Show Me the Money
December 22, 2016
Do you know anyone that has decided to become an author so they can get rich quick? Yeah, it’s a great idea, but certainly not a realistic one.
If this is your first book that you are writing and a publisher has accepted it, you will likely be given an advance of four to ten thousand dollars. The important thing to remember about this money, though, is that an advance has to be paid back to the publisher. Odds are the money you get will be on the smaller end if you are an unknown author. The advance will be paid back as your book begins to bring in money. In other words, you will not see any of the money once your book starts bringing in royalties until the advance is paid back in full. The advance is a great way to help cover some of your costs and bills while you are waiting for your book’s sells to skyrocket.
How about the royalties from the book sales? Well, most of the time, the contract from your publisher will list you as receiving somewhere between 10 to 15% of the royalties off of each sale. There are two different ways that the royalty percentages are figured. Some publishers will offer you the percentage in the contract based off of how much profit they make from the book, which is the net royalties. This typically is around half of the price of the book. Other publishers will pay out the percentage based on the list price of the book, or the gross royalties. Is that as confusing as it sounds?
Here is an example: Let’s say that your book has a list price of $10 and you have a contract to receive 10% in royalties off list. This would give you $1 per book that is sold. Now, if you are contracted to receive 10% of the net profits, you would only get about $0.50 per book sold. Keep this in mind before you sign a contract because that is a big difference in the amount you receive. Of course publishers prefer to offer the contract with the net royalties because they make a lot more money off of it.
Now, if you write an e-book, it is likely you will be offered a higher rate for the royalties. Also, if the sales of your book increase, you may get more money from the royalties. This is something you will have to talk with the publisher about putting in the contract before you sign it.