Chartered Financial Analyst specializing in media and publishing business models.
Determine how many books you must sell to cover your total costs as an author. Enter any three variables—Total Fixed Costs, Royalty per Book, Variable Cost per Sale, or Breakeven Books Sold—to solve for the fourth.
Author Breakeven Calculator
Author Breakeven Formula
The breakeven formula for an author finds the number of books (Q) they must sell for their total royalties to equal their fixed and variable costs.
Q = F / (P – V)
Solve for Total Fixed Costs (F):
F = Q * (P – V)
Solve for Royalty per Book (P):
P = (F / Q) + V
Solve for Variable Cost per Sale (V):
V = P – (F / Q)
Variables Explained
- Total Fixed Costs (F): Your total, one-time “upfront” costs (e.g., professional editing, cover design, formatting, initial marketing budget).
- Royalty per Book (P): Your net profit per sale (for self-publishers) or the royalty paid by your publisher.
- Variable Cost per Sale (V): The direct costs per sale *you* pay (e.g., per-sale ad cost, transaction fees if self-publishing).
- Breakeven Books Sold (Q): The total number of books you need to sell to reach $0 in profit.
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What is an Author’s Breakeven Point?
An **Author’s Breakeven Point** is the number of books an author must sell to earn back all of their upfront financial investment. This is the minimum sales volume needed to start being profitable on a book project.
**Fixed Costs (F)** are your “upfront costs.” These are the expenses you pay once, regardless of how many books you sell. This includes professional editing, cover design, book formatting, ISBN purchase, and your initial launch marketing budget.
**Royalty per Book (P)** is your *net revenue* from one sale. If you’re traditionally published, this is your royalty (e.g., $1.50). If you’re self-published, this is the book’s price minus the platform’s cut (e.g., $9.99 price – $3.00 Amazon cut = $6.99 royalty).
**Variable Costs (V)** are the costs tied *directly* to each sale *that you pay*. For most authors, the main variable cost is advertising (e.g., you spend $2.50 in ads on average to get one sale). For self-publishers, this might also include transaction fees if selling direct.
The **Contribution Margin** (P – V) is the net profit from a single book that goes toward paying off your large fixed costs. This calculator finds how many sales are needed to cover your total overhead. Every book sold *after* this point generates your net profit.
How to Calculate Author Breakeven (Example)
Let’s calculate the breakeven point for a self-published author.
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Identify Total Fixed Costs (F):
The author spent $5,000 on editing, cover design, and launch ads.
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Identify Royalty per Book (P):
After Amazon’s cut, the author earns $7.50 per book.
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Identify Variable Cost (V):
The author’s ad campaign costs $2.50 per book sold (Cost Per Acquisition).
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per sale: $7.50 (P) – $2.50 (V) = $5.00.
Next, divide the fixed costs by this margin:
Q = $5,000 / $5.00 = 1,000 -
Conclusion:
The author must sell 1,000 books to cover all costs and start making a profit.
Frequently Asked Questions (FAQ)
If you paid nothing (your publisher paid for editing/cover), your (F) is $0. However, you can set (F) to the value of your *advance* (e.g., $5,000). The calculator will then show how many books (Q) must be sold to “earn out” your advance.
For e-books priced $2.99 – $9.99, Amazon pays a 70% royalty. So, a $9.99 e-book has a (P) of ~$6.99. For paperbacks, (P) is (60% * List Price) – Printing Cost. You must calculate this net royalty as your (P).
This is your total ad spend divided by total books sold. If you spend $100 on ads and sell 40 books, your (V) is $2.50 per book.
Enter your (F) (e.g., $5,000), (P) (e.g., $7.50), and your sales goal (Q) (e.g., 2,000 books). Solve for (V): `V = $7.50 – ($5,000 / 2,000) = $7.50 – $2.50 = $5.00`. This means you can spend up to $5.00 per sale in ads and still hit your goal.