We had quite the lively discussion in the comments section on Friday, and one of the results is that I slightly changed my submission guidelines. Steve Fuller pointed out that it is incredibly frustrating for authors to live and die by the query without even being able to include a single page from their manuscript. I’m definitely sympathetic to this, and I’m now asking that queriers paste five pages into the body of the e-mail after their query (but still, no attachments).
After a weekend of queries (100+, which I’m still working through), I’m here to tell you: soooo much better for me as well. Thanks very much to Steve for the suggestion. I had been worried about people sending too many attachments if I asked for sample pages, but so far so good.
Transition.
There were also some questions about how much an author receives from a book sale, so I thought I’d provide a handy dandy breakdown. This varies greatly depending on what discounts the publisher is extending to booksellers/distributors/wholesalers etc. and what royalty the author is receiving from the publisher. I’m not going to get into what is a “typical” royalty, and please don’t consider the below as such, because I can’t discuss proprietary info. But here’s a basic (and rough) rule of thumb to help with your calculations:
Start with a $24.95 hardcover.
Discounts to booksellers vary, but for a rough estimate figure that the publisher receives around 50%.
Let’s say the author has a 10% retail royalty, and the author has an agent who receives 15% of the author’s share. This works out to (again, roughly):
$12.48 to the bookseller (50%)
$9.98 to the publisher (50% minus author/agent share)
$2.12 to the author (10% of retail minus 15%)
$0.38 to the agent (15% of 10%)
For another example, let’s take a $14.95 trade paperback where the author receives 7.5% retail. That translates to:
$7.48 to the bookseller
$5.83 to the publisher
$0.95 to the author
$0.17 to the agent
So there you have it. Note that the author (and agent) do not actually receive the above money until the advance has “earned out,” meaning until all those little $0.95s per book have exceeded the amount the publisher paid as an advance. Subrights revenue, i.e. first serial (excerpts in periodicals), permissions, electronic, etc. also go towards paying down that advance.
Also note that this (thankfully) doesn’t include rights the agent/author might have reserved, such as audio rights, foreign, and dramatic rights, which can be very important in helping authors earn enough for a new couch to sit on as they frantically write their next book in the hopes of landing the money for a new coffee table.
Well, in terms of who will subsidize the (evidentally) failing publishing business – I don’t think it should be the author.
There is a demand for books.
Someone will step in to meet that demand.
And if a publisher’s business is at such jeopardy that paying the author 15% rather than 10% will cause them to go bankrupt, maybe they should sell their business to someone who can turn a profit.
Someone who would consumer test and market, for example.
I believe that New York publishing is complacent and quite happy with their power base.
I can’t wait for 3-books to shake them up a bit.
Lol. Not 3-books. E-books.
@Mira,
I have now started and aborted three responses to your last comment. I cannot find a way to respond politely beyond suggesting that you continue this conversation with a trusted financial advisor who can explain the math to you better than I’ve been able to.
Perhaps we’ll engage on some other topic at some point, one that doesn’t involve numbers, and be able to make more progress.
Dick –
okay. I’ll look forward to those future discussions. This one has been stimulating – even if we couldn’t quite find a meeting of minds.
And good luck with your writing!
Royalties:
Most hardcover books have a scaled royalty system, so the author makes 10% on the first 5,000 sold; 12.5% up to 10,000 sold, and 15% on 15,000 sold and up. In mass market, it’s common to have 8% on the first 150,000 units sold and 10% on all titles over that. (my hardcover numbers may be off because I’m not pubbed in h/c) Trade the split is 7.5% and 10% (generally.)
Meaning, there is an economies of scale that come into play. You make more money per book when you sell more books.
I have to sell five mass market books for every one hardcover that my friend sells to earn the same amount of money. But, in general, PBOs have higher print runs and you make it up in the volume.
I agree with Dick–you can’t look at the percentages as “the author is getting screwed.” Publishers want to keep their author’s happy if the author is making money for the publisher–because they don’t want the author moving to another house. Publishing is a low margin business. We can argue as to whether the industry needs fixing, but publishing is not getting rich at the expense of authors.
I wouldn’t want to be asked to put in money for cover design, shipping, copyediting, printing, sell-in, advertising, and anything else the publisher does JUST FOR MY BOOK. That’s not overhead–overhead is lights and medical benefits for editors and computer equipment. There is far more expenses that the publisher incurs to sell MY BOOK. I think that when all is said and done, except for the bestsellers–and I have no idea what the “break-even” point is on a hardcover or PBO–the publisher is making far less than the author per unit sold.
Thanks for sharing, Allison!
Always good to have a bestselling author weigh in on the breakdown.
Allison, I’m really not accusing publishers of getting rich.
By all accounts, they are barely making it. I really feel for them. I’m thinking of sending them an anonymous donation.
What I’m accusing them of is devaluing authors, and the eensy weensy percentage they pay authors reflects that.
If an author pays their agent 15%, the publisher should at least give the writer 15%.
If publishers want to make more money, I suggest they advertise.
I’ve never, not once, seen a T.V. commercial for a book.
I’ve never, not once, heard a radio commercial for a book.
I did see, once, in my entire lifetime, a billboard for a book.
How do you sell a product you don’t market?
Regardless, I believe the author deserves more of the percentage. YOU deserve more of the percentage on your books.
It’s the principle of the thing.
And with that I’ll stop.
People are probably getting tired of seeing my name on here.
I’ve said my piece, thanks for listening.
Thanks for doing this, Nathan.
But you might want a follow-up post that gives the math according to the more common price of books for kids and teens. The novel I have coming out next month retails for $18.00
And then there are the deep discount provisions for the chains…
Also, would you consider explaining the breakdown for picture books when the author does not illustrate?
It’s a shame that new writers can’t come across these realities more often, so they don’t get crushed by disappointment (and debt) when they are finally told the truth!
Thanks again for shining a light on all this!
Laurie
Thanks for this breakdown. I’m writing a paper on the shift from print to digital publishing, and needed to find a breakdown per unit on a traditional book as a primer for my audience. You even used the same example price! ($14.95) Thanks!
Great article, as always! I've cited your article and summarized your figures on my blog (www.cat-torres-v.blogspot.com), and of course also linked back to your post.
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Maybe you don't answer this — hope you do please — because I know for the comment dates this post is old but I'm kind of confused here. I calculated the exercise as you explained in all the parenthesis and the results aren't the same.
I did the calculations as following:
$24.95 Hardcopy
Gross Profit
Bookseller (50%) -> ($24.95 * 0.50 = $12.475 ~ $12.48)
Publisher (50%) -> ($24.95 * 0.50 = $12.475 ~ $12.48) from this gross profit they pay 10% to the Author -> ($12.48 * .10 = $1.25)
Author pays the Agent 15% from his gross profit ($1.25 * .15 = 0.1875 ~ $0.19)
Net Revenue
Bookseller -> $12.48
Publisher -> $11.23 –> calculated by ($12.48 – $1.25 = $11.23)
Author -> $1.06 –> calculated by ($1.25 – $0.19 = $1.06)
Agent -> $0.19
For this results I used the Significant Figures Rule.
In fact, the sum of the Net Revenue (commerce chain) it suppose to result in the same price you precised ($24.95) in this case the sum is $24.96 — creating money from nothing and I think it should exist a coin of $0.005 for this cases — but in financial procedures the results aren't equivalent because the coin I've proposed doesn't exist so someone wins and someone loses in many different ways talking about numbers and business — the Tie-Breaking Rule tells it —.
On the other hand, for me the retailer should be the bookseller because they provide books for sale to customers. The publisher should be the distributor because they find the retailers and the author have his royalty from the distributor (publisher) but after the agent get his part — like a chain —.
Am I right? If not please explain to understand better.
With all my respect, thank you.