The Shockingly Simple Math of Earning Money on Amazon KDP

TL;DR: If you’re not prepared to invest $300–$400 (in cash or time) to make your first $1,000 in royalties, your odds of success are the same as hitting a casino jackpot.

-----

After four years in publishing, the most common question I saw is, "I published my book, when will the dollars start piling in my account?"

Authors see a few books hit the stratosphere and assume it's just luck. A magic trick.

It's not.

The authors who consistently outperform everyone else aren't wizards. They're business owners. They understand that the "KDP" in Amazon KDP doesn't just stand for "Kindle Direct Publishing" – it stands for "Knowledge", "Dedication", and "Planning."

The good news? Their success is just math. And you can do math.

The 30-40% Rule: The Math They Don't Talk About

You're browsing Amazon and see a book in your niche that's consistently ranked. You use a royalty calculator and your jaw drops. That book is pulling in $10,000 a month in royalties.

Here is the secret you're not seeing: That author is very likely spending $3,000 to $4,000 a month to get those royalties. That's the rule of thumb the pros know: A successful, scaled book often reinvests 30-40% of its royalties directly back into marketing.

This isn't profit they're throwing away. It's the cost of doing business. It's the fuel. That money goes directly into Amazon Ads, strategic Facebook ads, TikTok content creation, Instagram community management, and newsletter placements.

They aren't making $10,000. They are spending $4,000 to acquire $10,000.

Applying the Math to Your Goal

Let's set a more common goal. You want to generate a consistent $1,000 in monthly royalties.

Congratulations, you now have your marketing budget.

Using the same 30-40% rule, you must be prepared to invest $300-$400 per month to make $1,000 a reality.

This is the number that separates hobbyists from professionals. The hobbyist sees that $400 as a "loss." The professional sees it as the investment required to generate a $600 profit and build a sustainable author platform.

The "Sweat Equity" Variable: Paying in Time

What if you're just starting and don't have $400 a month to spend on ads?

You don't get a pass. You simply have to pay the fee in a different currency: Time.

This is where the math gets personal. Take that $300-$400 budget and divide it by your realistic hourly rate.

If you're a consultant who bills at $100/hour, you need to find 3-4 hours of focused, high-leverage marketing work per month (like managing a complex ad campaign).
If you value your time at a more standard $25/hour, you're now looking at 12-16 hours of dedicated marketing work per month (pitching newsletters, creating social content, building an email list, etc.).
If you are in your country where $3/hour is a good salary (I speak from experience, I am originally from such a country), you need 100-130 hours of grinding, because you will be forced to work manually, not using expensive but helpful services.

This isn't "checking Twitter." This is focused, strategic work. If you aren't willing to invest the money or the equivalent time, you are not running a business.

The KDP Casino: Publishing on a Prayer

At this point, someone always says, "But my friend's cousin published a book, did nothing, and it became a bestseller!"

And I say, "That's great. I also know a guy who won $50,000 on a scratch-off ticket."

If you do not spend the required amount of money or time, you absolutely can still have a bestseller. You can also win big at a casino. The chances of both events are statistically similar.

Relying on the algorithm to "discover" you is not a plan. It's a prayer.

The math is simple: Royalties - (Investment) = Profit.

The "shocking" part is that the investment – whether in dollars or dedicated hours – is not optional.

This is my takeaway from the few years on Amazon. Do you agree?

14 comments