How much money do novels make?

newshirt · Jun 16, 2007

I get the sense that novels by first-time authors are not (usually) extremely profitable. Until a reader-base is established, widening distribution to profitable levels, novels don't make a lot of money. And, I gather that because agents and editors know this, they cannot invest a lot of time fixing mediocre work.

So on average, how much money does a first-time author's novel make? And, how much of that goes to the agent and author?

--ray

reenkam · Jun 16, 2007

From what I know about the matter, an advance can vary a lot, depending on what kind of deals the agent gets with editors, how many books are in the deal, and the subject matter of the book. I've read about novel advances under $1000 and those over $100,000 for just the one book. It all goes on a case by case basis. There are first time authors who will get $500,000 four book deals, sometimes. That's a best case scenerio, of course, but it happens. I think it all comes down to whether the editors think that it'll market well or not.

Most agents have 10%-15% fees, meaning that's how much they take from your advance and then from your royalties. I think royalties are 7.5% on paperback and then 10% for the first 5,000 hardcover, 12.5% for the second 5,000 hardcover, and 15% for every book after that. Though you have to earn out your advance before you start making any of the royalties.

Lyra Jean · Jun 16, 2007

How high up on the best sellers list is the book?

Yeah I know that's not helpful.

Bo Sullivan · Jun 16, 2007

J K Rowling is a billionaire now, but that is a best case scenario.

Jamesaritchie · Jun 16, 2007

raywhite said:
I get the sense that novels by first-time authors are not (usually) extremely profitable. Until a reader-base is established, widening distribution to profitable levels, novels don't make a lot of money. And, I gather that because agents and editors know this, they cannot invest a lot of time fixing mediocre work.

So on average, how much money does a first-time author's novel make? And, how much of that goes to the agent and author?

--ray

If you mean from a large publisher, the average advance is about $7,500, and this is probably all the novel will earn. Agents get 15% domestic, and 20% foreign.

This goes down dramatically as the size of the publisher shrinks.

First time writers almost never get a better deal unless something special is happening, such as the writer having a famous name, or having a book that coattails another bestselling book.

Darned few first novels earn any money, and publishers do not throw money away lightly.

Del · Jun 16, 2007

I never understood why a publisher would hand out an exorbitant advance. If the book is going to pay out that much in royalties, a low advance isn't going to cause the author any loss. The money just comes later.

A big advance seems a gamble for the publisher. Why risk it? Are they afraid another publisher will make a better offer? Or is an extra $50,000 just not that big of a percentage within the scheme of publishing costs?

reenkam · Jun 16, 2007

Delarege said:
I never understood why a publisher would hand out an exorbitant advance. If the book is going to pay out that much in royalties, a low advance isn't going to cause the author any loss. The money just comes later.

A big advance seems a gamble for the publisher. Why risk it? Are they afraid another publisher will make a better offer? Or is an extra $50,000 just not that big of a percentage within the scheme of publishing costs?

I think that if there's an auction and a couple editors all one the book then the advance will go up more and more because they'll all wonder why the other editors think the book will do so well, so they'll raise their own. That'll only go so far, of course, but I bet it explains some of the larger advances out there.

jordijoy · Jun 16, 2007

Duped said:
J K Rowling is a billionaire now, but that is a best case scenario.

A girl can dream, can't she

. Or hallucinate!

newshirt · Jun 16, 2007

Jamesaritchie said:
If you mean from a large publisher, the average advance is about $7,500

So, assuming an 8% royalty, and a $7,500 advance, a first-time novel can make $93,700 gross?

And, assuming a street price of $20 per book, about 4,500 books would be printed?

(Sorry for all the reverse-engineering; I'm just curious about the economics.)

--ray

kristie911 · Jun 16, 2007

This site gives a general idea of advances and profits (for romance publishers only) but it's nice to see the figures and gives some general idea of ranges.

Show me the money

Jamesaritchie · Jun 16, 2007

Figures

raywhite said:
So, assuming an 8% royalty, and a $7,500 advance, a first-time novel can make $93,700 gross?

And, assuming a street price of $20 per book, about 4,500 books would be printed?

(Sorry for all the reverse-engineering; I'm just curious about the economics.)

--ray

In a sense, there's no such thing as average, and every book is different, as is every publisher. But your numbers are certainly in the ballpark.

Jamesaritchie · Jun 16, 2007

First

The thing is, a first novel can make $100,000,000. But this really is a case of never count you money until the books are actually sold. The huge majority of first novels earn the writer no royalties at all, and the advance is all he'll ever see. And the advance will be no larger than the number of sales marketing thinks it will make.

All a writer can do is write the book he wants to write the best way he can write it, run it up the flag pole, and see how many people salute.

newshirt · Jun 16, 2007

Jamesaritchie said:
All a writer can do is write the book he wants to write the best way he can write it, run it up the flag pole, and see how many people salute.

Yes, I totally agree. The ecomonics are geared for the professional author with numerous works and wide circulation, as they should be. The first-time writer does it for the thrill, not the money.

RLB · Jun 16, 2007

I was at the Backspace Conference this month and went to a workshop that simulated an editorial board meeting (where editors pitch books they like to the other editors, marketing reps and publisher and try to get the green light for their project). It was run by Kristin Nelson and Jeff Kleinman. Educational, but somewhat disheartening! I learned that the average print run for a first novel is about 5000. When you divide that number up by all the B&Ns and Borders alone, it's not much.

jordijoy · Jun 16, 2007

Jamesaritchie said:
The thing is, a first novel can make $100,000,000. But this really is a case of never count you money until the books are actually sold. The huge majority of first novels earn the writer no royalties at all, and the advance is all he'll ever see. And the advance will be no larger than the number of sales marketing thinks it will make.

All a writer can do is write the book he wants to write the best way he can write it, run it up the flag pole, and see how many people salute.

expertly put!!!!!!!!!!!!

newshirt · Jun 16, 2007

RLB said:
Educational, but somewhat disheartening! I learned that the average print run for a first novel is about 5000.

Yes disheartening, but the first book is just to get started, not to make money, right?

This is common in other industries as well. I'm a software developer. I can tell you it takes 5 - 10 years to break into this business. Having broken in, I'm set. But, newcomers produce some very bad products, and the industry does not receive them well.

I suppose that's the way of nature. Nature favors discipline.

Jamesaritchie · Jun 16, 2007

5,000

Trust me, that 5,000 print run is plenty, if the novel has legs. I can think of dozens of bestselling novels that began life with a tiny advance and a print run smaller than this.

Maprilynne · Jun 16, 2007

How much? Not enough.

Don Allen · Jun 16, 2007

I'm kind of surprised that no one mentioned the one aspect of a published novel that can actually pay pretty well, don't foregt the possibility of Hollywood options. More books than you can think of are under option to studios who in many cases have no intention of ever making them into a movie or are so far down the list that the studio will be gone before the movie is made. Sometimes the options are for as little as 10k per year and sometimes as much 250k (rarely) but i know of two decent authors with so-so books that are making very nice incomes with their options, and neither think their stories will ever make it to the screen...

Jamesaritchie · Jun 16, 2007

Don Allen said:
I'm kind of surprised that no one mentioned the one aspect of a published novel that can actually pay pretty well, don't foregt the possibility of Hollywood options. More books than you can think of are under option to studios who in many cases have no intention of ever making them into a movie or are so far down the list that the studio will be gone before the movie is made. Sometimes the options are for as little as 10k per year and sometimes as much 250k (rarely) but i know of two decent authors with so-so books that are making very nice incomes with their options, and neither think their stories will ever make it to the screen...

Options for not famous books are usually pitifully small. 10K isn't the low for an option, it close to the high for an average novel that isn't on the bestselling list. Most options run around $1,500-3,000.

And maybe one novel in five hundred is ever optioned at all.

Will Lavender · Jun 16, 2007

Foreign rights have been important for me. I didn't know a thing about them before my novel was sold, and now the foreign sales are a big part of why I'm going to be able to stay home and write next year.

gem1122 · Jun 16, 2007

I have no misconceptions about the reality of how much (or how little) my books may make. Seeing them in print, and making a few bucks, and knowing that people enjoy them -- these are my goals. I have no grand illusion that I'll ever make enough to fully support myself and my family from my writing.

That way, if things ever work out better than this, I'll be pleasantly surprised.

There's a great part of Jen Trynin's Everything I'm Cracked Up to Be where the singer/songwriter explains how the financial part of the music business works. She spends several pages breaking down how albums are marketed and sold, and who (lots of people!) gets paid and how much. It's painfully exact and honest, and I suppose it could easily be applied to the book industry as well.

Jamesaritchie · Jun 17, 2007

Foriegn

Will Lavender said:
Foreign rights have been important for me. I didn't know a thing about them before my novel was sold, and now the foreign sales are a big part of why I'm going to be able to stay home and write next year.

That's a good point.

Anthony Ravenscroft · Jun 17, 2007

How about this scenario, only somewhat exaggerated from normal reality.

Your book gets sold to a house. Their marketing people go great guns, & sell 1,000 copies to each&every B&N and Borders and Hastings and Books-A-Million under the sun, plus 5,000 copies to every Wal-Mart, Sam's, & Costco. Your publisher is ecstatic, takes all these advance orders, & not only prods them to order more but gets all sorts of orders from mid-tier outlets.

The house gives you $15 million. Your book rockets to the top of every list. Your next book is rushed into editing & you get pressure for #3.

Three weeks after it's released, 95% of the chain-store copies are pulled & returned. From the big-box stores, it's 98%.

If you didn't read your contract properly, you not only give up the advance on the returns but have to pay for their disposal. Then again, your agent made 20% & has no intention of giving that back to you. Your literary career is a giant smoking crater about the size of Hudson's Bay.

And you're far more likely to have this experience than that of, say, Rowling or King or Robb or Koontz or....

Irysangel · Jun 17, 2007

Anthony Ravenscroft said:
How about this scenario, only somewhat exaggerated from normal reality.

Your book gets sold to a house. Their marketing people go great guns, & sell 1,000 copies to each&every B&N and Borders and Hastings and Books-A-Million under the sun, plus 5,000 copies to every Wal-Mart, Sam's, & Costco. Your publisher is ecstatic, takes all these advance orders, & not only prods them to order more but gets all sorts of orders from mid-tier outlets.

The house gives you $15 million. Your book rockets to the top of every list. Your next book is rushed into editing & you get pressure for #3.

Three weeks after it's released, 95% of the chain-store copies are pulled & returned. From the big-box stores, it's 98%.

If you didn't read your contract properly, you not only give up the advance on the returns but have to pay for their disposal. Then again, your agent made 20% & has no intention of giving that back to you. Your literary career is a giant smoking crater about the size of Hudson's Bay.

And you're far more likely to have this experience than that of, say, Rowling or King or Robb or Koontz or....

Are you speaking from experience? I can't reallly think of any reason a heavily-hyped book would be dragged off the shelves only 3 weeks after its release, unless it belonged to Kaavya Viswanathan.

How much money do novels make?

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