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How much could a first time author expect to make from writing and selling a book?
Writers are often disappointed to discover how little their first book will generate via the traditional publisher route. Additionally a publisher may take three months to do the business and another three to six months before the book is finally published.
The approx. cost / revenue splits are;-
- Production cost – 10% to 12%
- Bookstore margin – 30% to 40%
- Distribution cost – 12% to 15%
- Publisher margin – 25% to 35%
- Author - 10% or thereabouts, perhaps up to 15%.
Authors will more likely be paid any ongoing royalties either quarterly or twice a year after deductions for returns.
A Piece of the Pie
Normally the author receives a payment before the book is printed, this is called the author's advance, if this is a first book and you do not have a portfolio of magazine publications, solid self publishing sales, or literary prizes or awards or famous relatives (literary or otherwise) then your advance will be small. However if your first book is accepted then this is a very positive step. (if you are content to work for a small piece of the pie)
How Much Might the Advance be ?
You could be talking in the range of hundreds to several thousands of dollars to tens of thousands or millions depending on a number of factors,
- your public profile
- your connections or family profile
- the genre your book is written in
- the size of the book
- forward plans, for example more in the series
- an analysis of your web profile
- sales in other areas, for example music or film
Many publishers calculate the advance on a formula related to the size of the run, for example;-
Print Run Comparisons
Note: it is worth remembering that the run for the first book in the Harry Potter series was 500 copies, this is why they are worth around £20,000 pounds sterling each.
Applying the same formula makes 100% of the total royalty $400
A More Realistic Expectation
Taking the average price of $10.14, a first print run of 5,000 to 7,500 and a 75% Advance the new author could expect to receive $3,000 to $5,000.
When Will I Get It ?
The Advance is unlikely to be paid as one amount, often it is split into 3,
- 1/3 upon signing (there will normally be a contract and it is important to have your professional legal advisor look at the terms and conditions).
- 1/3 upon delivery of the final manuscript
- 1/3 upon completion of all editorial work by the publisher (this can often take months) and/or not until the book hits the shelves which would be months more.
Again depending on the terms of contract you may find that the publisher will retain a % of the advance to cover returns, at least for the first 12 or 18 months or more.
Lynn Viehl posted this example from a few years ago, her book Twilight Fall was published in July 2008 it reached the New York Times bestsellers list in its first week on sale.
- initial print run 88.5K
- ship of 73K.
- remaining in warehouse at July 15.5k
- cover price 7.99
- sale period Jul-Nov 2008 units sold 64,925
- Royalties $40,484
- held back for future returns $13,512
- net earning this period $27,721.31
- amount received Nil due to advance
a cover price of 7.99 with a royalty .6392 per unit = 8%
Initial advance $50,000
to Agent 15% $7,500
to taxes $15,000
to expenses approx $1,500
Net of the advance to author approx $26,000
What About Agents?
Many of the major publishing houses will not not accept work directly from authors but rather only via literary agents. The deal with your agent will be subject to a contract and part of your Advance will no doubt go to them. The Agent will normally receive 15% of your revenue from the publisher for the publication and other derivative rights associated with it, again this is the subject of a detailed contract.
The right Agent is worth her or his weight in gold and you will find it is not a matter of selecting the Agent but rather the reverse, Agents are like racehorse trainers, they do not want donkeys in the stable. All writers are donkeys (in commercial book selling terms.. do not take it personally) until proven otherwise. ;-)
Margins Associated with Self Publishing Hardcopy
Under the self publishing model the margins are a little different;-
- Production cost – 20% to 30% (for low volume POD*)
- Bookstore margin – 30% to 40%
- Distribution cost – 15% to 20%
- Author - 35% or thereabouts
(POD = print on demand)
When publishing a book yourself you must be realistic about building in costs;-
- cover art design - the book will benefit from a professional design
- editorial services - a professional freelance editor is essential
- typeset & formatting charges - the book must be error free & visually attractive
Social Media Impact
Now with sites like 'Hubpages', Google+, Facebook and various social media sites together with your own web presence you must be able to demonstrate to any prospective publisher that you are active in your marketplace. The crucial measurement here is that you have readers (fans) calling for more more... You must not pay the publisher, Self publishing is a very acceptable alternative route.
Margins with Self Publishing an EBook
Under the self publishing model the margins are dramatically different;-
- EBook portal margin (Amazon) – 30%
- Distribution cost – 0%
- Author - 70%
When publishing an EBook yourself you can engage outside experts on a simple fee basis, these costs will be one time only and can be clearly identified, plus it is increasingly becoming an open market with authors buying in expert services according to their requirement/budgets.
Depending upon the nature of the publication you will have;-
- Production cost - a fixed fee with the cost depending on formats etc
- cover art design
- conversion charges - the book must render correctly in mainstream devices
Again as with any publication the author must do real work in promotion and marketing.
EBooks & Legacy - Joe Konrath a MUST Read
The best ongoing discussion on legacy publishing and Ebooks is by Joe Konrath (IMHO)
More Resources on the Money
- Professional Writers Association of Canada
The Professional Writers Association of Canada have a very detailed page on What to Pay Writers.
- Free Resources for Writers
The American Society of Journalists and Authors is the professional association of independent nonfiction writers. some excellent advice and information here.