Last week I explained (or tried to) how advances work.
This week I will try to explain the two kinds of royalties.
In general, with a very few exceptions, they boil down to this:
1) NET (sometimes called ‘publisher’s receipts’)
This means your share is a % of the amount AFTER everyone else has taken their cut. And by everyone I mean retailer/wholesaler, shipper/dist. In other words, the retail price minus about 45%. (Retailers typically get a 40% discount, or higher, when they buy books from publishers.)
2) Retail (sometimes called ‘list’)
This means your share is x % of the retail price. Say your book comes out next fall & the price is exactly $30.00. Let’s say (to keep the math simple) your royalty rate is 10%. In this example your share would be $3.00 per copy.
Does that make sense? If it does not, two examples below. In both cases, the retail price is exactly $30.00
AUTHOR A has a deal where he gets 17.5% of the net. So for each sale, his share is 2.89 (30-45%x.175)
AUTHOR B has a deal where she gets 10% of the retail. So for each sale, her share is 3.00. (30.00 x.1)
I sold my first title in early Feb 2006. Since then I have sold 23 more books, & tried to sell a bunch more.
One question that comes up time after time, every time I speak with a potential client, is $. Obviously.
People want to know how they will get rewarded for their efforts. Writing a book is not easy, as anyone who has tried can tell you.
With a few exceptions, this is how it works:
1) NO ADVANCE
In this case, you receive nothing until the book is published. Then you are paid from royalties, i.e. a set % of each copy sold. Ideally that share will be at least 10% of the retail price. Ideally these royalties are sent twice a year; sometimes just once a year.
2) ADVANCE + ROYALTIES
In this case, the publisher pays you an advance, usually in thirds. (1/3 on signing; 1/3 on acceptance of final ms; 1/3 on publication date.)
To keep the math simple, let’s say your advance is 5k. And your royalty rate is 10% of the retail price & the retail price is exactly $30.00.
AFTER THE ADVANCE HAS BEEN PAID, YOU WILL NOT GET A CENT UNLESS THE BOOK SELLS AT LEAST 1670 COPIES, NET. (net=sales minus returns.) (1670 x $3.00=$5010.)
Does that make sense? Put another way, the advance is not a gift or winning the lottery. You have to earn it back through sales.
Next week we will tackle two kinds of royalty numbers–the kind discussed here, that are derived from the retail price, & the kind a lot of publishers prefer–those derived from ‘publisher’s receipts.’