The lessons in this module provide detailed information about the royalty contract’s royalty rules tab.
Royalty rules specify how royalties are to be calculated for each sales transaction.
- Royalties for eBook sales is 25% of the net revenue received.
- Royalties for Hardcover sales is 10% of the retail price.
- Royalties for Hardcover sales outside the United States is 5% of sales revenue.
- Royalties for Paperback sales escalate based on the quantity sold; 10% of sales for the first 5,000 copies sold, 12.5% of sales for the 5,001 through the 10,000th copy sold and 15% of sales when quantities exceed 10,000 copies.
The royalty rules process is:
- Add Royalty rules
- Specify the order; from top to bottom, of the royalty rules
- Select the rule’s details button to specify the applies to criteria the rule
- Select the rule’s details button to specify the royalty calculations for the rule
A royalty contract can have one or many royalty rules.
To add or remove a royalty rule select the Add/remove/order author rights… button. After a rule is added you need to 1) define its sequence in the list of royalty rules, 2) specify the applies to criteria for the rule and 3) specify the royalty calculations used by the rule.
Royalty Rules Sequence
Royalty rules are valuated in sequence, from top to bottom. For each activity (sales record), the first rule to match is used for the royalty calculation. Subsequent rules are ignored.
To change the order of royalty rules select the Add/remove/order author rights… button.
Each royalty rule has applies to criteria that is specific to that rule. If a rule’s criteria matches a sales record that rule is applied to the sales record. If the sales criteria does not match, then the rule is skipped and the software looks for a match with the next criteria.
The image below is for a rule that applies only to sales of products with a format: eBook.
The royalties tab specifies how royalties are calculated.
Documents > Author Contract Summary
From the Documents button; printer icon, you can print a summary of the royalty contract rules.