eBook Agency Model

Under the agency model for eBook distribution the publisher establishes the price and allows the distributor to keep a fee; usually 30% of the price set by the publisher. The publisher receives 70% of the revenue.

This is different from the wholesale model where a distributor; i.e. amazon, purchases the ebook at a wholesale discount (usually 50%).

The agency model has been adopted by Macmillan and Hachette for the distribution of their ebooks. It was first popularized by Apple’s ebook distribution agreement for their iPad product – that allowed publishers to select one of two prices: $12.99 or $14.99 for their eBooks.

Since more eBook royalties are based on net receipts the new agency model; with its higher prices and lower discounts, will mean higher royalties for authors.

Our royalty software can easily handle this. You setup a royalty rule based for a specific format (eBook) that pays a percentage of net receipts.