For a paperback book, consider these two figures for the previous 6-month period:
Sales at regular discount
6% (of cover price) royalty
Sales at 50% discount
5% (of money received) royalty
So, selling a $7.99 book at 40%, the publisher gets $4.80, and gives me 48 cents.
Selling the same book at 50%, the publisher gets $4.00, and gives me 20 cents.
Sales to date of the paperback (which has been out for three or four years):
This works out to 17 cents a book. Which means that a ton of books were sold at an even deeper discount than 50%. (In the interest of full disclosure, the hardcover earned a bit more than twice that.)
The bottom line is that I signed this contract, and have to live with the results. Obviously, I never expected the bulk of the sales to be at deep discount. Bad move on my part. At least, unlike the hardcover version, the publisher doesn't end up making more money by increasing the discount.
I'm going to let this topic die a natural death. I've written this post because I believe it is important for writers to understand the realities of royalties. I'd love it if others would post about this, or at least link to this post. In a fair world, this sort of clause would be replaced with a sliding scale. But I'm not in the mood to wage a one-man campaign. I'll let someone else joust with this windmill. Though I can't resist giving the link, one last time, to the information about the stunning unfairness of one publisher's hardcover deep-discount clause.