Agent & Querying Tip of the Week: How Authors Make Money

qatotw

As usual, today’s tips come from the 2011 Guide to Literary Agents. Today we will be discussing how authors make money.

1. Advances

An advance is just as simple as it sounds–money up front in exchange for something later. This means that you get money before your book even hits the shelves. The amount depends on the publisher. A small publisher will have smaller advances, and some don’t offer advances. Typically advances range in the thousands. If your book ends up in a “bidding war” between two publishers, you can probably get any amount you want, within reason.

Advances are yours to keep and can’t be refunded back to the publisher. It doesn’t matter if you only sell a few copies of your book–the money is still yours to keep. If you book doesn’t do well, though, it will hurt your career as a writer and may make it harder to find a publisher in the future.

“Advances are usually paid in installments. For example, one-third on signing the publishing agreement; one-third on “acceptance” of your manuscript (i.e. when your editor and you have agreed that ‘this’ is the version of your manuscript which will be published); and one-third when your book is actually published.”

Sometimes a publisher will try to delay paying out your advance by holding onto the publishing agreement that you’ve signed, but they haven’t. The agreement is not final until they sign it. You can avoid this by asking your agent to change the language in the contract to read that the first part of the advance should be payable within a certain amount of time (5-10 business days) after the publisher receives the agreement that you’ve signed.

Picture Source: www.officialpsds.com
Picture Source: http://www.officialpsds.com

2. Royalties.

A royalty has nothing to do with kings and queens–it’s the amount of money that you get each time a copy of your book is sold. When someone buys your book, you get a share based off of the list price (even if the consumer didn’t pay full price). Some publishers will offer a “flat fee”, where you are paid a certain amount no matter how many books sell. The downside to the flat fee is that if your book sells millions, you don’t get any extra money after your flat fee.

Here are the typical percentages of royalties based on hardcover books sold:

– 10% for the first 5,000 copies

– 12.5% for the next 5,000 copies

– 15% for all copies sold after 10,000

If your book sells for $29.99 and you sell more than 10,000 copies, you will get a royalty of $4.50 per book.

Royalties are usually paid twice a year, or whenever stated in the contract. Some publishers may try to cheat you out of your royalty money by having a provision in the publishing agreement. It will say something along the lines of “If the book is purchased by the retailer at other than our usual and customary discount, we will cut your royalty rate by one-half.” Your agent should be able to identify and solve this before it becomes a problem.  Also be careful about clauses in the agreement that allows the publishers to hold a reserve against returns.

3. Bestseller Bonuses.

If your book becomes a bestseller in the top ten or fifteen on a list such as The New York Times, you will also receive extra money. You will usually receive a bonus of $5,000 to $10,000. If your publisher forgets to cap the total amount of this bonus and you stay on the bestseller list for several weeks, you will make even more.

4. Third Parties (Movie/TV Rights, Foreign Rights, etc).

You’ll also make more money if outside sources want movie/TV rights for your book or if other countries want your book published in their language(s).

 

jncahill_name

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