Show Me the Money! The Financial Realities of Traditional Publishing

During a recent discussion with an aspiring author, who’d met with repeated rejection from publishers and agents, I suggested that he explore the self-publishing route. I told him how well it’s worked for me and for many of the authors I know — the majority of the writers I’m friendly with are self-published — but the idea was firmly rejected because he believed that independent authorship wasn’t where “the real money” was.

It would have been easy to name several indie authors who are making an enviable living off their book sales, but I decided to dive down the rabbit hole of trad-pub author finances instead. Not like I had anything better to do that day…

What follows is the result of some quick-and-dirty research and number crunching, so take what you’re about to read with a generous grain of salt. I checked multiple sources, which of course all had slightly different data to report, and went with what seemed to be the most common figures or, failing that, an average of the averages, so I wouldn’t regard any of these numbers as authoritative.

Also, I’m not great at math. I became a writer to avoid math.

However, in my defense, the numbers support something career authors and all-around good guys James A. Moore and Christopher Golden said once during one of their roaming author coffeehouses: a tiny, tiny percentage of trad-pubbed authors make a living solely off their book sales — maybe three percent of such authors, with an emphasis on the “maybe.”

Suffice it to say, traditional publishing is not necessarily where the “real money” is.

One important caveat before I get into it: the overall point of this analysis is not to deter anyone from pursuing traditional publishing. This is strictly an examination of the earnings potential, so aspiring authors can pursue that path with their eyes open and expectations reasonable.

First, let’s start with the advance, which is typical when selling a novel to a major publisher. The average advance from a big publishing house is $10,000, which is a nice chunk of change, right?

Except that chunk is going to get smaller if you have an agent — which, if you’re getting a five-figure advance, is likely. An agent’s cut is typically 15 percent, so right off the bat your advance just shrank to $8,500.

After Uncle Sam takes his cut, which would be 10 percent on $10,000, your advance is now down to $7,650 — and I say that assuming the taxes are collected on the advance alone. If that amount pushes your overall income into a higher bracket, say goodbye to a larger piece of the advance.

But hey, $7,650 is still a pretty sweet payday — and the good news is, that money is all yours to keep. The advance is essentially the publisher paying you in anticipation of recouping that money through future book sales (more on that later), and if your book happens to tank? Not your problem anymore; the publisher took a chance on you and it didn’t pay off for them, but they’re not going to ask you for their money back.

Of course, the chances of the publisher asking you to write another book for them would be slim to none, but one hurdle at a time, yes?

The bad news (part one) is that you’re not necessarily getting that entire advance in one payment. Many publishers dole it out in phases as you meet certain milestones, like signing your contract and turning in your finished manuscript, so dismiss the idea that you can give up your day job and live off your advance while you finish your book.

The bad news (part two): the advance will be the only money you see for a while. Royalties — your cut of the book sales — don’t kick in until the advance has been “earned out,” meaning that the advance has been recouped by the publisher through sales.

(Told you I’d get back to that.)

How long does it take a book to earn its advance back? Nine months on average — less if your book really takes off, but if you’re not a runaway success right out of the gate, it might take a year or more before you start seeing royalties.

Now let’s talk about royalties, shall we? This is when you start making the big bucks, right?

Short answer: probably not.

Royalties are a percentage of the sales as determined by three main factors: the book’s retail price, how many copies have been sold, and format. Here’s the basic breakdown:

  • Hardcover books: 10 percent of the retail price for the first 5,000 copies sold, 12.5 percent of the retail price for the next 5,000 copies sold, 15 percent of the retail price for every copy sold after the first 10,000
  • Paperback (trade or mass market) books: 8 percent of the retail price for the first 150,000 copies sold, 10 percent of the retail price for every copy sold after the first 150,000
  • Ebooks: 25 percent of the retail price

Quick aside: in the above examples, “retail price” assumes that the books are being sold at full cover price. Publishers are increasingly basing royalties not on the full listed retail price (“list royalties”) but on how much the book actually sold for (“net royalties”), so if your book goes on sale or ends up in the bargain bin, your royalties adjust accordingly.

The average retail prices for hardcover, trade paperback, mass market paperback, and ebook formats are, respectively, $25.99, $15.99, $8.99, and $12.99. Using those figures, the first tier of royalty payments for each format you’d receive, again respectively, are $2.59, $1.28, $.72, and $3.25.

That sounds like it could add up — and it could, if you happen to be wildly successful. To be fair, you could indeed be that one in a million author who hits it big, but you’re more likely to be an average author, so we’re going to base your income off your averageness.

And how many books does an average author sell? The range is 3,000 on the low end to 10,000 on the high end, and it’s important to note that that is over the course of the book’s lifetime — not weekly, not monthly, not annually, but from the day it drops to the day its publisher decides it’s not worth printing anymore.

For argument’s sake, let’s assume you’re on the high end of that scale, which means 10,000 hardcover copies sold will earn you $29,200, 10,000 paperbacks will earn you $20,000, and 10,000 ebooks will earn you $32,500.

Reminder: these figures do not factor in your advance, your agent’s fee, or taxes. A $10,000 advance alone chops these numbers down by one-third to one-half.

In any event, don’t count on this money as steady income like a weekly paycheck. Depending on the publisher and the contract you’ve signed, you would get your money at best on a quarterly basis, at worst annually.

Of course, an author’s book sales are a mix of hardcovers, paperbacks, and ebooks. It was tough to pin down solid figures, but as best as I could determine, 81 percent of all book sales are print and 19 percent are ebooks — and I know this seems counterintuitive to many indie authors who derive most of their income through ebooks sales (I know I do), but print still dominates the marketplace overall.

So, if we apply those numbers to an individual author and their 10,000 copies, a single novel would earn over its lifetime $46,027 — which is the gross income. That drops to $36,027 after the advance is taken out, $30,623 after the agent’s commission is taken out, and $27,561 once taxes are taken out.

I couldn’t find hard data on what an average book’s “lifetime” is, but I found several sources that indicated a typical novel sells 250 copies in its first year — and that average apparently factors in authors ranging from self-published nobodies up to mega-bestselling authors like Stephen King and J.K. Rowling.

That means if you want to reach that 10,000-book benchmark, your book would have to consistently sell at least 250 copies a year for 40 years — and for the sake of this example, we’ll assume that your book doesn’t see a drop-off in sales after its first year (which, in real life, it would).

And so, after your advance pays out in the months after the novel’s release, your annual royalty earnings come out to — drumroll please…

$889.06.

“Real money.”

As I said earlier, I’m not looking to dissuade anyone from traditional publishing, but if that’s your goal, money probably shouldn’t be your primary motivation. The trad-pub route comes with its own benefits, including the possibility of becoming the Next Big Thing, but getting picked up by one of the Big Five publishers is by no means a guarantee of mega-success, or even a reliable revenue stream that would allow you to ditch your day job and become a full-time author.

Weekly Update – November 26, 2019

Thanksgiving is two days away, and immediately after that, the holiday shopping season kicks into high gear. Well, who am I to not engage in crass commercialism?

That’s right, the Kindle editions of the first books in the Action Figures and Adventures of Strongarm & Lightfoot series and the Well-Behaved Women trilogy will be on sale for 99 cents beginning on Black Friday and through Cyber Monday! Remember, you can buy any of these books now as a gift and schedule them to be delivered to the recipient on Christmas Day (or any date you choose).

I’m also participating in a cross-promotional effort with the Superhero Fiction Authors group, so go here to check out other superhero novels that will be on sale during this period.

But wait, there’s more! I’m also part of a cross-promotional effort with the New England Speculative Writers group, so here are even more great books on sale for 99 cents!

Hey, speaking of the superhero fiction group I belong to, we’re holding a cover art contest. Nothing major, mostly a fun thing to direct traffic to the site (and our books), but the cover of Action Figures – Issue Eight: Crawling From the Wreckage, created by Patricia Lupien, is in the running, so if you’re of a mind, go show my awesome cover artist some love!

WRITING PROJECTS

The Action Figures Omnibus – Volume One: Awaiting editing.

Action Figures – Issue Nine: Hell Hath No Fury: Beat reader feedback is coming in, and the cover art is almost done.

The Adventures of Strongarm & Lightfoot – Sworded Affairs: Third draft is finished and it’s almost ready for editing.

The Adventures of Strongarm & Lightfoot – Assassins Brawl: Recording of the audiobook edition is done and it’s now in final processing!

APPEARANCES & EVENTS

  • Arisia 2020 – January 17 – 20, Westin Boston Waterfront Hotel. I am confirmed as a vendor for next year! Now I’m waiting to hear about any panel assignments.

The New England Speculative Writers group has a new preview book for newsletter subscribers. Pick it up and read the opening chapters to Well-Behaved Women – Awakening and other stories.

If you’d like to make sure you don’t miss any news from me, remember that I have a weekly newsletter that features some of the stuff you see posted here plus new, newsletter-exclusive material. Click this link to sign up.

Weekly Update – November 19, 2019

Next week, the Kindle editions of all three first books in my three series — Action Figures, The Adventures of Strongarm & Lightfoot, and Well-Behaved Women — will go on sale for 99 cents!

Action Figures and Well-Behaved Women will also be part of cross-promotional efforts with several other authors, and I’ll have more info on those next week!

On another note, mostly of interest to other indie authors…

Earlier this year, I was invited to participate in a multi-author event, but I declined due to what I regarded as an exorbitantly high table fee — $125, which got me a table for four hours of a first-year, one day, eight-hour show. For context: Arisia charges $120 for a table for its entire four-day weekend (early Friday evening through early Monday afternoon).

I later learned that the table fee was greatly slashed to, according to one author who attended, $45 — still for only a four-hour block. I also learned from a number of attending authors, that wasn’t enough of a reduction to make the show profitable. One person said they made their table fee back, others said they ran at a loss — but they “had fun,” “got to network with other writers,” and “got some decent exposure,” so it was all good, they said.

Excuse me a minute while I set up my soapbox…

If you’re an author with designs on making a career of your writing, full- or part-time, you have to adopt a businessperson’s mindset, which means you have to always consider the dollars and cents of doing an event at which you’re allowed to sell books.

Basic rule of thumb: if you don’t make a profit, or at the very least break even on your expenses, the show is not successful.

Quick aside: in business there is something called a “loss leader,” which is typically a product sold at a loss for the express purpose of attracting customers. This is an established and, under the right circumstances, viable approach to lining up future sales.

The problem I often see is when authors who take a bath at an event brush it off, claiming that they got good exposure and a lot of people said they’d buy the book online at a later date.

Here’s the problem: people say a lot of stuff they don’t mean, especially at conventions and fairs at which people sell their wares. “I’ll be back later” is one of the greatest customer lies in the convention scene. It’s code for, “I’m not going to buy anything but I don’t want to say so to your face, so here’s some false hope for you.”

As for authors who do see an online sales spike after an event, claiming cause and effect strikes me as wishful thinking. Sure, an increase in sales via Amazon (or whoever) following an event could be directly connected (in effect, the aforementioned loss leader). It could also very well be coincidence, and it’s damn near impossible to prove which scenario is true.

In any case, it still doesn’t make the show profitable or break-even. You didn’t meet or exceed the cost of being there, ergo the show was not successful.

Now, having said all that, I know authors who do shows fully expecting to walk out in the red — authors who have some other reason to be there, usually. They’re on panels or doing readings or conducting workshops — things that are much better loss leaders than standing at a table in the vendors’ area. There’s active engagement with potential customers who will learn something about the authors and what they have to offer.

If your goal is to have fun and network, go to events as a patron, but if you’re there as a businessperson, do your research to determine whether a given event is likely to yield positive financial results. Don’t enrich someone else at your own literal expense.

WRITING PROJECTS

The Action Figures Omnibus – Volume One: Awaiting editing.

Action Figures – Issue Nine: Hell Hath No Fury: Draft two in review with beta readers.

The Adventures of Strongarm & Lightfoot – Sworded Affairs: Third draft is almost finished!

The Adventures of Strongarm & Lightfoot – Assassins Brawl: Recording of the audiobook continues.

APPEARANCES & EVENTS

  • Arisia 2020 – January 17 – 20, Westin Boston Waterfront Hotel. I am confirmed as a vendor for next year. Now I’m waiting to hear about any panel assignments.

The New England Speculative Writers group has a new preview book for newsletter subscribers. Pick it up and read the opening chapters to Well-Behaved Women – Awakening and other stories.

If you’d like to make sure you don’t miss any news from me, remember that I have a weekly newsletter that features some of the stuff you see posted here plus new, newsletter-exclusive material. Click this link to sign up.

Weekly Update – November 12, 2019

Not much to report, because The Big Move to Oxford took up all of my weekend, and then some. I’m working on getting the new writing space in order.

WRITING PROJECTS

The Action Figures Omnibus – Volume One: Second pass is finished, and now this one goes on the back burner for a while so I can focus on other things.

Action Figures – Issue Nine: Hell Hath No Fury: Draft two in review with beta readers.

The Adventures of Strongarm & Lightfoot – Sworded Affairs: Third draft has begun!

The Adventures of Strongarm & Lightfoot – Assassins Brawl: Recording of the audiobook continues.

APPEARANCES & EVENTS

  • Arisia 2020 – January 17 – 20, Westin Boston Waterfront Hotel. I am confirmed as a vendor for next year! Now I’m waiting to hear about any panel assignments.

The New England Speculative Writers group has a new preview book for newsletter subscribers. Pick it up and read the opening chapters to Well-Behaved Women – Awakening and other stories.

If you’d like to make sure you don’t miss any news from me, remember that I have a weekly newsletter that features some of the stuff you see posted here plus new, newsletter-exclusive material. Click this link to sign up.

Weekly Update – November 5, 2019

It’s been a hectic week or two due to our Big Move to Oxford. We closed on the house last week and started moving stuff over right away. I also started setting up what will become my writing office! This weekend is The Big Move, when we haul over all the major furniture, at which point the moving part will be complete and we can get down to setting up the house.

 

WRITING PROJECTS

The Action Figures Omnibus – Volume One: Second pass continues.

Action Figures – Issue Nine: Hell Hath No Fury: Draft two in review with beta readers.

The Adventures of Strongarm & Lightfoot – Sworded Affairs: The beta readers have spoken, but I’ve yet to sift through their notes due to the move.

The Adventures of Strongarm & Lightfoot – Assassins Brawl: Recording of the audiobook continues.

APPEARANCES & EVENTS

  • Arisia 2020 – January 17 – 20, Westin Boston Waterfront Hotel. I am confirmed as a vendor for next year! Now I’m waiting to hear about any panel assignments.

The New England Speculative Writers group has a new preview book for newsletter subscribers. Pick it up and read the opening chapters to Well-Behaved Women – Awakening and other stories.

If you’d like to make sure you don’t miss any news from me, remember that I have a weekly newsletter that features some of the stuff you see posted here plus new, newsletter-exclusive material. Click this link to sign up.

Weekly Update – October 29, 2019

Today’s the last day for the cross-promotional effort spearheaded by Emerald Dodge, which features Well-Behaved Women – Awakening. You can go here to check it out and maybe find some new reading material!

WRITING PROJECTS

The Action Figures Omnibus – Volume One: My second pass is almost done, and then it’ll go off to my editor for a quick once-over.

Action Figures – Issue Nine: Hell Hath No Fury: Draft two in review with beta readers.

The Adventures of Strongarm & Lightfoot – Sworded Affairs: Second draft is with my beta readers.

The Adventures of Strongarm & Lightfoot – Assassins Brawl: Recording of the audiobook version is underway.

APPEARANCES & EVENTS

  • Arisia 2020 – January 17 – 20, Westin Boston Waterfront Hotel. I am confirmed as a vendor for next year! Now I’m waiting to hear about any panel assignments.

The New England Speculative Writers group has a new preview book for newsletter subscribers. Pick it up and read the opening chapters to Well-Behaved Women – Awakening and other stories.

If you’d like to make sure you don’t miss any news from me, remember that I have a weekly newsletter that features some of the stuff you see posted here plus new, newsletter-exclusive material. Click this link to sign up.

Weekly Update – October 22, 2019

First, Well-Behaved Women – Awakening is part of a new cross-promotional effort spearheaded by Emerald Dodge that begins on Thursday and runs through October 29. You can go here to check it out and maybe find some new reading material!

Speaking of Well-Behaved Women, the audiobook version of Endtimes is now available! That makes all three books available in print, Kindle, and audio formats — the first time I can make such a claim for one of my series!

WRITING PROJECTS

The Action Figures Omnibus – Volume One: Wait, what’s this? Well, the first three Action Figures novels have been out for a while now — they were released in 2013 and 2014 — and I’m planning to release Secret Origins, Black Magic Women, and Pasts Imperfect as a collection, complete with revised text and a new cover! Look for that sometime in 2020!

Action Figures – Issue Nine: Hell Hath No Fury: Draft two in review with beta readers.

The Adventures of Strongarm & Lightfoot – Sworded Affairs: Second draft is with my beta readers.

The Adventures of Strongarm & Lightfoot – Assassins Brawl: Recording of the audiobook version is underway.

APPEARANCES & EVENTS

  • Arisia 2020 – January 17 – 20, Westin Boston Waterfront Hotel

The New England Speculative Writers group has a new preview book for newsletter subscribers. Pick it up and read the opening chapters to Well-Behaved Women – Awakening and other stories.

If you’d like to make sure you don’t miss any news from me, remember that I have a weekly newsletter that features some of the stuff you see posted here plus new, newsletter-exclusive material. Click this link to sign up.