Some people were shocked a few years back by Lynn Viehl’s very revealing and incredibly generous post about how she only earned $24,517.36 after taxes and commission on her mass market NY Times Bestseller TWILIGHT FALL. In the post she also estimated the publisher’s gross at $450,000 and guessed the net profit to be something around $250,000.
This raised some eyebrows. How could publishers make so much and the author earn so little?
Well, my math is a little different. According to Amazon the list price of TWILIGHT FALL is $7.99. Discounts to booksellers vary and that’s not information others are always privy to, but since this is a rough sketch let’s just say they’re 50% across the board. For the purposes of this post that means that for every net copy sold (i.e. actually sold to consumers) the publisher receives around $4.00 and the bookseller receives $4.00.
Unit costs (i.e. producing the actual book) also varies anywhere from $0.75 to $3.00 depending on the format, quantity of the print run, etc. Since this is mass market let’s say that unit cost including shipping and warehousing is around $1.50 per book. Again, just a very very rough guess.
So we’re down to $2.50 per copy for the publisher. Lynn says net sales so far are 61,663, so according to the napkin the publisher is around $154,157.50
Lynn says she received a $50,000 advance, so the publisher stands at (approximately) $104,157.50 on the title.
Pretty good! This is a bestseller after all.
But you have to deduct all marketing costs (ads, sending out copies for review, bound galleys/ARCs if any, co-op), other production costs (cover, seasonal catalog, etc.), and overhead (salaries, health insurance, rent, etc.) before you get to the profit.
How much does all the rest of that cost? I don’t know, I’m not a publisher. But it all adds up to a pretty good chunk. And let’s not forget that historically most books don’t earn a profit and those have to be paid for as well.
At the end of the day, on all books that turn out profitable the publisher is going to earn more of the profit than the author barring a revenue share type of model where the author isn’t paid up front. After all, they put up the advance and the production costs, and the risk on any given book is exclusively theirs. While of course a book not selling can hurt an author’s career, they don’t have to pay back the advance or the amount the publisher lost.
But publishers aren’t exactly raking it in either.
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Art: The Moneylender and his Wife (detail) by Quinten Massijs
Last week, Lynn Viehl’s story was mentioned on BoingBoing and Cory Doctorow chimed in, mentioning that successful authors can make money as speakers. Lynn Viehl has also published 44 books to date. Interesting stuff.
"It isn't taxes on $50k, it is taxes on $42,500 after your 15% agent fee."
that's not right, is it? The publisher is paying the author, not the agent, so the author has to pay taxes on the whole advance. The agent is paid by the author.
Well, Cory Doctorow can earn speaker's fees, but that's out of reach for a lot of authors.
I wold say Lynn is EXTREMELY successful! She ain't sloggin outta bed to some dayjob every morning! She has no commute with the expenses that entails. Gimme a break! 1 book a year is like a part time job. The woman is rich!
Nathan,
I think Cory Doctorow was referring to New York Times Best-Selling authors, saying that they could earn speaker fees. Even some small press authors earn speaker fees. Is it possible to be a New York Times Best-Selling author and not able to earn speaker fees?
Then again, how many fiction writers are good speakers?
I think that's why most of us write. 🙂
Marilyn,
The key with earning speaker fees, no matter who you are, is to get someone to pay you money in return for you speaking in person at their event.
marilyn-
I think it's easier for nonfiction authors than for novelists. There are definitely some novelists that can command an audience, but, of course, the authors who most need to supplement their income via ancillary methods are the ones for whom this isn't really an option.
LOL anon 3:57
It's not a scam. You can do it, too. All you need to do is write a novel and sell if for $50K. Easy as pie, right!
I do speaking gigs, totally unrelated to fiction, per se. I do realistic character and history interpretations of pirates in period costume. My best honorarium to date was $200 for two hours including commute, and a free gourmet lunch at the garden club luncheon. I average $100 per gig, though, when I can get 'em.
Arrrrrrr, me hearties, fine grog, fine wenches!
Okay Terry, I wanna get me some Alpha Romeo now. Forget Juan. I want a hottie Italian loaded automachine, kind of like an Expresso bookmaker, but something that works with a key, not a remote starter.
(Marsha, I'm a few ahead of you by now I think, but we're on for a few laps around the pool. Our husbands can serve time as the poolboys and serve us toddies when we come up for air.)
Please, please, Mira, hire me!
All, Happy Thanksgiving.
I love writers and their people
(even if their clothes could use some Twilight.)
Though Amazon is certainly the primary selling outlet and measure of success for most authors, let’s also consider the earning potential from back-of-room sales from giving lectures, seminars, or as in my case, stand-up comedy and a one-woman show. Those are book sales that aren’t reflected in the Amazon figures
Also brickm & mortal store sales. Those are good too if you can get 'em.
Nathan,
I see what you mean. I guess writers usually need to reach a certain level of success and income before being able to command a speaking fee. Good thing most writers just concentrate on the writing itself rather than expecting money to flow their way when they start out.
Though Amazon is certainly the primary selling outlet and measure of success for most authors,
No it's not.
Brick and mortar sales are the primary selling outlet for commercially published authors. Royalty checks are the measure of success for those same authors.
Amazon collectively makes huge sales across all titles, but on a title by title basis, regular stores average better than 80% of novel sales.
"on a title by title basis, regular stores average better than 80% of novel sales."
Prove it! I falt out don't believe this one bit. On a "title by title" basis, most "titles" aren't even in physical stores! So this cannot be true.
Even among titles that are in the B&M stores, many of them still sell more online than in the physcial stores.
Anon @ 4:05 PM –
Avast, that is AWESOME!! Arrrrrr… (Unfortunately, my pirate lingo is very limited.)
can we get an authoratative breakdown with reference link that states the releative source of book sale, please? Particularly Online sales vs. physical sales.
Not just for bestsellers which have the advantage besides bookstores of being in supermarkets, airports and big boxes, but of regular midlist novels, too.
WHERE are the sales being made if you're not a megalister with WalMart shelfage?
Does anyone in the industry even know?! Perhaps the real $ in publishing is establishing a system by which this data can be collected?!
This is just a guess, but I'd venture to guess that unless your name is Patterson or Rowling, King, Meyer, McCarthy, etc, the bulk of sales are coming from online, meaning Amazon + B&N.com + individual websites from authors, publishers and other retailers.
I, too, would like to see exact percentages.
Thanks for such a fascinating discussion today. Happy Thanksgiving!!
What with the internet, bathrobes, and computers, why would writers need to leave our homes.
It's scccaaaaarrrrryyyyy out there.
Prove it! I falt out don't believe this one bit. On a "title by title" basis, most "titles" aren't even in physical stores! So this cannot be true.
No, most self-published titles aren't in stores. Commercial titles definitely are. The reason they are is because they're selling from those shelves with frequency to warrant a store ordering them.
Most people don't have the means to read digital copies yet, but they will snag a copy of a best seller or romance from a shelf at Wal-mart when they dash in to pick up the baby's diapers.
Average sales of books available in print and e-format simultaneously top out at 10% on the e-book side.
Look, without trying to be unPC, my mother and my hairdresser are probably never (ever) going to go e-book.
But a bazillion other adventurous folks will.
(which is not to say my mother is my hairdresser)
(okay, maybe…)
(did you know, bangs are back in fashion?)
"The reason they are is because they're selling from those shelves with frequency to warrant a store ordering them."
Um, that's like saying the ones in stock are selling!
Where'ss the proof! Where's the cold hard stats from a reputable source? Hm?
Anon 4:11 – I like the Alpha vs. Alfa. Hmmm. Good.
And then there's the Testarossa…
Don't tempt me.
Alpha was bad enough
Shelf space is premium property. If a book is on a store shelf, it's either selling or it's on its way back to the warehouse.
If the title has been in stock for weeks, it's because the books have sold out and been re-ordered. (With the exception of classics, which many stores keep behind the counter now when they're on the immediate reading list for schools. Again, because they need the display space for new books that are moving.)
There's also a hybrid of sorts. Many books are site to store purchases where people order online and then go to the store and pick them up.
Sales numbers for Barnes and Noble 2008: $4.52 billion
Sales numbers for Barnes and Noble.com 2008: $466 million
Roughly 90% sold in store, 10% online.
you have to deduct all marketing costs (ads, sending out copies for review, bound galleys/ARCs if any, co-op), other production costs (cover, seasonal catalog, etc.), and overhead (salaries, health insurance, rent, etc.) before you get to the profit.
But you can't attribute all those costs to the individual books. They're eaten up in overhead costs, spread out against all the books the publisher brings out (the bestsellers and all the rest!)and you have to offset them against the tax credits of the cost of doing business. For the marketing ads, for instance–Lynn's books may appear with five or six other books Penguin is promoting at the same time. So that cost is amortized against all of them, not just hers.
Why in the world was my comment deleted for providing a constructive, non-threatening perspective on a self-published profit breakdown?
Where are the supporting links to authoratative sources? I'm looking for the real facts, not opinions. We all have opinions on these blogs.
I want to see the numbers from Publisher's marketplace or somewhere like that.
Sales online vs. physical stores, 2008.
"Online" also inlcudes, besides physcial books, e-books of all formats including eReaders, pdfs, etc. Because you can't get those in a physical store. It also includes audio books, but you can get those in a real store, too.
I'm thinking that overall book sales are greater for online, but that's because it includes the entire back catalogs of books that the physical stores no longer carry except by special order, because they only have room for the current crop of bestsellers or hopefuls,rising stars, whatever.
So I think maybe for current books, more might be bought in physical stores (paper ones that is–although I'm not even certain about that), but that overall it would seem online sells more volume because they can sell every book in existence ever.
From Reuters: (I don't know how to make a link, but you can cut and paste.)
https://www.reuters.com/article/pressRelease/idUS123534+19-Mar-2009+BW20090319
Barnes & Noble store sales were $4,525 million for the full year.
Barnes & Noble.com sales were $466 million forthe full year.
So… rougly 90% in store, and 10% online.
Whoops! It wasn't deleted, I just missed it.
Whatever the sales are like now, I think it's clear that going forward, if you're an author you want to learn how to dominate online sales and maximize your online presence, because in the near future online sales will absolutely overshadow physical.
The convenience factor is just too high. Maybe bums and people with no mailing addreses will shop phnyscial, if they don't go to the library instead, that is, because they can pay cash since they have no credit card and get free samples at the coffee shop and get of the rain for a few hours, but most book buyers will be online, away from the crowds, driving, H1N1 book-sneezing browsers-who-don't-buy, long lines, limited selecitomn, etc. etc.
It's dead. It's like a species that is no longer reproductively viable–only one male individual left, no females. When that one dies, the species is gone. That's brick & mortar right now. It's just Barnes&Noble. And they're going, too. Guarantee. Solearn to master online.
So just B&N had 10% online!
Then you have the mighty AMZN which is 100% online.
So I think online is coming out ahead. But I need to see the full numbers, esp. Amazon.
Someone gets testy when he gets the proof he asks for.
"H1N1 book-sneezing browsers-who-don't-buy,"
LOL!
that's not the proof. that's only B&N. I need to see the entire industry's sales for 2008, broken down by online vs. physcial, all sectors, all sources. Without that, it's just guesswork.
Anon 5:25,
It's doubtful that kind of data even exists. If it does, it's probably highly confidential and would cost $ in the form of one of those proprietary "industry reports."
the fact that B&N does 10% of its total sales is interesting in and of itself. That's higher than I epxted, since B&N is the last major stalwart physical holdout.
I think so too Nathan, about the easy access for e-books and the increase in overall book sales.
One of my cons against purchasing an e-reader (or like ap on a phone) is the instant gratification factor. I am on a budget. Not so strict I can't buy a book once in a while, but I have to be careful logging onto Amazon or entering an actual bookstore. Once I get there, I'm an impulse buyer – for the right price.
I've a feeling my penny pinching will be seriously taxed when I don't even have to wait the 24 hours for an on-line purchase to arrive in the mail.
Many of my friends at work are the same – they buy more online than the would if they had to go out to the store.
…………..dhole
10% online for B&N is telling indeed. 1 out of every ten books bought at a B&N is online.
Next year, 1.5/10, then 3/10, 2020 9/10.
There is someting vaguely offensive about that signature line
….dhole
LOL
what's a d-hole?!
$1 out of every $10 B&N made was on-line, not 1 out of every 10 books. That's site-to-store, gift cards, books sold only in e-format, and all.
As far as Amazon, there's no correlation because there's no physical merchandise data for Amazon sales. There is no Amazon "store" like with B&N with which to compare the sales.
I dunno, man, technology is super-hard to predict. A lotta people said fax machines would go the way of the dodo with the advent of scanning & email and internet, but every time I need to transmit something fast with a signature on it, I get asked to use a fax. It's like a wart that just won't go away. Same with paper checks. Every time I pay the rent they want a paper check. Not cash, not PayPal, debit cards–paper checks. Another living fossil. Even snail mail…I still use it.
So I wouldn't say that just because online book buying and ebooks are here now that that in any way implies the traditional stuff is going away. There's dodo's in them thar hills.