How authors get paid

hi I'm John Gilstrap author the Jonathan grave thriller series back again with another peek inside a writer's life and the publishing industry today what I want to talk about is how do writers get paid how do I get paid it has a practical matter we make our living off of royalties of the books that we sell in the traditional publishing model which is not to be confused with the self-publishing model those royalties whatever the percentage is it's always tied to cover price whatever those royalties are or negotiated amounts that's what the the negotiation between the agent and the editor is all about in the early stages but as a practical matter you can't collect royalties until there have been sales and if you consider that there's always a lag time if I sell a new book if I finish a book and I and I sell it to a publisher today it won't be out for at least a year so what publishers will offer to the authors are advances against royalties you hear about these in the news so-and-so justify signed a hundred thousand dollar advance for a three-book deal with publisher X well what that advance is designed to do is to give some working capital to the writer during the time that he's producing that manuscript or a future manuscript it's money that you can spend today but it's against the royalties that you will collect in a year or two years or whenever the royalty checks start coming in or don't start coming in if the book does not sell well and the royalties in fact never earn out the advance that's the term to earn out the advance well the writer still gets to keep that advance it doesn't have to give that money back so the publisher is taking all of the risk in in that circumstance so here's how advances actually work let's say and these again are all negotiated numbers these are not industry norms I have no idea what industry norms are but just for illustrative purposes and to keep the math simple here's how it works let's say that author Jones signs $100,000 three book deal that would make the new $100,000 is really a good-sized advance in in this day and age unless you wanted the superstar authors in which case you're probably not watching this but when you hear that it's a hundred thousand dollar advance for three books what it really is is 33333 dollars three times or some breakdown of that amount it's not a hundred thousand dollars per book it's a hundred thousand dollars split over three books so the way that would be paid assuming that you know again these are all negotiated we're going to keep it simple let's say that the terms of the contract or that the author will get 50 percent 5o percent of the advance upon signing and then the other 50 percent on DNA delivery and acceptance of the manuscript so on the first day when they signed the contract that author would get 50 percent of each of the three books thirty three thousand thirty three hundred thirty three dollars right so the the author will get fifty thousand dollars for on that day and that keeps him going when he submits that manuscript for the first book he'll make another sixteen thousand six hundred and sixty six dollars which would be the other half of the advance for the first book but they will still him and then when he submits the second manuscript a year from now or two years from now he gets another sixteen 666 and like that until you've earned out the entire hundred thousand dollars minus the Commission's for the for the agent now a little bit it used to be that writers got much bigger advances the big-name writers got much bigger advances than they do today um and when I first started in this twenty years ago the metrics were you should the the bigger if the advance the more dedicated the publisher would be to making sure that your book would be successful because they've got more more money at stake and there are some truth to that however if you get if a writer gets a big advance and the book does not live up to expectations in other words let's say in the model we just set up we paid the writer 33333 dollars for that first book and again for simplicity sake let's say that he earns a $1 royalty for every book that is sold well and the reality is it's a little bit more than a dollar for hard coverage little less than a dollar for paperbacks mass-market paperbacks but it's it's it's a good number to work with so if he gets $1 per book as a royalty he will have to sell 33333 books before he gets another dime in royalties because all of those royalties on actual sales go to earn out his advance so if he doesn't do that if he only sells 20,000 copies well it's the publisher that's out the 13 grand on on on that book and nobody likes to be burned they really don't like to be burnt and what will happen on the bookstore level is in anticipation of a big book from publisher X the bookstores will order in large numbers well bookstores get to return unsold books for a full credit but it still costs them money because shelf space is money and there's it's kind of a complex metric but if book one under sells by 13,000 copies well the book stores are going to order fewer books on the second book and now the publisher is going to lose more money so when you're calculating when you start dreaming about having a big advance think of the downside if if that advance had been for ten thousand dollars for one book the author would have made five thousand dollars on signing and then he would have to sell he'd get another five thousand one on submission and manuscript for a total of ten and have had to sell 10,000 copies in order to earn out and everybody in the food chain will be happy so the whole business of big advance versus little advance there are a lot of moving parts in here and I know a number of authors who've gotten themselves caught in the crack by insisting on an advance that was that way outstripped their ability to earn out and it can be very career damaging so that's when an advance is it's sort of like a draw if you're in sales but you never have to owe it back the only way you ever Owen advanced back is if you accept the money and then you don't submit a publishable manuscript and there have been some cases there where the the miscalculation was so bad that as a practical matter from the publishers point of view the author couldn't possibly submit a publishable manuscript and then he ends up being let go and according to contract language he may or may not go that advance money back alright so that's a little bit of peek into the money side of things please keep reading you all take care of yourselves I'm John Gill strap

22 thoughts on “How authors get paid

  1. Thank you so much 😊. As a budding author myself, I appreciate a more established author explaining some of the more hidden details of this self-employed industry.

  2. In New Zealand, very seldom a book will sell for less than $25.00. So if the Author gets One dollar per copy where does the $24.00 (or more) go?
    I always thought an Author earns a much greater percentage on book sales.

  3. This information has a lot to learn from. A good book cover can also drive potential reader to want to pick up the book at first glance. If you need help with designing an eye-catching book cover design, here is your guy👉

  4. I found your video very helpful. I've decided after taking a leap into self-publishing into traditional publishing. Since, I have a self-published novel on Amazon would the publishing house work on getting my novel into the same amazon's author profile?

  5. Hey John, I've found your talk to be very useful. I'm coming to US for a three years contract with a university and meanwhile, I want to get my maiden fiction published. It's going to be a fantasy thriller and I am very much optimistic about its success. What I want to know is….can I directly contact with the big publishers or I need agent? What is the standard percentage of royalty in USA? And how much advance I may claim ? I wrote stories which got published in newspapers but this is going to be my first complete book, a fantasy based fiction! You know even Stephenie Meyer got a huge amount of money for her maiden book. Please be gracious enough to respond .

  6. Q, is it normal to pay a publishing company to publish your book with the promise to pay that money back before they start to take there percentage of the sales.

  7. Good information. I thought this was how it must work. It is good to hear from someone who knows how it works.

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