Royalties: Getting Paid

So you’re going to publish a book. Great! So what can you expect to be paid for publishing a book? No one goes into writing books for charity. This is a business, and writers have bills to pay. 

The standard royalty rate for both large and small publishers is 10 percent for the first 5,000 books, 12.5 percent for the second 5,000 books, and 15 percent thereafter. Paperback royalties are commonly paid at 7 percent. The publishing industry is still figuring out how to pay royalties on electronic publications. These can be as low as 5 percent and as high as 25 percent.

If you have an agent, they will negotiate the royalities for you. However, some publishers are looking at tweaking the model towards profit sharing (and by sharing, that means you get half of the profits). If you think you can sell many books, this might be a better route.

When you get your first royalty check, you may notice that the publisher has withheld a certain amount as a “reserve” (35 percent is common). This is to cover potential book returns from retailers. You’ll get the withheld sum with your next payment, assuming the books actually sold.

You only get paid once when a new book copy is sold. You may notice on Amazon that there is a large secondary market for used books: you get no royalties on those, as they’ve already sold once – and you’ve already been paid for those. Hooray for recycling! But boo for not getting paid.

To further complicate things, royalties aren’t calculated on the retail price (say, $30), but rather on the wholesale price, which is about 60 percent of retail. Thus for a $30 book paid at a 10 percent royalty, you won’t be paid $3, but rather $1.80. Subtract 15 percent of that if you have an agent. You’ll get paid even less for an electronic book, as it has a lower base price. Don’t be surprised if your royalty check is less than you hoped.

Publishers usually pay royalties twice per year – though some, including many university presses, only pay once per year, usually in the first quarter of the following year. It may be a challenge to keep yourself afloat financially if you have to wait so long to get paid. And given the shrinking size of advances, it’s getting tougher to make a go of it as a full-time writer. So don’t quit your day job.

A question for you: even if you never made money writing, would you still write? If all your writing did was earn just a basic minimum to cover your writing and promotional costs and you broke even, then that’s a victory in itself. This is the new “normal” for writers. No one said writing books would be easy or even lucrative.

So why publish a book if there isn’t much money in it? 

- Because your spirit calls out to write, regardless if you get paid or not. 

- Because your story can contribute to your community. 

- Because you have a story to tell.

- Because it can advance your career. Books lend credibility and subject matter expertise. 

- Because you can explore a topic in more than just a thousand words, unlike a magazine or newspaper article. You can go far deeper into a question that interests you. 

- Because you can answer a challenging societal question through your writing. 

- Because you’ve been holding onto a story and wondering if you could ever do it. Now’s your chance to prove that you can. 

Given how little authors make these days, and that most books only sell a few thousand copies, where’s the money to support authors? It isn’t in book sales, but in speaking engagements, where you get paid to speak.

Now that music downloads, Pandora and Spotify have effectively killed CD sales, how do you think rock bands make a living? It isn’t from selling CDs, obviously. Rather, they make their money going on tour and selling tickets for their concerts. The music and publishing industries offer some parallels. Most writers can’t charge tickets to speak at libraries and bookstores (with the exception of David Sedaris); however, you can get hired to deliver a presentation by a trade group. I’ve gotten better over time in asking groups if there is an honoraria – my time is worth something, as is yours. (BTW, the minimum to be considered a “professional” speaker – one who does public speaking for a living – is $2,500 per speech, plus expenses.) 

Garrett Peck

www.garrettpeck.com