[ivansavz]

Is that 12.5% of the list price or 12.5% of the profits?

E.g. if the list price $100, the publisher sells it wholesale for $45 and the printing cost is $10, will your royalty be $12.50 or $4.37=(12.5% of $35)?

[erroneousfunk]

12.5% of publisher's revenue. In this case, it's 12.5% of $45. Publisher eats manufacturing costs, which is why their percentage is higher.