This article explains how our royalty processes work at UK Book Publishing.
As a publisher, we receive “publisher compensation” payments from our distributors such as Amazon and Lightning Source. These are the ‘gross’ or total royalties covering sales for all titles we have published. This is paid to UK Book Publishing after (net of) production costs and the percentage “commission” that each distributor takes from the retail price (with Amazon, this is 40%). Our distributors pay us in GBP (UK Pounds Sterling).
Distributors also provide us with the sales data for each title, including the publisher compensation per title, per marketplace, per month.
Quarterly, in arrears
Most publishers process, and pay out, royalties once per year. We feel this is not fair to authors. But we know why publishers do it – processing royalties can be very time-intensive (I’ll explain more about how we avoid this problem a little later).
Instead, we process royalties quarterly, in arrears. This means that, for example, sales in quarter 1 (Jan–March) are paid out at the beginning of quarter 3 (July of the same year). This delay allows us time to receive the publisher compensation payments from our distributors.
Because of this, in practice, for your first title with us, it could be up to six months until you receive your first royalties. From that point on, it will be every three months.
We use smart software called Royalties HQ to process book royalties. Royalties can get surprisingly complex, so this software automates most of the manual administration, and its in-built checks reduce the likelihood of errors. Basically, it makes sure everything’s calculated correctly and efficiently (with an audit trail). This is how we can reliably pay out royalties every three months, versus the industry-standard of 12 months.
The Royalties HQ software converts all sales data in the royalty period into GBP and calculates the amount owed to each author (also known as a “rights holder”) based on each rights holder’s percentage ownership.
As an author, you will receive two outputs every quarter:
- A royalty statement (a PDF we email to you, details the sales data)
- A royalty payment (money arriving in your bank account, assuming you’ve had sales in the relevant period)
Each of these is explained in more detail below.
Royalty statements detail the data – what you’ve sold and how much you’re owed.
You’ll receive four royalty statements per year (one per quarter), in January, April, July, and October. All our royalties are calculated in GBP (Pounds Sterling), so that’s the currency you’ll see on your statement.
Each statement includes a summary cover sheet, plus one page for each title that you have published with us. Each title includes a table showing a breakdown of sales and the royalties owed to you.
Most of our sales are through print-on-demand via our distribution partners. “Print on demand” means that a book is printed when an order is placed by the end customer (e.g. on Amazon).
However, the retail sales date and the wholesale order date do not necessarily match. Often, retailers like Amazon may order bulk copies for storage in their fulfilment centres, especially during periods of high sales, to enable next-day delivery for their customers.
The dates you see in your royalty statement are the wholesale date – the date the retailer placed the order with our distributor. In some instances, that can mean the stock is sold months after it was ordered, so royalty statement dates do not always match the date of retail sales.
Please remember that we don’t get to see the retail data. We are selling to distributors and retailers (e.g. Amazon) are selling to their end customers.
Soon after we email you your royalty statement, you will receive a single payment for all your combined royalties during that royalty period.
By default, we pay out royalties in GBP (Pounds Sterling). Payments to UK bank accounts are typically made within 3 business days of us sending you your royalty statement.
Payments to non-UK (international) bank accounts are sent via Wise. These payments take a little longer, and any payment processing fees will be deducted from the amount you receive. It is essential that we have up-to-date bank information.
Please note that the PDF royalty statement will be sent to you via email, so it is important to let us know if your email address changes. It is important to provide accurate bank information to us.
If you have any further questions about how we process royalties, please contact us and we will be happy to assist.