Understand Book Advances and Royalties



For those who choose to go the traditional publishing route, it can seem nearly impossible to navigate the labyrinth of corridors of the publishing house. But, of all the things that can be confusing in the publishing world, the money you receive for your writing is likely at the top of the list.

The Advance

First, you must understand why compensation works like this. Writing isn't a job. It's a craft and that means you're being paid according to what your publisher thinks your book will be able to earn when released.

For most writers, that means a standard advance on royalties, followed by royalties on all sales that go beyond your advance. The publishing house will pay you an upfront fee to gain rights to your book. This advance is applied against future royalties from your book sales. The publisher then takes on many roles with your book including editing, polishing, titling, artwork and some marketing.

Royalties

After you've received an advance and handed over your manuscript, done the requested edits, and your book begins to sell, you’ll receive royalties on each sale. Royalties from sales of your book, merchandise or other rights are negotiated when the book is purchased by the publishing house in the initial contract.

An advance is an early payment on your royalties. After the advance is fulfilled you will start to earn the originally agreed upon royalties. These rates are usually 10% to 12.5% for hardcover books, and 7.5% to 10% for paperback books. There are certain exceptions to these rates, however, including high discounts when large quantities are sold to chain stores, publisher’s discounts and whether you opt for “published price” or “price received”, the latter being the total income earned by the publisher.

In short, your book revenue will depend greatly on the method in which a contract is set up when you first sell your manuscript. Pay close attention and acquire a top literary agent. You’ll be happy that you did.