They are soliciting authors which is why I am wondering whether what they say their royalties are is 1) possible at all. and 2) sustainable given that it costs $117 to start each title on LS on top of whatever they actually invest in editing and art etc.
Honestly? I don't believe this person has a single clue about the publishing business. I say this because that royalty rate is
not sustainable by any means. He likely doesn't realize the cut a distributor takes is often 60%--or more--of the cover price. He would, at the very least, be operating at a -10% deficit just on the royalties alone. Here's the math: 100% of cover cost minus the distribution cut of 60% less the 50% given to the author leaving -10% of cover price. Then you get into the realm of paying for cover art and editing--at the very least--and you are operating at a constant deficit that cannot be sustained long term.
What I see is someone who couldn't get published--or didn't even try--deciding to start their own company to 'teach the greedy publishers a lesson' by giving high royalty rates to the authors. What they fail to grasp is publishing isn't a simple matter of 'put a book out and rake in the dough'. There are operating expenses involved--those covers and edits at the very least--and distributors take their cut of the book before you see a single dime back on your investment.
