advance paid AGAINST royalties?

As I understand it that's exactly what it means.

yes. that's why it's called an "advance."

they pay you royalties in advance because it takes quite a long time until you actually start getting royalty checks.

in fact, few writers even earn out advances.

Yes. And that's why many first-time novelists get very little in the way of advance.

Publishers try to set the advance equal to the expected royalty earnings from the book.

Basically, yes.

Also, if you get a $5000 advance, and the book never earns out (never earns $5000 worth of royalties), you still keep the full advance.

The money made from your book's sales goes into an account until the total amount of the advance has been paid back, or "earned out". The author receives no royalty monies until his advance has earned out.
Something like 70 percent of books don't earn out.

What they said above.

If your royalty is 6% of the cover price of a 6.99 paperback, then you get about .56 for each book sold.

For a 3000.00 advance you have to sell 5,357 copies--which is close to that 5K print run.

Any sales OVER that advance are your royalties and then you get a check.

If you have that high a sell-through they might go for a 2nd printing. More royalties!

Also--in a multi-book deal, you NEVER EVER have the books "joint accounted."

If you land a 3-book contract with the titles joint accounted it means you get NO royalties on book 1 until after book 3 has earned out. This is even if books 1 & 2 have earned out.

(That's how I understand it.)

Annnnd since that 3rd book might not earn out you've got no chance of making anything more on the 1st, just that initial advance.

Read through any contract and X out any clause that says "joint accounted." It's usually a boilerplate item, good for the publisher, but bad for the writer.

A good agent will know to do this. I learned it in my delvings into the library's 808 section. Good thing, too since I didn't have an agent on that first sale.

Another "gotcha" that happened to one of my friends was when a lukewarm publisher declined to offer her another contract on the basis that "your books only sold 5K copies."

Actually, that's all that they printed. She had 100% sell-through, but they shot themselves in the foot and cut her loose.

Good thing for her. She's with another house, making more money, and selling like crazy.

Hey guys,
So how do you know how many of your books have been sold?

J

I can only speak for textbooks, but I get a statement every year with my royalty check. It details all the particulars. I guess if you had a less than reputable publisher, you'd be in trouble.

smelling_salts said:

Hey guys,
So how do you know how many of your books have been sold?

J

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Your publisher sends you a statement regularly, anywhere from every three months to annually. It will include the number of copies sold.

smelling_salts said:

Hey guys,
So how do you know how many of your books have been sold? J

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Twice a year with some, quarterly with others, I get a royalty statement on each title. Some are sent to my agent to send me a copy, others come directly to me.

It will list books sold and how many, books returned and how many.

It will have numbers. Loooots of numbers.

Agents understand all this. I just look to see if they included a check.

The only time I ever understood a royalty statement was one prepared by a publisher who used to be in marketing. HIS statements were totally clear.

If you want to know how many books are printed vs. sold, well, that's usually a deep dark secret, but you can request the publisher do a count for you.

There's a term for that, I *think* it's called a reconciliation count. I've not had one done in a couple years now. The protocol is to ask your agent in writing to ask the publisher.

Essentially they send some poor sod out to the warehouse to count boxes. He sends the number to the bean counters, then you're sent a copy. I've had this done a few times just to see what's going on. A few of my books went to 4 & 5th printings, but didn't seem to be earning much money.

It can be construed as not trusting the publisher to be honest on the royalty statements, that's why you ask your agent to ask for you.

Then there are returns. Those are the unsold books sent back to the publisher. (The torn off covers are what's sent.) You get no royalty on those.

There are also "reserve against returns."

This is only an example:

Publisher prints 5000 copies, but holds back 40% of them in the warehouse against returns.

This means they HOPE the book will sell well, but have insured themselves in case only 60% of the print run sells.

If they get returns on that 60%, then they've saved themselves some money by not sending out that other 40%. (Those are remaindered.)

That's how I understand it, I could be wrong.

On the other hand, if the book sells well and the stores order more, the publisher sends out that remaining 40% and considers doing another printing.

I once had a book with a 90% sell-through--which is considered to be a freakin' miracle for a hard cover, but the publisher (they were into games, not book publishing) didn't think it had done well at all. Most houses would be turning handsprings for that kind of sell-through, though.

When you go to a store with stacks of sale books where a black marker has been swiped across the edge on one side, those are remaindered copies. The store buys them for 1-2 bucks each, slaps on a "Sale, only 4.95!" sticker, and makes some bucks.

On one vacation I stopped at BookCloseouts in Canada and picked up 4 cases of my own titles that were remaindered. I've been selling them at a discount when I guest at conventions. Those don't count as royalties, but it gives me gas money

You would do well to go to the 808 section of the library and look for a book on publishing contracts, as it will explain ALL this in greater detail. I read it about 20 years back and things may have changed since then!

Yeah, royalty statements. I don't know how many they printed, but I do know how many they sold in a particular period.

Royalty statement

It's been my experience on both sides of the desk that royalty statements are always fudged just a bit against against returns. True sales numbers usually lag behind, and bleed over to the next royalty statement.

Gillhoughly said:

On one vacation I stopped at BookCloseouts in Canada and picked up 4 cases of my own titles that were remaindered. I've been selling them at a discount when I guest at conventions. Those don't count as royalties, but it gives me gas money

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It also seems like a brilliant way to get your name out there.

Gillhoughly said:

Publisher prints 5000 copies, but holds back 40% of them in the warehouse against returns.

This means they HOPE the book will sell well, but have insured themselves in case only 60% of the print run sells.

If they get returns on that 60%, then they've saved themselves some money by not sending out that other 40%. (Those are remaindered.)

That's how I understand it, I could be wrong.

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I don't think you've got it quite right. I posted about reserve against returns here: http://www.absolutewrite.com/forums/showpost.php?p=633211&postcount=5244

Meanwhile, a 90% sell-through means that the publisher didn't print enough copies.

James D. Macdonald said:

I don't think you've got it quite right. I posted about reserve against returns here: http://www.absolutewrite.com/forums/showpost.php?p=633211&postcount=5244

Meanwhile, a 90% sell-through means that the publisher didn't print enough copies.

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Right on both counts.

What's held back in the "reserve against returns" is royalties, not printed copies.

The glow from the computer screen is all that lit the room. Your eyes adjust, and you can see a man sitting at his desk surrounded with papers and books in a chaotic mess. The smell of coffee, donoughts and wet dog slowly creep up to you. You take a step closer and notice his body is hunched over and his fingers are chirping away at the keyboard. You have an unbearable urge to find out what he's writing. The man starts to mutter to himself but you can't make out what he's saying. You decide to take another step and as you get a little closer, his back arches in a violent and painful way, his face contorted from the pleasure or pain, he screams, "I've got it! Thank you absolute write forum, for another piece of the puzzle."

You guys are always informative

J

I don't think you've got it quite right. I posted about reserve against returns here: http://www.absolutewrite.com/forums/...postcount=5244

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Yes, go with what Uncle Jim has to say on royalties, returns, etc. I'm a scribbler, not a bean-counter, there's only room in my head for one thing at a time. Uncle Jim breathes this stuff!

Meanwhile, a 90% sell-through means that the publisher didn't print enough copies.

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Oh, this bunch printed MORE than enough copies--they just thought the book was supposed to have a 100% sell through. I was buying remaindered copies from the bargain tables for years afterward.

They were a gaming company with no real background at selling books.

I got paid on copies printed--not copies sold--and had a HUGE royalty check when it went to print, then nothing for about 5 years until it earned out. Like PA they insisted bookstores buy their books and had no return policy. (The books sold, though, rather well in that market.) They've changed since then. I think.

They also sent me HAND WRITTEN royalty statements! (THAT was a real WTF moment for me!) Even my agent at the time couldn't get anything more than that.

Over that 5 year period I got THREE statements--and then only if I phoned them up and asked real loud.

Sheesh.

They went out of business, sort of, selling to Wizards of the Coast (then to Hasbro)--who hired a proper staff to do royalty accounting. I get statements every quarter now. Typed, not printed.

I'm still getting money from that title, so I guess it's worth it.

Gillhoughly said:

They went out of business, sort of, selling to Wizards of the Coast (then to Hasbro)--who hired a proper staff to do royalty accounting. I get statements every quarter now. Typed, not printed.

I'm still getting money from that title, so I guess it's worth it.

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Do you mind telling us what the title is (or if you prefer can you PM it to me?). I've read some of the books printed by that company and I'm just curious if I've read yours (or have it on my bookshelf). Thanks.

Take care all -

Just a couple of miscellaneous comments to add to the store of useless knowledge (useless because one can't use it to change publisher practices, not useless because it's unhelpful in understanding the way publishers think):

• "Advance against royalties" is a really strange legal construct that has gotten even stranger in the evolution of the publishing industry. The amount of the advance from mid-sized and larger commercial publishers tends to predict "profitability" something like this, presuming thoroughly honest accounting (never a good assumption anywhere even peripherally related to entertainment):
  royalty earnings over life < 75% (approx) of advance = publisher loses money
  royalty earnings over life between 75% and 100% of advance = publisher profits, but author restricted to advance
  royalty earnings over life > advance = publisher and author profit over advance
• "Reserve against returns" is a consequence of the fact that legally, publishers don't sell copies to bookstores, no matter what the language on their invoices (etc.) is; legally, publishers consign books to bookstores, which in turn sell them to end-users. This is a direct corollary of the UCC, which has been around since the 1960s in every state. Since it's been less than half a century, we shouldn't be surprised that the industry hasn't caught up yet.
• "Reserve against returns" becomes abusive once there is more than one edition (including merely differing cover prices) of a book out during the in-print life of the book. There's a mathematical proof of this for each of the four common methods of calculating the reserve.

My-Immortal said:

Do you mind telling us what the title is (or if you prefer can you PM it to me?).

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Nope, sorry on both counts.

I prefer to not be "me" here, as the moderators would have the sad and terrible task of reigning in my rampaging ego. It has left a trail of bleeding wounded, lemme tell ya!

Being here anonymously it means I have no other agenda than to help other writers--much better than promoting myself.

Anyway, the book was a "work-for-hire" which is a whole 'nother taste treat. Some are good (I know mine is) but others can be hack work written to get a check. We've all read those.

WFH's are the fast food of publishing--but once in a while you'll find a Wolfgang Puck flipping the burgers if the money's good enough.

Gillhoughly said:

Nope, sorry on both counts.

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That's quite all right. I totally understand.

Take care.

Gillhoughly said:

Anyway, the book was a "work-for-hire" which is a whole 'nother taste treat. Some are good (I know mine is) but others can be hack work written to get a check. We've all read those.

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How can it be a work made for hire book and still get royalties, or did I mis-read your earlier posts?

Tish Davidson said:

How can it be a work made for hire book and still get royalties, or did I mis-read your earlier posts?

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My agent made sure that royalties were part of the deal.

You used to not get them, but even low end 2% royalties can add up to a heck of a check if there are enough sales.

Tons of "name writers" will do a WFH because the sales are great--just check all those Star Wars & Star Trek novels that sold so well. I heard Timothy Zahn was able to buy a ranch in Montana for what he got on his first SW book. (I could be wrong, it's just dish I heard in the bar at a convention.)

You used to not get them, and some houses still offer only a flat fee. That's where you end up with a hack in need of cash.

But even with a royalty added in you can still get a hack!