DELIVERY FEE MATH

If you price your Kindle e-book between $2.99 and $9.99, you’re eligible for the 70% royalty option.

However, Amazon charges a delivery fee of 15 cents per megabyte (Mb) for US sales. (It’s £0.10 per Mb for UK sales. I will focus on US sales in this article.)

The delivery fee is subtracted from the list price before multiplying by 70%.

Example: List price = $2.99, file size = 6 Mb

Delivery fee = $0.15 × 6 = $0.90

Royalty = ($2.99 – $0.90) × 0.70 = $2.09 × 0.70 = $1.46

The only file size that matters is the converted .mobi file size that you see on page 2 of the publishing process at Kindle Direct Publishing (KDP). The size of the file that you upload isn’t the number to go by.

The delivery fee is most significant for books that include many pictures.

IS IT WORTH TRYING TO REDUCE THE FILE SIZE?

If you’re planning to set the list price of your Kindle e-book between $2.99 and $9.99, you know that a smaller converted .mobi file size results in a smaller delivery fee.

So it’s intuitive to assume that reducing the file size will lead to a larger royalty.

I had some fun with the math the other day, working through several examples. I observed that in many cases, reducing the file size wouldn’t have a significant impact on the royalty unless the file size was substantially reduced. But there are cases where a change in file size has a greater impact on the royalty.

One factor is that for a very large file size, the 35% royalty rate actually pays a higher royalty. The delivery fee only applies when you select the 70% royalty option.

It also depends on the list price that you set and the converted .mobi file size that you’re starting with (i.e. before you proceed to reduce the file size).

We’ll get to the math in a moment (and some handy tables that will do the math for you).

But there is one more point that you should consider: It may be better to delivery high quality pictures to the customer than to try to reduce the file size. (Besides that, Amazon KDP automatically compresses pictures in the file that you upload.)

So when we look at the math, remember that the quality of the pictures is important, too.

DELIVERY FEE MATH

Here is an example, illustrating whether or not it’s worth it to reduce the file size for a particular situation:

Example: List price = $2.99, file size = 12 Mb

Delivery fee = $0.15 × 12 = $1.80

70% Royalty = ($2.99 – $1.80) × 0.70 = $1.19 × 0.70 = $0.83

35% Royalty = $2.99 × 0.35 = $1.05

If you reduce the file size 30%, down to 8.4 Mb:

Delivery fee = $0.15 × 8.4 = $1.26

Royalty = ($2.99 – $1.26) × 0.70 = $1.73 × 0.70 = $1.21

You earn a whopping 16 cents more by reducing the file size 30%. (Ignore the $0.83 since the 35% royalty paid better at the original file size.)

However, if you reduce the file size 50%, down to 6 Mb:

Delivery fee = $0.15 × 6 = $0.90

Royalty = ($2.99 – $0.90) × 0.70 = $2.09 × 0.70 = $1.46

You earn 41 cents more by reducing the file size 50%. It takes a substantial change in file size to significantly improve the royalty in this example.

I had some fun with this and made several tables. The tables do the math for you.

KDP DELIVERY FEE TABLES

There are 8 tables below, one for each of the following price points: $2.99, $3.99, $4.99, $5.99, $6.99, $7.99, $8.99, and $9.99.

Each table shows you how much you would need to reduce your file size in order to see a significant improvement on your royalty.

Here is how to use the tables:

• Find the table with your list price. The list price appears near the top left corner of the table.
• Find your current converted .mobi file size in the left column. (You need to upload your file to KDP and continue onto page 2 of the publishing process to find out what your file size is. Don’t look at the size of your Word file or any other file on your computer.)
• The next column over (the 0% column) shows you what your current royalty is. (Check this on page 2 of the publishing process. It may be slightly different, since your exact file size might not be listed.)
• As you continue to the right, the row tells you what your royalty would be depending on what percentage you reduce your converted .mobi file size.
• The cells in green (and the figure at the top of the table, near the left) correspond to the 35% royalty option. For these cells, the 35% royalty rate pays higher than the 70% royalty option.

Here is an example:

Example: List price = $3.99, file size = 18 Mb

Find the table with the $3.99 list price near the top left.

Scroll down to 18 MB in the left column.

The table shows that the 35% royalty option pays a higher royalty, which is $1.40.

Now scroll to the right: The royalty won’t increase unless the file size is reduced at least 30%, and even then it only pays 7 cents more.

Scroll further to the right: If you reduce the file size 50%, then the royalty would improve to $1.95, compared to $1.40.

Table 1: $2.99

Table 2: $3.99

Table 3: $4.99

Table 4: $5.99

Table 5: $6.99

Table 6: $7.99

Table 7: $8.99

Table 8: $9.99

TEST IT OUT

If you find that reducing your converted .mobi file size may have a significant impact on your royalty, the next step is to see if you can reduce the file size as much as you expect, and, if so, what quality output you get.

Usually, most of the file size comes from images.

Amazon already compresses images when you upload your book to KDP, so if you compress them yourself, they get compressed again.

If you have an idea for possibly reducing the file size, make a test book with a small number of images. Upload the test file with the original images, see what your converted .mobi file size is on page 2 of the publishing process at KDP, make a new test file using the method that you’re testing out, and see how much it reduced the converted .mobi file size (if at all).

If the file size reduced enough, preview the book carefully to see how well it came out. If you can sideload it onto a Kindle Fire with a large display size (in terms of pixels) and another device with a much smaller display size (in terms of pixels), that will help to see if the pictures are good enough.

(The Kindle Textbook Creator produces an efficient file size, maintaining quality images. It’s suitable for an image-heavy book, or a textbook. But the resulting e-book has fixed format, works with pinch-and-zoom, and the e-book won’t be available for purchase from some devices, like the Kindle Paperwhite. This is suitable for some kinds of e-books, but not others.

If you have a very large file size, and you have a e-book that might be suitable for the Kindle Textbook Creator, it might be worth testing Amazon’s free tool out.)

Write happy, be happy. 🙂

Chris McMullen

Copyright © 2016

Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers

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