I know exactly how you feel about having a delay in getting your book royalties. Well, let me share with you what you need to know when it comes to book royalties in self-publishing to avoid frustrations.
Today's article has three points and you're going to want to stick around for the third point. It is a secret as to the one thing you can do that will save you a lot of pain when it comes to royalties.
So let's get into it. In today's topic, we're going to be hitting book royalties in self-publishing. Now, this is not necessarily for an absolute beginner. If you're a beginner, then you don't need to know too much about this.
But once you've got your very first book out there, you'll know exactly what I'm talking about. It is that you put your book on Amazon, maybe on KDP or maybe you've got the KDP print version out there. And you start to see that your book is making money.
So you see the royalties, you see how many sales are coming in and then there's a delay in time on these royalties. That can be a little frustrating for a lot of people but eventually, these royalties will come in a couple of months, sometimes 3 months.
It depends upon which network you're in but you'll see those royalties coming in like on Ingram Spark, it's 3 months later. When they come in, it starts coming in with all of these documents that are hitting you. You start to feel a little bit of stress because "how am I supposed to do the taxes on these things?".
"What is the tax rate?" "How do I file these things?" And then the companies themselves start to send you all the tax forms and it can be very confusing how to deal with all of this. There's a whole series of questions that we have around this issue of royalties in self-publishing.
That is what I want to explore in today's article. Grab a copy of my free Self-Publishing Checklist. If you haven't already grabbed it I don't know why, what are you waiting for? It's free!
It's going to make sure that you're not skipping any of the steps necessary to win at the self-publishing game. On my own story, when I first got started I was feeling the amazing feeling of seeing my book make the very first sale.
You get that sale, you see that little spike in your KDP dashboard and you say "wow my book is being bought by people". Now at one level, I see 2 types of authors. You have the one type who's like "my book will make a killing, I'm going to be selling a thousand books a day".
I had somebody on my channel even ask me, now I'm not making fun of you okay. Just so you know but they asked the exact question which was "look when I put my book on the market how am I going to handle all of the people trying to get in touch with me?".
"Is there a way to handle this huge amount of traffic? Because after all the book is so amazing that clearly, I'm going to have a thousand people a day sending emails to my inbox. Asking me questions and maybe wanting to do interviews and trying to figure out how they can buy hundreds and hundreds of books".
You know, overloading the supply chains for your very first book. My question is what audience do you have right now? I mean do you have a social media following?
Because there are millions of people that are following you on Instagram, Facebook, and Snapchat. They're going to want to buy your book and the person commented that nobody had actually, they don't have a following. But the quality of the book was so good that they would be making so many sales right from the beginning.
Now I want you to think about this for a second, it may come as a surprise to many of you authors out there. But when you put your book on the market and if you do not have an audience, you won't have traffic to the sales page. And even if you do, did you already learn how to optimize the sales page?
The marketing on that, its own separate field. So a funnel is a way to think of it, the first is we need the traffic to come in. Then we need to have a good sales page and our cover so that when people do click and go and look at our sales page, they wish to buy our book.
And then there's going to be another percentage of the people who actually even see the page. Now, if we don't have any content marketing or anything like that, we're not even going to get those people to come down that funnel. To make the purchase and give our book a chance.
Notice the thing I commented here which is that no matter how good your book is, unless people know, like, and trust you, they're not going to buy your book. So if you're not good on the marketing side, you're not going to end up selling your book. So I know that's a tough one.
But let's get back to the main topic here which is royalties. So that's on the one side, the other side is people who don't think their book is going to sell at all, you have Imposter Syndrome. After all who wants to read your stuff?
You know you just have some ideas out there. And the answer is a lot of people do. But we have to market to them correctly and when we do, we start to see those royalties coming in. Both of these groups are set to start seeing royalties.
And when they come in, you see those little spikes and it is so exciting. I know I was very excited but then comes the wait. This is something that is a very common question which is "how long do I have to wait until I get this money?".
The answer is sometimes it can be as long as 3 months. I don't think any of the companies make you wait more than 3 months. Some of them pay you as quickly as monthly but there's always a delay because they want to give them a chance to return your book.
If they do, well then you aren't going to get paid. They make sure that that doesn't happen but after that period has elapsed, then the royalties will come through. You'll get that money into your bank account or wherever you've directed them to post it.
But what about the taxes? As these receipts start coming in, this is the biggest thing because where are the receipts coming from? They're coming from different countries, this is something I don't like with Amazon, they send it out to different countries.
Special Rules To Get Paid
In addition, you have your eBooks and you have your paperback sales. There are special rules upon how long before you get paid on those. And then Lulu makes you wait several months as well as Smashwords and Ingram Spark.
It's like a three-month wait or 90 days before you get paid from Ingram Spark based on any sales that you have. And then ACX also an Audible makes you wait. So what happens is you get receipts from all of these different locations.
You're suddenly getting buried in all of this stuff. So you have all of this from royalties, at one level it's great. But on another level like on Smashwords I remember you get a payment of 50 cents and you're like, can you people wait until I get at least 10 or 20 or something?
Because the time it takes to process even one receipt is a bit of time and that's one reason why we want to get multiple books out. So that we're not processing $1 at a time. We're processing a thousand dollars coming through one of these channels to you so it's worth your time.
But the thing is you should be staying on top of the paperwork and that was what I found. I was just using Excel or Google Sheets. Now I'm also a database developer, so of course, I'm going to be using SQL server and access more advanced tools to do this as well.
But for the rest of you all, I would suggest just going with Excel or Google Sheets. To make sure that as they come in, you're marking them down. We only need to keep track of actual money that's coming into the bank accounts.
We don't care so much about the money, they say it's going to come in the future which I find a little bit odd. Ingram Spark I'm talking to you, you send us all of these PDFs of documents for which you say, okay here's how much money. But then you're not paying it for another 90 days then you send additional things.
And so this is just a heads up for all of you when you're getting started with Ingram Spark. Which is for me the most profitable of all of these companies at the moment. When you go through them, they send you a thing when you first make the sales every month.
Then they send you the one to say okay finally we're sending you the money for those royalties. So we do not need to file anything for the earlier ones but wait till you are getting money into your bank account. And then those need to be filed in your system.
So that when it time comes for accounting purposes and taxes, we have a record of every single line. And also just another little tip for you all, do not blend your personal bank accounts with your business bank accounts. I don't care if you have an LLC or if you're like I forgot in Norway they have a special name for it.
If you're doing it alone where you're just like a solopreneur. But I can't remember, let me know if you can remember the name of it. If it's a single person doing it where you're not an LLC, like an actual corporation.
It could also be an S-corp of course but there's a name for it. But anyway, the point being is that when you finally do get this out into the world or whatever, you don't want to mix your bank accounts together. So that's a very important point, I'm saving you a lot of the hassles that come with the IRS or your whatever the equivalent in Norway.
Scottish may come after you and say why are you not filing your taxes on these royalties that you're receiving? This will save you a whole lot of time. These are some of the things, I did not make the mistake of not filing this stuff because I don't want to take any chances.
I need to make sure the governments do get paid their taxes and that everything is 100% in alignment. Because why would I do all of this work in order just to get in trouble with the tax authorities in the government? So we make sure everything is completely legal, everything is reported down to the penny or kroner in Norway.
So book royalties in self-publishing? Let's get to the three points for today. Our first point is if you can, you should reinvest all of it. So the money that's coming in from your royalties, do not take that money out and go "I'm rich I made a dollar, no".
See if we can take the same money that's coming through your royalties and reinvest it back in. Now you might be asking what are we reinvesting in? The answer is very easy, better covers and the other two and these are the big ones that I'm telling you you should be doing if you aren't already.
The first one is courses and in my case, I tell you how to do formatting. I have a Course specifically about how to do Content Marketing. Do not waste your money and your time trying to figure out everything yourself.
Investing in courses is the single biggest mistake that I made which was not investing in them early enough. I should have immediately started by investing in courses. They rocketed my books forward once I started taking courses on the things showing me how to exactly do this stuff.
So it was a huge breakthrough. The second thing it's coaching, do not try to go this alone. I also offer Coaching, the reason I'm telling you this is I take my own medicine.
I also pay for coaching and it is a huge investment that is worth it but I don't just invest in anyone. Listen to different people and if you connect and you resonate with somebody who's telling you things that are helping you, then invest in it.
Go only as long as you need to go. In my case, the things that I offer I give a 30-day money-back guarantee. So if there's any dissatisfaction, there's no risk at all, it's a complete risk reversal here so that's just a heads up.
Build A Leveraging System
I am indeed promoting myself but at the same time, I do the exact same thing. I invest in courses all the time and I invest in coaches as well. So if you aren't doing this, please go ahead and do it.
Buy the course, buy the coaching if you feel the need for it. I'm telling you, you definitely need it. So that's just a little plug, I'm not saying you have to buy my courses or my coaching but find somebody you resonate with.
If you resonate with the people and you trust the people, then this is worth taking the investment. Take those royalties you have and reinvest them. The other thing we're going to reinvest in is some of the basic tools which you will see below in the description of all of my Youtube videos.
As well as my affiliate links for the tools that I use to make a killing with the self-publishing side of things. The other things we can invest in are our covers and the quality of the editing and the manuscripts, all of these sorts of things. These are the things that I'm telling you that is worth investing in.
You might be thinking "oh let's do this cheap". And I'm saying you can do that but your royalties will also return like that. Just like a seed that we plant in the ground, it seems like a waste. We can't eat the seed but instead, we plant it in the ground which seems like throwing it away.
Only to grow more plants, to give us even more seeds and we build this leveraging system. Now, this is a no-get-rich-quick scheme, this is a long-term game. It involves putting out lots of books, it involves learning as we go.
So if you were not in it for the long term, if you're thinking I'm going to jump in this thing put a book out, and then make a killing, then you might as well just stop reading my articles and watching my videos immediately.
Because I'm telling you a process/system that is easy to follow that when we go through these steps, we're going to start seeing these royalties coming in. We're going to increase over time, we're going to reinvest the money that we have. We're going to get better with each of these steps.
And our books are going to increase in quality, we're going to see those sales and the royalties will continue to go up. If that sounds tempting to you, then I'm telling you to reinvest your money. If it isn't tempting to you, well then put your book on the market.
It will flop and it'll just be flatlined as most authors see on Amazon and then you can move on to a different hobby. So I just wanted to make that clear because I have some people who contact me who have this idea that you're going to jump into self-publishing and just make a killing after a few months.
That is not what's going to happen for you here. I mean somebody has to be honest with you. I know a lot of other people on other channels tell you things that are complete lies. The fake gurus of self-publishing will tell you that.
But I'm going to just cut right down to it and tell you that's not going to happen for you. You are not going to make a killing on your first book. You're going to put it out there and with time we're going to learn the necessary skills.
So stick with me, it's a journey we're going to go together and we'll go from there. That's the first thing, the second thing is to remember to file your taxes. I know I mentioned this in my own story but do not try to steal money from the government, whatever country you might be.
Because that's what you're functionally doing, you're stealing money that the government needs to go. We don't complain, we don't whine about it. Look, this is an amazing opportunity with this self-publishing business area.
So take advantage of it and make sure that you're filing your taxes. We do everything legally so make sure you're documenting the money that comes in. We have the receipts and we have the documentation of how much money is coming in and then we're going to do that with our accountant.
That's the other thing with reinvesting. Once you're earning a thousand dollars a month or more, it's time to hire an accountant. There's no reason not to have an accountant at that point to make sure that everything we're doing is properly filed.
It will save us money in the long run when it comes to the police. The accountants can also give us financial advice on how exactly we should best be using this money as well. Our third and secret answer of the day is for eBooks to use a site that will save you an awful lot of time like Smashwords or Draft2Digital.
Because instead of trying to put your eBooks all over these thousands of sites out there, we can simply put it through these aggregate sites. They will then sell the books on all those other sites and send you the money. It'll just aggregate it together and then send you the money there.
So you do not have to deal with hundreds and hundreds of receipts when it comes to filing all of this stuff from the royalties that you're making. Instead, just one site Smashwords or Draft2Digital for your eBooks. So we're trying to keep this as simple as possible.
We get a receipt, we register in Excel right away, and then we have a copy of that receipt. So we have proof if there's ever an audit with regards to what we're doing. We're 100 above board, the government's happy with us we're paying our taxes.
The accountants are making sure that we're doing things and filing things on a correct basis. Because I remember in the early days I was stressing because I was making a few dollars here a few dollars there. And I'm like I have no idea how to file this correctly.
I know it probably wasn't even filed correctly in the very beginning. But once I hired an accountant, then I understood that yes I'm getting this exactly right. Now granted it costs money to hire an accountant to do that, you know I went for people with larger agencies that were built to do this sort of thing at a cheap rate and then we go from there.
So my final question for you is what challenges with book royalties in self-publishing have you faced? Go and let me know below in the comments. Check out my other articles and videos for more answers to your self-publishing questions.