Passive Income: Are Book Royalties Passive Income? 

 July 18, 2023

By  Jake Lang

Are Book Royalties Passive Income?

So, are book royalties passive income?

Yes! Absolutely. Book royalties are passive income. Writing books is one of the best ways to generate passive income.

Whether you go the traditional publishing route with a book publisher, or the self-published route through a program like Amazon KDP, the royalties you earn from publishing your book are passive income. You receive your check once a month for your cut and commission for each sale of the book. That is absolutely passive income. You do the work up front, putting all your effort into writing a great book, and then sit back and let the money flow in over time as your book continues to sell and reach new readers.

Sell More Books (for more passive income)

Now, the beauty of passive income is that you don’t have to do anything. Do the work upfront, then sit back and collect your check. But, if you do a little bit of work along the way, you can earn more and more passive income.

I highly recommend doing a little bit of marketing after you publish your book.

First, you should be doing a book launch to get your book out in front of as many people as possible, to get as many reviews as possible, to drive up as much engagement as possible. This will help you climb the rankings on the marketing platforms such as Amazon and Barnes & Noble.

Additionally, after the book launch, utilize content marketing methods such as blogging with SEO, podcasting, guest podcast spots, and vlogging to get out there and talk about your book. Add on a little paid advertising through Google and Amazon and you can drastically increase the audience you reach.

Simple marketing methods like this can get your book in front of new readers. The more people that read your book, the more likely it is that they will recommend the book to others, which in turn means more sales. So the more you are out there talking about your book, presenting your book, showcasing your book, and marketing your book, the more sales you will make, which leads to a wider audience, which leads to larger and larger passive income checks over time.

Upsell Products (for even more passive income)

While books do generate passive income, you should consider how much income you want or need to generate to reach your goals.

Are you trying to quit your day job by publishing this book? If so, consider the number of sales you would need per month to generate enough passive income to support your lifestyle.

For reference, when I sell my book on Amazon, I earned about $7 in passive income per sale. So, if I need $7,000 per month to pay my bills, mortgage, and factor in taxes, that means I need to sell 1,000 books per month.

That’s a lot! Unless you are a well-established author, have a massive marketing launch campaign, or write an incredible book that goes viral (that’s the plan)…unless you meet one of those criteria it’s going to be difficult to sell 1,000 books per month. Meaning, it’s going to be difficult to quit your job by publishing just one book. No matter how good that book is.

That’s the bad news. Books themselves might not reach your financial goal. The good news, books are an incredibly effective tool to sell your high-value products and services. What I recommend is you sell products AFTER the book. Use your books as a lead magnet (a profitable lead magnet at that). Use it as a way to generate leads, to which you sell additional products and services.

This is what I do, and it’s the biggest moneymaker for me. Books make me a little bit of recurring passive income ($500+ per month), but not enough to live on. It’s my membership and online courses that I upsell after the book that makes the money. That’s what helped me replace the income from my day job, so I was able to quit my job in 2021 to take on entrepreneurship full-time.

This upsell should be related to the topic of your book. This is easiest with non-fiction “how to” based books. This is what I write. It’s easy to sell an online course, membership, or coaching package that expands on the topic of your book with step-by-step instructions. For example, if you sell a personal development book, your upsell could be a video-based online course for $500. If you sell a cookbook, you could upsell a cooking membership at $20 per month and recommend affiliate products. If your book is about investing strategy, then upsell a one-on-one advising package for $1,000. That is a quick and easy way to 100x your revenue from the sale of one book. That is how you use books to generate massive passive income.

The best way to do this is by offering a lead magnet within your book. Something that your readers can download for free, in exchange for their email addresses. This way, the reader gets extra value in the form of a bonus download and joins your email list, where you can offer your upsell. For an example of this entire funnel, see my book Step One. In the book, I offer a free companion course with video-based tutorials and instructions to follow along with the book. Once the reader joins my companion course, I immediately offer them a special deal of 14 days free in The Entrepreneur Ride Along Membership. If they don’t take the special offer, then they go into my sales funnel where I provide more value, build a strong relationship, then later upsell my membership, courses, and coaching packages.

This process is a bit harder if you are a fiction writer, but it’s still possible. Your upsell can be print-on-demand physical products like a canvas map of your world, or character posters, or you could release an exclusive lore-expanding book sold exclusively as a PDF eBook through your website (or you could just write more books in the series). Or, you could even have a membership, where readers can come together in your community to discuss, ask questions, and chat with the author.

Book Royalties: Self Publishing vs. Traditional Publishing

One thing to consider is self-publishing vs. traditional publishing. Personally, I only self-publish my books. I self-published through the Amazon KDP program. You can self-publish ebooks, paperback books, hardcover books, and audiobooks all on the Amazon platform. This is my favorite way of generating passive income from books. With self-publishing there is no need to worry about the requirements and restrictions of a traditional publisher, not to mention most first-time authors actually have to pay the publisher to get their book published! As Scribe Media says, 99% of authors should self-publish (unless you are the 1% established influencer with a large following).

For me, I’d rather publish my book for free, not worry about any inventory or keeping the publisher happy, and let the book sell organically on Amazon as people search for the topic that I wrote about.

Either way, books are still passive income, so whether you self-publish or go with the traditional publishing route (depending on your deal with the publisher), you will generate passive income from your books.

Conclusion: Are Book Royalties Passive Income?

I’ve seen this question asked quite often: “Are book royalties passive income?”

The answer is yes. Unequivocally yes.

Book royalties are passive income. Books are a great way to generate passive income in your business. To rapidly increase the passive income you generate, I highly recommend you continue marketing your book after the launch through content marketing and paid advertising. To massively increase the passive income you earn from book royalties, you should also upsell your book with a high-ticket product or service such as a course, membership, or coaching package.

Jake Lang

Jake Lang is an author, entrepreneur, and founder of over seven online businesses. Jake now helps new entrepreneurs start and scale their first online business at TheEntrepreneurRideAlong.com where he shares his experiences along the entrepreneurial journey starting and growing new businesses.

It’s Jake’s mission to start a new online business every year and share everything behind the scenes on The Entrepreneur Ride Along Podcast and The Entrepreneur Ride Along Blog so that new entrepreneurs can learn from Jake’s mistakes, understand the struggles of starting a new business, and find the path to entrepreneurial success.

Jake Lang

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