Advances, Royalties, and the Financial Difference Between Traditional and Self-Publishing
Back in the day, the only way a writer could get paid to write a book was to sign a book deal with a traditional publisher, like Random House or Simon and Schuster. Not many writers were chosen for publication and gatekeeping for whose books were published and whose weren’t was strict. Some of these writers made decent money through advances and royalties. I’ll explain that in a minute.
Before the internet era, some writers self-published, because they couldn’t get their writing through traditional doors or, they didn’t try. Unless they had a way to market and distribute their books, the chances of making any money were limited. That’s why self-publishing got a bad reputation. People called self-publishers “vanity presses” and thought the writers who went this route were attention seeking, not good enough for publication, and too big for their britches. Things have changed drastically in the self-publishing world and I, for one, am happy about that.
The way writers make money with a traditional publisher is by getting an advance and royalties.
An advance is a chunk of money a writer gets before they write their book. It’s intended to provide them with income so they can afford to write their book and it is usually distributed in 3 or 4 payments. They get the first, when they sign their book deal. The second when their completed manuscript has been edited and approved by the publisher. The next check arrives when the store hits shelves and, if their contract is written this way, their last check arrives when the paperback copy comes out. Distributed this way, advance payments are divided and spread out over a couple years. If they get a $25,000 advance, that means they’d get a check for $6250 when they sign the deal, another about 6 months later, a third a year after that and another a year after that. The writer is also usually expected to spend some of that money on marketing the book themselves. It’s not a huge money-maker.
Royalties are a percentage of the profits a book generates after the writer “earns out.” That means their book sells well enough to earn back their advance money. However, most writers get less than 10% of a book’s profit in royalties, which means, they have to sell a lot of books if they’re going to make any money. A best seller that continues to sell well for many years can generate a decent income for some writers. Let’s say a writer’s contract stipulates they get 10% royalties (many writers earn less than that). That means that if their book sells for $14.99, they’ll earn $1.49 per book. However, if they receive an advance of $25,000, they have to sell almost 17, 000 books before they “earn out.” Most traditionally published books sell fewer than a few thousand copies, which means most authors never get royalty checks.
If you self-publish through Amazon, Shopify, Apple Books, and similar companies, they will print, sell, and ship your books for you. You can sell your self-published books at events and directly through your business or social media. Other than costs for printing and shipping, most of the profits go to the author. The average self-published author can get 70% of each book sale. For some people, this is a cash cow, especially if they have a huge following and readership. The downside of self-publication is that if you want to make a buck, you need a powerful audience to ship, distribute, and market your books to.
The publishing world is changing and coming up with new ways to attract and market writers and we have the internet to thank for that. It means more writers can get their stories published and honestly, that thrills me. When you look back a generation or two, you notice that very few non-white, non-male writers were ever published. The books we read and the knowledge we gained was strictly gatekept and the publishing world was very exclusive. Self-publishing and the internet have opened the gates and given more authors than ever the opportunity to make a living. It’s still not easy, but at least now, it is possible. Let’s see what the future holds.
