Advances and Royalties

I taught a writing class last week and the question came up, as it always does, about advances and royalties. It's really exciting to be offered a book contract. When you receive that much-awaited-for phone call from an editor offering to publish your book, he or she will say what they're offering for an advance and what your percentage of royalties will be. The average advance is from $3,000 to $10,000, depending on the publisher, the genre of your book, and how many copies the publisher thinks they can sell. Royalties are usually based on 10% of net income received by the publisher after discounting your book for bookstores.

An advance isn't a gift; it isn't a loan, and you don't have to pay it back if your book doesn't sell well. It's a prepayment of your expected royalties. An advance is earned out through the sales of your book. For example, let's say you receive a $10,000 advance and your book sells for $14.95. After a standard 40% discount, your publisher will receive $8.97. Your 10% net royalty will be $0.87 on each book. To earn out the advance, your book will have to sell 11,494 copies before you start earning royalties.

Many books also sell first and second serial rights, book club rights, and foreign rights. Your publisher will usually take a 50/50 split on these so the income from these sales will also accrue to your royalty account, helping to earn out your advance.

Now for the bad news: 7 out of 10 books never earn out their advance. The good news: You don't have to pay back any unearned portion of your advance. It's yours to keep. More bad news: Most books are given a shelf life in the bookstore of anywhere from 7 days to 3 months. If your book doesn't sell, or develop wings and fly, or grow legs and walk, your book is removed from the bookstore. The good news: Your publisher will help by sending out press releases, obtaining book reviews, selling subsidiary rights, and by pre-selling your book to bookstores through their sales reps.

You can help boost your book sales and ensure a long shelf life, accompanied by regular royalty payments, by promoting your book through booksignings, lectures, and other personal appearances. Perhaps the most powerful marketing tool you have to help get the word out about your book and sell mega copies is through your online presence--your website and a blog.