Macmillian, perhaps believing it will face some tight margins as ebooks sales become as competitive as print products have become of late, has rewritten its author contracts, with boilerplate language stating that authors will receive 20% royalty fees on net ebook sales. Many major publishers, including Random House and Simon and Schuster offer authors 25% of net receipts.
A net receipts formula is differerent than a more standard 15% royalty of list price of a print product. Most e-book retailers take a discount of approximately 50% of an e-book’s list price. If S&S, for example, collects $5.00 from the retailer on a $10 book, the author will get 25% of that, or $1.25. a reduction of twenty-five cents per sale from the previous arrangement.
Sound a tad confusing? Take my word, it’s only going to get more confusing.