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View Full Version : How exactly do advances work?



KC Sunshine
08-06-2008, 04:38 AM
Okay, this sounds dumb, but I've never understood how a book advance works. I understand that the amount is an advance against future sales, however if you get an advance of $50K and never sell enough books so the publisher can recoup that amount, do you have to give the advance back? Is it better to have a small advance or a large one?

Sorry if this question has been asked somewhere else- -I did a search and couldn't find anything.

:Shrug:

ColoradoGuy
08-06-2008, 04:51 AM
No, you don't have to give the advance back. The debate of small vs large advance is an old one. My own approach has been it's better to take a more modest advance (but still a fair one) so that you are more likely to earn out, i.e., recoup the advance through sales. That looks better to publishers for selling your next book, or so says my agent. But others say take as much as you can in the advance.

Appalachian Writer
08-06-2008, 05:15 AM
I've often wondered about advances myself. I was acquainted with an author who received a hundred thousand dollar advance. Her book, although translated into thirty different languages (or so she said) didn't exactly sell like gangbusters. After a while, I wondered what happened re: the money. Thanks ColoradoGuy for the head's up. It makes me rest easier.

ORION
08-06-2008, 06:51 AM
It really is true that the publisher puts more muscle behind a book that they had to pay some bucks for but there are other measurements of success than the NYT list- a book can build slowly- the ancillary rights can be profitable...or the book can win awards...
That being said I disagree with wanting a modest advance- the publisher has no incentive to market it- if you don't print enough copies they can't get into stores.
Besides it's really a moot point- few books get 6 figures - most get a modest advance.
I challenge you - when your book is being auctioned and the offers get higher and higher- to say gee I'll pass on the $300,000 and take $50,000?
I couldn't.

rugcat
08-06-2008, 07:24 AM
I challenge you - when your book is being auctioned and the offers get higher and higher- to say gee I'll pass on the $300,000 and take $50,000?
I couldn't.Well, I couldn't either. No one turns down money. But I agree with CG -- and a more common scenario (at least in genre, which is my field) is not the huge auction, but more do you want to take the offered 8 or 10 K advance or hold out for say, 25K?

I'm not that interested in the size of the advance. I want to write a series and build a fan base, and eventually be able to have a solid rep and enough sales to give up my day job. So what's most important to me is that I get that chance.

A decent print run is important, but in mmpb, it's easy to do a second or third printing. And if your books outperform expectations, the publisher will sign you up for more, and spend more time promoting them.

My first book earned out my modest advance in the first accounting period. So the publisher figures there's a market for more of them, and I'm now signed up for a total of four. Hopefully, by book three, readers will be going back to buy one and two as well. I haven't made a boatload of money by any means, but I'm positioned exactly where I want to be in terms of an eventual sustainable writing career.

scope
08-06-2008, 08:32 AM
KC,

Just for clarity, the advance a writer receives is not against sales (number of books sold). An advance is against future ROYALTY money due the writer from the dollar sale of books sold.

I think a writer should try and get as big an advance as possible. When publishers lay out big money they are well aware of same and will only do so if they plan a very aggressive marketing and publicity plan designed to sell lots of books and bring in lots of money.

While it's true that in most every case the balance of any advance paid to an author does not have to be paid back to the publisher, you must check your contract to verify same. I have heard of cases (don't know of any) where the author's contract stipulated that s/he was liable for any unearned advance.

KC Sunshine
08-06-2008, 08:54 AM
Thanks guys. This is all very helpful- and has definitely clarified things for me!

KC Sunshine
08-06-2008, 11:35 AM
One more question- does the agent usually take a percentage of an advance, or just royalties?

JJ Cooper
08-06-2008, 03:05 PM
An agent takes a percentage of the advance and percentage of any royalities (percentages in accordance with your contract).

Advances also may be paid at different times. For example my first payment of my advance just came through (minus agent percentage) and that was for signing with the publisher. I then get another advance amount on delivery of the first manuscript to the publisher, another amount on publishing date of first book, another amount on delivery of second book and another amount on publishing date of second book. None of that is royalities, but I still need to earn-out before receiving royalties.

And, if I don't earn-out I don't have to give the advance back.

JJ

maestrowork
08-06-2008, 06:34 PM
One more question- does the agent usually take a percentage of an advance, or just royalties?

An agent takes a percentage of everything you earn on the book rights. And since advance is earnings against future royalties (not sales), it would be silly for the agent to miss out on that cut, don't you think?

That said, it depends on the contract.

If you don't earn out, you don't have to give it back. So it's really nice to have a BIG FAT paycheck in the beginning. Cash is king.

But there's also a lot of pressure, especially for a first-time author with unproven track records. Say, if you get a $100,000 advance, and if you earn $1 on every book, that means you will have to sell 100,000 copies to earn out. If you don't earn out, or if your sell through is horrible compared to expectations, the publisher might drop you, and you may have a more difficult time selling your next book. So if you're concerned about your long-term career, a huge advance might not be a wisest choice. I've heard stories about authors who got a huge advance and a big print run but the book didn't sell, and the publisher was stuck with a large stock of remainders. That wasn't good for the author's reputation at all. It's probably better, like ColoradoGuy said, to build fanbase and momentum through actual sales and second, third printing... It looks better for you as an author. And then when you have the fan base like Stephanie Meyers or J K Rowling, you can have a print run in the millions an no one would doubt you.

Still, like others have said, the bigger the advance, the more likely the publisher will push for promotion, distribution, etc. to meet that number. These are business people. They know their math. If they pay you $100,000 in advance, they have every intention to selling more than a few hundred thousand copies. So more power to you as an author.

Again, cash is king. I wouldn't object to a 7-figure advance. Take the money and run!

James81
08-06-2008, 06:46 PM
What is a "royalty"?

Toothpaste
08-06-2008, 08:29 PM
A percentage on book sales that an author earns. So most often an author gets 10 - 12% of the sale of a book. That is her royalty. A royalty of 10%.

RoccoMom
08-06-2008, 08:35 PM
OK, so what happens if the author leaves Agent A for Agent B? Who would get the royalty percentage? Agent A or B?

James81
08-06-2008, 08:40 PM
A percentage on book sales that an author earns. So most often an author gets 10 - 12% of the sale of a book. That is her royalty. A royalty of 10%.

Isn't that the same thing as a percentage on "sales" then?

Irysangel
08-06-2008, 09:06 PM
Royalty percentage depends on the format of your book. From what I know:

Trade Paperback: usually around 7.5%
Mass Market: Anywhere from 4-8% depending on your publisher and your contract
Hardcover: 10-12%

Unless you are Nora Roberts, you will be hard pressed to find a lot of MMPB authors with a 12% royalty.

As far as the switching of agents - whoever 'sells' the book is the one that keeps the percentage. If you have Agent A and you sell 2 books and then move to Agent B, all sales with the first 2 books still go to Agent A. So if you have a book that sells like gangbusters with Agent A, even if you left them 4 years ago, they will still make money off of it.

ideagirl
08-06-2008, 09:08 PM
OK, so what happens if the author leaves Agent A for Agent B? Who would get the royalty percentage? Agent A or B?

Whoever sold the book in question. If Agent A sells your first book and Agent B sells your second, Agent A will get the royalties for the first book and Agent B will get them for the second.

ColoradoGuy
08-06-2008, 09:11 PM
Isn't that the same thing as a percentage on "sales" then?
Good contracts (the norm) use percent of the cover price: bad contracts are percent of net (or something else besides the cover price).

spike
08-06-2008, 09:16 PM
OK, so what happens if the author leaves Agent A for Agent B? Who would get the royalty percentage? Agent A or B?

Agent A gets the commission for anything that he/she respresented and sold.

Gillhoughly
08-06-2008, 10:31 PM
This info seems to be all over the place, so I'll consolidate based on my experiences. I hope I get everything right. I know this stuff but don't always remember it all in the right order!

1) Publisher "leases" the right to print your book for a set period of time. Some scam sites claim a legit house will take your rights, but only if you're silly enough to sign such a contract. This "lease" is for a set period of time (let's say 3 years) or circumstances (the sales drop off so it is not cost effective to continue and your books are remaindered).

2) The publisher gives you an advance check. For a new writer who is not being godmothered with a cover quote from Nora Roberts, expect low four figures. My first book's advance was about 1000.00 in 1988. Sadly, things have not improved much.

Show Me the Money! (http://www.brendahiatt.com/id2.html) ALWAYS assume you will get the lowest advance offered!

I had HOPED it would be along the lines of 100K because I had fallen for the stories of guys like King getting millions in advance money.

In the publishing world, he essentially won the lottery with a 200K advance for Carrie. Prior to that he'd been writing for years and making bupkis.

Such is the stuff of legends. It keeps us going, but it doesn't happen to everyone.

One of the biggest follies about writing is that you can get rich at it. I tell people I'm a writer and they think I'm rolling in the dough.

Until they see what I'm driving.

They've heard about those legendary advances, too.

The reality for the rest of us is if we are VERY lucky our first sale might get an advance of 1,500-2,000.00. If you spent a few years writing that first book it's not much of a return, but you'd be writing anyway because you can't stop yourself, so you might as well get some money for it.

If an agent represents you, she keeps 15 percent of that. The publisher sends an advance check to the agent, who will cut another check to the writer, minus the agent's 15%.

She earns it by making sure the contract is fair to your interests and reserves various rights like media and foreign sales.

She can sell your book all over again to various publishers in other countries, which is most cool.

She will have contacts in the business that you don't have in places you never heard of, so it is worth it to me to have an agent. Her sale of one of my series to a Euro house netted me enough to make a down payment on a house and afford to move in and buy furniture. It only took me 15 years to get to that point!

3) After a lag of about 18 months--and you'd better be writing and finishing your next 3-4 books during that time--your book will be released.

Do not expect huge signing parties, gala events with you hobnobbing with the literati. Unless you are the number one main writer for a house that month you will not be sent on a nationwide tour and have your name in the Times and be invited to speak on Oprah.

Most houses have their number one release, which is the book they expect will net the most profit. They put most of their ad budget behind it. The rest of the budget goes to their #2 & 3 books, and their other writers pretty much have to fend for themselves. Not all publishers do this, but that's how it was for me. A couple times they took out ads in a trade magazine with a picture of my cover on a page with 7 other covers. It's easy to get lost in the crowd.

Chances are that you've set up a signing with a local B&N, invited all your friends, and no one shows up and no one buys a copy, 'cause who the heck ARE you anyway?

Take it in stride. Be pleasant. No one likes to buy a book from a grumpy gus. Thank the store manager. Go home and write.

4) Let's say your publisher prints 3000 mass market paperbacks, selling for 7.99.

We'll say your royalty for that is 7% of the cover price. For each one sold you make .55.

You have to sell 1819 copies to earn out the 1000.00 advance the publisher gave you.

After that advance has earned out, all other sales (royalties) are totaled up and in a year or six months you get a royalty check.

The larger the advance, the more copies you have to sell to earn out.

It is not good when you don't make back your advance money. I've a couple of hardcovers (now paperback) that are still a few hundred bucks short of earning out. As the books are now "out of print" they will never earn out. (The house plans to reprint them in a 2-book omnibus, so not all hope is dead.)

As a consequence the house did not offer me a big advance on the next book in the series. It's less than half what I got on the previous books.

I wasn't happy, but took the money. I need it and I need to have my name on a book in the stores so my readers know I'm still writing!

5) Switching agents-whoever made the sale represents you for that title. They can be fired by you, but they still have the representation on that work, so be nice if you decide to let them go.

I have switched agents. My new agent reps for a series of books my old agent sold. She called him up. It wasn't worth it to him to continue trying to get money from that series so he let her take them over. I wasn't a big earner for him, but my new agent saw differently. She's the one who sold the lot to Europe, when the old agent couldn't be bothered.

My agent pays more attention to the market than I do, and thus was in a good position to get things going on several anthology deals for me, with me as the editor. I'd have never done that on my own!

My new agent (11 years I've been with her) is now with a different agency. All the writers she repped for at the old agency came with her to the new one. Our checks just have a different name on the top.

6) Cover price percentage vs Net
Good contracts (the norm) use percent of the cover price: bad contracts are percent of net (or something else besides the cover price).God but THAT is scary!

Never ever sign a contract that screws you over with payment from net profit instead of cover price percentage. Once the bean-counters are done, you won't be making anything. That's why the movie, Forrest Gump, has supposedly never made a profit.

7) Do not sign a multi-book contract where your royalties are joint-accounted.

As I understand it, it means you will not get royalty money until the last book released makes back its advance.

Which may never happen.

Book One could sell well and earn out.

Book Two might sell poorly.

Book Three could be canceled altogether based on B2's poor sales.

You can keep your advance check for them, but in every other sense you're hosed.

This happened to a friend of mine, who had to adapt 6 different pen names over the years to avoid the stigma of poor sales because her publishers did this to her.

"It only sold 4K copies," they said.

"But you only PRINTED 4K copies!" she'd tell them. "That's a 100% sell-through!" And 4K copies wasn't enough to earn out the advance.

They'd shrug and say "We can't help that, good luck with another house."

The publisher made money, but they didn't have to pay her royalties. She got a new agent (the one I'm with) and things improved. In the last three years she started getting tons of book sales. One even went to auction, but she is NOT getting 6 figure advances or her home would be paid off.

For all other questions on the business side of writing, hit the 808 section of the local library.

When you sell your writing you are a small business owner. You need to learn about contracts, clauses, how to do your taxes, all that boring stuff.

Happily, it is NOT rocket science. I was able to learn it.

It is what you DON'T know that can cost you!

maestrowork
08-07-2008, 12:19 AM
Isn't that the same thing as a percentage on "sales" then?

Depends on the contract. It could be royalties on gross or net. Obviously, "gross" is to the author's advantage. Some smaller presses may insist on "net."



OK, so what happens if the author leaves Agent A for Agent B? Who would get the royalty percentage? Agent A or B?

Agent A sold the work, so Agent A should continue to get the commission per contract, I'd think.

KC Sunshine
08-07-2008, 08:42 AM
It is what you DON'T know that can cost you!

I hear ya! I've just started to get into the business side and I'm so glad I have my agent. It really distracts you from yoru writing when there's all this contract stuff going on that you have to worry about.

RoccoMom
08-07-2008, 02:44 PM
This info seems to be all over the place, so I'll consolidate based on my experiences. I hope I get everything right. I know this stuff but don't always remember it all in the right order!

1) Publisher "leases" the right to print your book for a set period of time. Some scam sites claim a legit house will take your rights, but only if you're silly enough to sign such a contract. This "lease" is for a set period of time (let's say 3 years) or circumstances (the sales drop off so it is not cost effective to continue and your books are remaindered).

2) The publisher gives you an advance check. For a new writer who is not being godmothered with a cover quote from Nora Roberts, expect low four figures. My first book's advance was about 1000.00 in 1988. Sadly, things have not improved much.

Show Me the Money! (http://www.brendahiatt.com/id2.html) ALWAYS assume you will get the lowest advance offered!

I had HOPED it would be along the lines of 100K because I had fallen for the stories of guys like King getting millions in advance money.

In the publishing world, he essentially won the lottery with a 200K advance for Carrie. Prior to that he'd been writing for years and making bupkis.

Such is the stuff of legends. It keeps us going, but it doesn't happen to everyone.

One of the biggest follies about writing is that you can get rich at it. I tell people I'm a writer and they think I'm rolling in the dough.

Until they see what I'm driving.

They've heard about those legendary advances, too.

The reality for the rest of us is if we are VERY lucky our first sale might get an advance of 1,500-2,000.00. If you spent a few years writing that first book it's not much of a return, but you'd be writing anyway because you can't stop yourself, so you might as well get some money for it.

If an agent represents you, she keeps 15 percent of that. The publisher sends an advance check to the agent, who will cut another check to the writer, minus the agent's 15%.

She earns it by making sure the contract is fair to your interests and reserves various rights like media and foreign sales.

She can sell your book all over again to various publishers in other countries, which is most cool.

She will have contacts in the business that you don't have in places you never heard of, so it is worth it to me to have an agent. Her sale of one of my series to a Euro house netted me enough to make a down payment on a house and afford to move in and buy furniture. It only took me 15 years to get to that point!

3) After a lag of about 18 months--and you'd better be writing and finishing your next 3-4 books during that time--your book will be released.

Do not expect huge signing parties, gala events with you hobnobbing with the literati. Unless you are the number one main writer for a house that month you will not be sent on a nationwide tour and have your name in the Times and be invited to speak on Oprah.

Most houses have their number one release, which is the book they expect will net the most profit. They put most of their ad budget behind it. The rest of the budget goes to their #2 & 3 books, and their other writers pretty much have to fend for themselves. Not all publishers do this, but that's how it was for me. A couple times they took out ads in a trade magazine with a picture of my cover on a page with 7 other covers. It's easy to get lost in the crowd.

Chances are that you've set up a signing with a local B&N, invited all your friends, and no one shows up and no one buys a copy, 'cause who the heck ARE you anyway?

Take it in stride. Be pleasant. No one likes to buy a book from a grumpy gus. Thank the store manager. Go home and write.

4) Let's say your publisher prints 3000 mass market paperbacks, selling for 7.99.

We'll say your royalty for that is 7% of the cover price. For each one sold you make .55.

You have to sell 1819 copies to earn out the 1000.00 advance the publisher gave you.

After that advance has earned out, all other sales (royalties) are totaled up and in a year or six months you get a royalty check.

The larger the advance, the more copies you have to sell to earn out.

It is not good when you don't make back your advance money. I've a couple of hardcovers (now paperback) that are still a few hundred bucks short of earning out. As the books are now "out of print" they will never earn out. (The house plans to reprint them in a 2-book omnibus, so not all hope is dead.)

As a consequence the house did not offer me a big advance on the next book in the series. It's less than half what I got on the previous books.

I wasn't happy, but took the money. I need it and I need to have my name on a book in the stores so my readers know I'm still writing!

5) Switching agents-whoever made the sale represents you for that title. They can be fired by you, but they still have the representation on that work, so be nice if you decide to let them go.

I have switched agents. My new agent reps for a series of books my old agent sold. She called him up. It wasn't worth it to him to continue trying to get money from that series so he let her take them over. I wasn't a big earner for him, but my new agent saw differently. She's the one who sold the lot to Europe, when the old agent couldn't be bothered.

My agent pays more attention to the market than I do, and thus was in a good position to get things going on several anthology deals for me, with me as the editor. I'd have never done that on my own!

My new agent (11 years I've been with her) is now with a different agency. All the writers she repped for at the old agency came with her to the new one. Our checks just have a different name on the top.

6) Cover price percentage vs Net God but THAT is scary!

Never ever sign a contract that screws you over with payment from net profit instead of cover price percentage. Once the bean-counters are done, you won't be making anything. That's why the movie, Forrest Gump, has supposedly never made a profit.

7) Do not sign a multi-book contract where your royalties are joint-accounted.

As I understand it, it means you will not get royalty money until the last book released makes back its advance.

Which may never happen.

Book One could sell well and earn out.

Book Two might sell poorly.

Book Three could be canceled altogether based on B2's poor sales.

You can keep your advance check for them, but in every other sense you're hosed.

This happened to a friend of mine, who had to adapt 6 different pen names over the years to avoid the stigma of poor sales because her publishers did this to her.

"It only sold 4K copies," they said.

"But you only PRINTED 4K copies!" she'd tell them. "That's a 100% sell-through!" And 4K copies wasn't enough to earn out the advance.

They'd shrug and say "We can't help that, good luck with another house."

The publisher made money, but they didn't have to pay her royalties. She got a new agent (the one I'm with) and things improved. In the last three years she started getting tons of book sales. One even went to auction, but she is NOT getting 6 figure advances or her home would be paid off.

For all other questions on the business side of writing, hit the 808 section of the local library.

When you sell your writing you are a small business owner. You need to learn about contracts, clauses, how to do your taxes, all that boring stuff.

Happily, it is NOT rocket science. I was able to learn it.

It is what you DON'T know that can cost you!


What a great post! I'm printing this out and hanging it in my home office. Sure cleared up a lot of points I was "fuzzy" on.

While I've been writing for years, I never really sold anything of consequence to the big pubs, so I confess my ignorance of a lot of this. Thanks, Gil!

Appalachian Writer
08-07-2008, 03:23 PM
This info seems to be all over the place, so I'll consolidate based on my experiences. I hope I get everything right. I know this stuff but don't always remember it all in the right order!

1) Publisher "leases" the right to print your book for a set period of time. Some scam sites claim a legit house will take your rights, but only if you're silly enough to sign such a contract. This "lease" is for a set period of time (let's say 3 years) or circumstances (the sales drop off so it is not cost effective to continue and your books are remaindered).

2) The publisher gives you an advance check. For a new writer who is not being godmothered with a cover quote from Nora Roberts, expect low four figures. My first book's advance was about 1000.00 in 1988. Sadly, things have not improved much.

Show Me the Money! (http://www.brendahiatt.com/id2.html) ALWAYS assume you will get the lowest advance offered!

I had HOPED it would be along the lines of 100K because I had fallen for the stories of guys like King getting millions in advance money.

In the publishing world, he essentially won the lottery with a 200K advance for Carrie. Prior to that he'd been writing for years and making bupkis.

Such is the stuff of legends. It keeps us going, but it doesn't happen to everyone.

One of the biggest follies about writing is that you can get rich at it. I tell people I'm a writer and they think I'm rolling in the dough.

Until they see what I'm driving.

They've heard about those legendary advances, too.

The reality for the rest of us is if we are VERY lucky our first sale might get an advance of 1,500-2,000.00. If you spent a few years writing that first book it's not much of a return, but you'd be writing anyway because you can't stop yourself, so you might as well get some money for it.

If an agent represents you, she keeps 15 percent of that. The publisher sends an advance check to the agent, who will cut another check to the writer, minus the agent's 15%.

She earns it by making sure the contract is fair to your interests and reserves various rights like media and foreign sales.

She can sell your book all over again to various publishers in other countries, which is most cool.

She will have contacts in the business that you don't have in places you never heard of, so it is worth it to me to have an agent. Her sale of one of my series to a Euro house netted me enough to make a down payment on a house and afford to move in and buy furniture. It only took me 15 years to get to that point!

3) After a lag of about 18 months--and you'd better be writing and finishing your next 3-4 books during that time--your book will be released.

Do not expect huge signing parties, gala events with you hobnobbing with the literati. Unless you are the number one main writer for a house that month you will not be sent on a nationwide tour and have your name in the Times and be invited to speak on Oprah.

Most houses have their number one release, which is the book they expect will net the most profit. They put most of their ad budget behind it. The rest of the budget goes to their #2 & 3 books, and their other writers pretty much have to fend for themselves. Not all publishers do this, but that's how it was for me. A couple times they took out ads in a trade magazine with a picture of my cover on a page with 7 other covers. It's easy to get lost in the crowd.

Chances are that you've set up a signing with a local B&N, invited all your friends, and no one shows up and no one buys a copy, 'cause who the heck ARE you anyway?

Take it in stride. Be pleasant. No one likes to buy a book from a grumpy gus. Thank the store manager. Go home and write.

4) Let's say your publisher prints 3000 mass market paperbacks, selling for 7.99.

We'll say your royalty for that is 7% of the cover price. For each one sold you make .55.

You have to sell 1819 copies to earn out the 1000.00 advance the publisher gave you.

After that advance has earned out, all other sales (royalties) are totaled up and in a year or six months you get a royalty check.

The larger the advance, the more copies you have to sell to earn out.

It is not good when you don't make back your advance money. I've a couple of hardcovers (now paperback) that are still a few hundred bucks short of earning out. As the books are now "out of print" they will never earn out. (The house plans to reprint them in a 2-book omnibus, so not all hope is dead.)

As a consequence the house did not offer me a big advance on the next book in the series. It's less than half what I got on the previous books.

I wasn't happy, but took the money. I need it and I need to have my name on a book in the stores so my readers know I'm still writing!

5) Switching agents-whoever made the sale represents you for that title. They can be fired by you, but they still have the representation on that work, so be nice if you decide to let them go.

I have switched agents. My new agent reps for a series of books my old agent sold. She called him up. It wasn't worth it to him to continue trying to get money from that series so he let her take them over. I wasn't a big earner for him, but my new agent saw differently. She's the one who sold the lot to Europe, when the old agent couldn't be bothered.

My agent pays more attention to the market than I do, and thus was in a good position to get things going on several anthology deals for me, with me as the editor. I'd have never done that on my own!

My new agent (11 years I've been with her) is now with a different agency. All the writers she repped for at the old agency came with her to the new one. Our checks just have a different name on the top.

6) Cover price percentage vs Net God but THAT is scary!

Never ever sign a contract that screws you over with payment from net profit instead of cover price percentage. Once the bean-counters are done, you won't be making anything. That's why the movie, Forrest Gump, has supposedly never made a profit.

7) Do not sign a multi-book contract where your royalties are joint-accounted.

As I understand it, it means you will not get royalty money until the last book released makes back its advance.

Which may never happen.

Book One could sell well and earn out.

Book Two might sell poorly.

Book Three could be canceled altogether based on B2's poor sales.

You can keep your advance check for them, but in every other sense you're hosed.

This happened to a friend of mine, who had to adapt 6 different pen names over the years to avoid the stigma of poor sales because her publishers did this to her.

"It only sold 4K copies," they said.

"But you only PRINTED 4K copies!" she'd tell them. "That's a 100% sell-through!" And 4K copies wasn't enough to earn out the advance.

They'd shrug and say "We can't help that, good luck with another house."

The publisher made money, but they didn't have to pay her royalties. She got a new agent (the one I'm with) and things improved. In the last three years she started getting tons of book sales. One even went to auction, but she is NOT getting 6 figure advances or her home would be paid off.

For all other questions on the business side of writing, hit the 808 section of the local library.

When you sell your writing you are a small business owner. You need to learn about contracts, clauses, how to do your taxes, all that boring stuff.

Happily, it is NOT rocket science. I was able to learn it.

It is what you DON'T know that can cost you!

Consider yourself bookmarked. I can't thank you enough for this info. I have a wonderful beta who's agented and has a contract. She points me in the right directions, but having this in writing is a god-send!

Gillhoughly
08-07-2008, 07:16 PM
Well, thanks everyone, but PLEASE--do NOT take this as gospel.

I could be wrong on some of this!!!

Go to the 808 section and get the books on this stuff and make notes from that. The ones who wrote those books know more about it than I do!

I don't want you marching out into pro publishing world with what is essentially the Cliff Notes version from the class slacker!

That might work if you're doing a book report on Hamlet, but this is your INCOME we're talking about.

Get the straight dope from an expert who is up on current stuff. I learned all this back in the 80s!

CheshireCat
08-07-2008, 09:49 PM
Isn't that the same thing as a percentage on "sales" then?

Technically, yes, but your contract will break down the specifics of what you get on various formats and subrights: hardcover; trade; mass market; foreign-language editions; audio editions; e-book editions, large-print editions, etc. There will be a provision for books given gratis by the publisher for promotional purposes, a provision for remainders, a provision for sales on Mars (Kidding. Sort of.), and so on.

In most standard contracts, your royalty percentage increases as sales increase, but there is a standard "ceiling" that works out to about 10% in mass market and 15% in hardcover. You need considerable clout and/or very good sales to get a higher-than-standard royalty rate.


Royalty percentage depends on the format of your book. From what I know:

Trade Paperback: usually around 7.5%
Mass Market: Anywhere from 4-8% depending on your publisher and your contract
Hardcover: 10-12%

Unless you are Nora Roberts, you will be hard pressed to find a lot of MMPB authors with a 12% royalty.

Over time, particularly if you stay with the same publisher for a while, your rates can increase depending on your sales track record. As an example, hardcover contracts usually break the royalty percentage into: 10% on the first 5,000 copies sold; 12.5% of the next 5,000 copies sold; and 15% on every copy over the first 10,000 sold.

On my last contract, I got 15% of the cover price of every hardcover sold, because I have a solid track record in hardcover.

In mass market (same contract), I get 10% of the cover price of the first 750,000 copies sold, and 12.5% of every copy over that.


Well, thanks everyone, but PLEASE--do NOT take this as gospel.

I could be wrong on some of this!!!

Your information is still current, Gil. Writers still need to watch out for basket-accounting, for royalties on net sales, and for any provision that is equally unfair.

There tends to be a lot of information in contracts. My current contract runs 15 legal-size pages. The thing is, you need to read every word of every contract, and ask your agent about anything you don't understand before you sign it.

You also need to think about how you feel when it comes to "bonus" clauses/payments. Sometimes publishers try to sweeten a deal by offering you more money -- but only when certain conditions are met, such as a certain level of sales, or placement on a bestseller list, stuff like that.

The thing is, those conditions are virtually always beyond the writer's control, and while it may sound good to be able to say, "I got a half-million-dollar contract," from your publisher, if half that money is to be paid via bonus clauses, you may never see a cent of it.

I hate the things, personally, and have refused them in the past. I know some writers who've been willing to gamble. Some won. Some lost.

It's good to decide where you stand on such things before you're faced with the choice.

Irysangel
08-07-2008, 11:33 PM
Someone else also pointed out to me recently that a 'bonus' isn't really extra money. It's still a 'bonus' against advances. They're just paying it to you early.

CheshireCat
08-08-2008, 12:32 AM
Someone else also pointed out to me recently that a 'bonus' isn't really extra money. It's still a 'bonus' against advances. They're just paying it to you early.

Very true. Publishers don't "give" you any money at all; they pay you what they believe your book will earn.

That's why a P&L (Profit and Loss) sheet is worked up before a publisher makes an offer. The publisher does gamble, but only up to a point; they tend to have a pretty damned good idea of at least the minimum sales a book is likely to earn.

Not that they don't risk their money -- more with some books than others, obviously -- but they usually do what they can to minimize the chances of a financial loss.