Melanie Spiller and Coloratura Consulting
Copyright 2020 Melanie Spiller. All rights reserved.
Royalties and Advances
Melanie Spiller and Coloratura Consulting
Earning money is part of the motivation for writing, but how you get paid may not be as straightforward as
you’d hope. I don’t mean to put anybody off, but writing big fat technical books is no way to get rich. There
are some publishers who behave differently, but in my experience in many years of publishing, what I’m
about to share with you describes my experience honestly. If you’re going into this line of work, you should
know what’s coming.
Magazine and online publishers talk in terms of price per word or a set figure for a given project, and book
publishers talk in terms of royalties and advances (unless you’re the reviser—more about that later).
Royalties are a percentage of the profits of the book. The profits mean about 50% of the price of the book.
The other 50% goes to the cost of producing the book.
First-time authors can make as little as 5%, hugely best-selling super-authors might earn 15-20%. So if the
book is priced at $60, you get, say 10% of $30, times the number of copies sold. If you figure that the
publisher won’t take your book project on unless selling 10,000 copies is feasible, that’s:
10% of $30 = $3
$3 x 10,000 = $30,000
That doesn’t sound too bad, unless you consider that it’s the wages for about six months of nearly full-time
work.
Advances are different. Advances do not mean “wages,” they mean “advances against royalties.” That means
that you have to earn back the advance before you earn any royalties. So for you, the author, royalties are
like gambling and advances are like price per project. You get paid your advance based on milestones met,
but you won’t necessarily earn meaningful royalties unless the book does well. You don’t have to give
advance money back if your book doesn’t sell well.
Most publishers set advance payment milestones at first 25%, 50%, 75% and final submission of the
manuscript, and some have additional milestones, like when you sign the contract, at final author review, and
when the book is in print. The cash paid is usually evenly divided among the milestones unless you have a
known history of being late or bailing, in which case there might be penalty clauses or the payments might
be heavily weighted at the end of the project.
It’s not very likely that the publisher will give you the $30,000 in advances that your royalties promise; a
third or half is much more likely. Divide that across your milestones. So you might get $10,000 across three
or four months and then have to wait until the royalties start coming in. You have to earn back the royalties
first, so you might wait a year or more to see a check worth cashing.
Let’s say your book comes out in December and you’ve accepted 10% and $10,000. At the end of the first
six-months of sales, if your projections of 10,000 sold are accurate, you’ll have sold at about 7,500 copies.
That’s:
$3 x 7,500 = $22,500
You’ve got to subtract the $10,000 you took as an advance, so that first check—a year after you began the
project—is $12,500. That’s not too bad, but sales usually drop off after the initial release of a product, and
ensuing checks will be smaller and smaller. I remember one time putting a check for $8 in an envelope to
mail out to the poor author. I felt like we should have put S&H Green Stamps in with it. But anyway, you’re
looking at $22,500 over a year.
There are other scenarios, too. If you’re collaborating, for instance, you split everything. If your team earns
10%, you’re only getting half of that unless your partner agrees to some other arrangement. At six months,
5% of that $60 book is:
$1.50 x 5,000 = $7,500
Subtract your half of the advances (your advance is still $10,000 now split in two), and you’re getting $2,500
in royalties for six months of sales. If there are additional authors with their names on the spine, you’re
splitting again and again. You might be getting 2- or 3%. Most publishers raise both royalty and advances for
teams of three or more because no one will work for 3- to 6-months for $3,000 and 2%, but you still can’t
expect to get rich.
Another interesting spin is to gamble on book sales. You might agree to a lower starting percentage with
ramped increases based on how many books sell. It’s unlikely that a publisher will break out a percentage
before the 10,000 copies sold mark (that’s a minimal profit point), but you might get something like 7% at
10,000 copies, 10% at 12,000 copies and 12% at 15,000 and more copies. That way, you’re betting that the
book will sell more and the publisher is hoping that it does but bets that it doesn’t.
Revisions are another animal. If you’re revising your own book, you can expect to earn the same royalties
and advances or slightly more, and do less work. Yay! The publisher won’t ask you to revise unless sales
were decent in the first year, so you should be able to make some financial guesses based on the kind of
product changes in the wind and the sales on your existing book and the old version. Don’t hesitate to
negotiate with the publisher if you know that the changes to the product are earth-shattering.
Revisions mean that you only have to touch text and images changing in the new version. That’s likely to be
most of the images, but usually there’s a fair amount of functionality that stays the same. You’ll still spread
the work over three to six months, but you’ll be editing to the upgrade, and most likely only creating a few
new chapters from scratch. It’s a lot less work to revise.
Some authors chose to hire work-for-hire (WFH) as subcontractors for the original book or to revise an
existing book to a new version. WFH wages come out of the author’s pocket. Sometimes, the publisher cuts
the check for the WFH writer, but the money is subtracted either from advance monies or earning
percentages. If the WFH revises a whole book, you’ll still earn some royalties because it’s your name on the
spine, and you might possibly take a little of the advance, but the WFH author will get most of the advance
and usually no or very little royalty.
By the third revision, the reviser gets to put their name on the spine whether you like it or not. You have to
have some involvement with the book to keep your name there and to keep your earnings high. It’s only fair
to the reviser. The publisher may choose to remove your name at that point, unless they think continuity sells
books. Very few authors have enough cult following to warrant having their name on books they didn’t write,
and you’ll have lost all control over the content. Remember that you’re doing this for marketing purposes, so
just having any old book out there with your name on it doesn’t seem like that great an idea. If you’re the
reviser for a book like that, I hope you make it financially worth your while.
There are other issues as well, such as foreign licenses, steep discount clauses, and reserved monies, that
Mike Gunderloy covers in his article on this same subject. You’ll find that at
http://www.larkware.com/Articles/AdviceforWritersPart4.html.