Setting a selling price for self-published Kindle eBooks or KDP Print books (formerly CreateSpace) sold on Amazon begins with understanding your costs. There are two components to book and eBook costs when selling on Amazon using KDP (Kindle Direct Publishing):

1. The cost of sale: what Amazon charges the self-publisher for each unit sold.
2. The Amazon sales commission for selling your book.

This article looks in detail at the formats sold and supported using KDP: Kindle eBooks, and print-on-demand paperbacks produced using KDP Print. (Note that Amazon’s other book-selling platforms, Amazon Advantage and SellerCentral/Marketplace, have different cost structures. See the list of resources at the bottom of this post for more details.)

This guide is Part 1. Also see our guide for how to decide what to charge for your book in Part 2: How Much to Charge When Pricing a Self-Published Book to Sell on Amazon

Kindle eBooks

The KDP self-publishing portal is unique among all eBook selling platforms because it often charges a delivery fee to send books to buyers. This is in addition to the sales commission you pay Amazon for each sale.

Calculating Kindle eBook delivery costs

Amazon charges $0.15 per megabyte (MB)—the file size of your Kindle eBook—for each book sold priced between $2.99 and $9.99. There is a minimum charge of $0.01 and delivery fees vary by country. There is no delivery fee for books priced below $2.99 or above $9.99.

You can do a rough estimate by multiplying the delivery fee times your file’s size, but that will not be accurate. The most reliable and precise way to calculate the Kindle delivery fee is to upload your file to KDP’s pricing page and see what the tool says. (In KDP, after listing your eBook, the final screen is the pricing page.)

For example, our client’s novel, Trials and Trails is 95,000 words. The file size of the Mobi (Kindle) we uploaded is 3.421 MB, so if you were to multiply this by $0.15, the delivery cost is $0.51, right? Not so fast—Amazon’s official Kindle pricing calculator says the delivery cost is $0.10.

Note the “file size after conversion” is much smaller (0.64 MB) than the file we uploaded. This is because the Mobi files we mere mortals create contain a few versions of our book rolled into a single file. When you upload to KDP, the Amazon system separates these out for delivery to their various Kindle reading apps, and the final file size is smaller.

Also note “Other Marketplaces (12).” Clicking the down-arrow to the right, you’ll see the delivery cost for each country varies, depending on where Amazon is authorized to sell your eBook (you can opt-out of individual markets; this is something you decide). Visit this Amazon page for more details.

Avoiding the Kindle eBook file delivery cost

Except as noted below, the only way to get around this charge is to select the 35% royalty option. Clearly this is not a good choice for most people, but for books with a very large file size—cookbooks, art books, travel books with lots of images, for example—it may make sense. Use the KDP pricing calculator to be certain about what the fee will be.

Again, books priced below $2.99 and above $9.99 are not subject to the delivery fee.

Note: Early in 2018, Amazon announced Great on Kindle, a new 50% royalty option for “high-quality” nonfiction eBooks. The program has been in beta since April 2018 and remains invite-only and offered on a book-by-book basis. There are no delivery fees for books that qualify. The 50% royalty terms are explained here.

Sales commissions/your royalties

Unless you sell your eBook directly to readers (from your website, for example), you will pay Amazon a sales commission. As with any product and any store, the person buying your book is a customer of that store and the store is in business to make a profit.

Amazon’s sales commission is based on your royalty rate.

• 35% royalty: the Amazon sales commission is 65% for books priced below $2.99 and above $9.99
• 70% royalty: the Amazon sales commission is 30% for books priced between $2.99 and $9.99

Who pays taxes? You do.

Some 160+ countries around the world charge what is called a value added tax, or VAT, on purchases. Amazon passes these taxes on to you by reducing your royalty by the amount of the tax, regardless of the royalty rate.

• 35% royalty rate x (list price – applicable VAT) = royalty
• 70% royalty rate x (list price – applicable VAT – delivery costs) = royalty

Fortunately, the United States is one of the very few countries that does not have a VAT.

Not all eBooks are eligible for a 70% royalty

There are several rules and exceptions to getting the 70% royalty, so you might need to take these into consideration when deciding how to price your book.

1. Some territories/countries are excluded. However, sales in most of the English-speaking countries pay the higher royalty. You’ll find a list of those here.
2. Public domain eBooks are excluded.
3. eBook sales in Brazil, Japan, Mexico, and India pay 35% royalty unless your book joins KDP Select (KDP Select requires a 90-day exclusive).
4. You must agree to make your eBook lendable for a 14-day period. This allows your reader to lend your book once. More about eBook lending here.
5. If you also have a physical edition (e.g., a paperback), the list price of your eBook must be at least 20% below the price of this edition in order to qualify for the 70% royalty.

Make sure you understand Amazon's minimum and maximum pricing requirements by reading Part 2: How Much to Charge When Pricing a Self-Published Book to Sell on Amazon

What happens if Amazon offers your book for a lower price?

There are a few other rules about when you might receive less than you expect. This happens when you put your eBook on sale or another eBook retailer offers your book for a lower price and Amazon matches that price.

When you agree to sell your book on Amazon, you agree to not sell it at a lower price elsewhere. If you do, Amazon is authorized to match that price.

If this happens and your book's price falls below the minimum 70% list price requirement, you will receive the lower 35% royalty. Obviously, this is meant as a deterrent.

Finally, these rules and policies may apply to books sold via KDP and do not apply to all books sold on Amazon. Individual publishers and aggregators can have their own arrangements.

What is your royalty when you run a KDP Select Countdown Deal?

A key benefit of KDP Select is the ability to run a reduced-price sale for a one- to seven-day period. When this happens, you get to retain the 70% royalty if the sale price is lower than $2.99. Here's an example.

Let's say your Kindle eBook is listed for $4.99. In this case, you get 70% of $4.99 less delivery costs and any taxes. If you run a Countdown Deal to sell the book for $1.99, you receive the same 70% royalty (less delivery charges and taxes).

You can lower an eBook price at any time, but you won't get the 70% royalty if the price is below $2.99. A Countdown Deal is the only way to retain the higher royalty.

See the resources section below for more information about KDP Select and a link to our guide.

What if you are using an eBook aggregator?

You don’t have to use Amazon’s KDP to make your eBook available in the Kindle store. In fact, there are many services that can do this for you—for a price. Examples include Draft2Digital, Smashwords, Bookbaby, and IngramSpark.

You basically pay a flat fee or a percentage of royalties for the convenience of using a single company to list and manage your eBook in multiple stores. But since most eBooks are still sold (or borrowed) in the Kindle store, and not all services work the same way, it pays to study the options, costs, and tradeoffs carefully.

For a thorough report on eBook aggregators (distributors), see my eBook Distribution Round-Up, complete with FAQs and a comparison of nine services.

KDP Print paperback books

Paperback book pricing for KDP Print is a little more straightforward. The key number to figure out is the cost to manufacture your book. The primary factors that affect costs are these:

• The country where your book is sold
• The number of pages in your book
• Whether you are printing the interior in color or in black and white

Note that there are three factors that do not impact cost:

1. The dimensions of your book. It doesn't matter if it is 8.5″ x 11″ or 4.25″ x 6″, the manufacturing cost is the same.
2. Whether you choose cream paper or white paper. Only color printing matters.
3. The cover finish of your book. You can choose gloss or matte.

There are 3 ways to calculate your KDP Print printing costs:

1. Upload your files to KDP Print and their calculator will give you a cost.
2. Use Amazon’s pricing tables.
3. Download the KDP Print Excel spreadsheet print cost calculator.

See below for Amazon.com prices. The chart was pulled from this page where you’ll find prices for books sold in other countries. Trim size, bleed settings, and cover finish do not affect cost of printing.

Also on this same page you’ll find a download button for the KDP print cost calculator available as an Excel worksheet. (Click the subsection How we calculate printing cost.)

Calculating Amazon paperback-selling commission and your royalty

Now that you have the cost to manufacture your printed book, you can compute the sales commission. This is easy: your royalty is 60% of your list price minus printing costs.

• (list price x 60%) – printing costs = royalty

Returning to our client’s novel Trials and Trails, it looks like this:

• Manufacturing cost: (278 PDF pages x $0.012 per page) + $0.85 = $4.19
• Royalty calculation: ($14.95 x 60%) – $4.19 = $4.78

KDP Print minimum and maximum pricing

Of course, you can’t sell your paperback for less than it costs to print it, so Amazon calculates that number for you. The formula for this is:

Printing cost / 60% (royalty rate) = minimum list price. As you see above for Trials and Trails, that number is:

• $4.19 / 60% = $6.98.

The maximum price of your paperback must be no more than $250 (no math required!), 250EUR for the European marketplace, or 30,000 yen for Japan.

Selling your book on your website or in other stores

Always keep in mind that your price must not be higher in any other sales channel. For example, if you sell your book on your website it must be the same price you list it for on Amazon.

If Amazon discovers the lower price, they can match that price and your royalties will be reduced according to the same formula.

Other sales channels include Apple Books, the Barnes & Noble Nook store, Google Play, and Kobo Books, to name just a few.

Expanded distribution royalties are lower

Expanded distribution is when Amazon makes your book available to other online retailers via their relationship with Ingram, the parent company of IngramSpark. This is optional, but it can’t already be distributed by another company (typically, for self-publishers, this is going to be IngramSpark).

Trials and Trails, for example, is ineligible because we used IngramSpark to offer the book for pre-order. The book remains there for distribution to other online retailers.

Books that are eligible for expanded distribution receive a royalty of 40%. Ingram needs to be compensated for making your book available to their network of retailers (BN.com, for example). Again, this is for paperbacks, not eBooks.

The cost to buy author copies of your book

As an aside, the cost for you to buy copies of your own book is the printing price ($4.19 in this example). These are called “author copies” and you order them via your KDP account.

Click Paperback Actions to the right of your book in your KDP account.

What if Amazon is selling my book for less than my list price?

This might be the most common pricing question we get from new self-publishing authors. The answer is your royalty does not change, subject to Amazon’s terms and conditions here on their eBook Digital Pricing Page or here on their Print Pricing Page.

Much of the time, Amazon is simply trying to meet or beat a competitor’s price. Below is an example of a deeply discounted paperback, Off the Couch.

Amazon decided to sell the book at a loss: I can confirm the author did get her $4.86 royalty, even though the selling price was $4.52. The price has since been increased to $10.76.

Resources and links to related topics

Here are several more resources related to this topic.

7 articles on AuthorImprints.com that relate to book/eBook pricing

1. Part 2: How Much to Charge When Pricing a Self-Published Book to Sell on Amazon
2. Should You Use Amazon KDP Select or Distribute Your Book Wide?
3. Manage Your Published eBook Using Apple iTunes Connect-Sales, Payments, Promotions, Price and Metadata
4. eBook Pricing: No Special Formula to Determine the Right Selling Price for Your eBook (So Keep These 7 Points in Mind)
5. KDP Select for Self-Published Authors: Does the Kindle Owners’ Lending Library Make Sense?
6. What to Consider When Selling eBooks on Your Website: Pros, Cons and Tools
7. Amazon Advantage vs Amazon Marketplace—An FAQ

1 related article on DavidWogahn.com

• eBook Distribution Round-Up for 2019 with Comparison and FAQs

Amazon links

The information in this post is based on personal experience and the details found in combing these two sections on Amazon.

1. KINDLE. This is the single most important page to understand about how you are paid when Kindle eBooks are sold: Amazon Digital Pricing page.
2. KDP PRINT. This page goes into detail about costs and pricing for paperbacks. Printing Cost page. Also see their Print Pricing Page.

Photo by Severin Höin on Unsplash