their large customer base.
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 CreateSpace, minus
- Print cost, which is $5.05 for IngramSpark and $4.21 for CreateSpace
CreateSpace requires a higher discount (or commission) for sales to the Amazon store and a lower print cost. IngramSpark offers a lower discount and is more expensive to print, and comes out 66 cents ahead.
How to make the most money in the Amazon store
This post is about making the most money in the Amazon store and my findings point to IngramSpark (66 cents more per book!) and against using CreateSpace for maximizing profits on per-book sales.
Authors can use IngramSpark to distribute paperbacks to Amazon (which this post is all about), but also all the rest of the online retailers, including Barnes & Noble and IndieReader. But if I want bricks-and-mortar sales I would need to set the discount to 53% and enable book returns. CreateSpace’s Expanded Distribution offers 40%. No good for bookstores!
Why use CreateSpace to distribute to Amazon?
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 CreateSpace to reach Amazon in order to keep your book active in the highest-volume bookstore on the planet.
Why use IngramSpark to distribute 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 profit from selling their products? But IngramSpark also offers these benefits.
- Enables pre-orders on Amazon (CreateSpace, strangely, does not)
- Higher print quality
- Option to turn on 53% discount and returns program if you want to sell to bookstores
Which will you choose?
I welcome your thoughts and questions on this topic. Want more vendor comparisons and self-publishing tips? Sign up for my email news and get my Consumer’s Guide to Self-Publishing Tools and Services and weekly updates direct to your inbox.