Revenue is the total amount readers paid. Royalties are the portion that reaches you after the retailer takes its cut. A book generating $10,000 in revenue on Amazon might pay $7,000 in ebook royalties — and neither figure is profit, because production and marketing costs have not come out yet. Three different numbers, routinely used interchangeably, and confusing them is how authors think a book worked when it didn't.
Four numbers, in order, from biggest to the one that actually matters:
1. Gross revenue (or "sales"). List price × units sold. What readers handed over. It is the largest and most quotable number, which is why it turns up in author announcements and almost nowhere in accounting.
2. Royalties (or "net receipts," or "earnings"). What the platform pays you. Revenue minus the retailer's share, minus delivery or printing costs. On Amazon that is roughly 70% of an ebook priced $2.99–$12.99, or about 36% of a paperback's list price once printing is paid. See How much does Amazon take from a book sale?
3. Contribution. Royalties minus the direct costs of selling that unit — chiefly advertising. A book earning $3.50 a copy while ads cost $2.80 per sale is contributing $0.70, not $3.50.
4. Profit. Contribution minus everything else: editing, cover, formatting, ISBNs, software, and your own time if you count it honestly.
The gap between these numbers is where indie authors misjudge their business.
Contribution per unit, per format, per channel. It is the only figure that answers the question that matters: does selling one more copy make me money?
Revenue tells you about interest. Royalties tell you about terms. Contribution tells you whether to keep advertising.
General information, not financial advice. Verified 9 August 2026.
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