- Receiving an advance from a publisher
and profiting off book royalties
is a dream come true for many authors.
But what are royalties and what's the math on royalties
you should know as an author?
If you're wondering that,
this video is for you.
(rhythmic music)
Hey there, I'm Julie, the book broad.
Founder of Book Launchers,
your professional self-publishing services team.
When an author is traditionally published,
they're paid through book royalties.
No, I don't mean Hamlet, Khaleesi, or Prince Humperdinck.
Did you know Prince Humperdinck was a prince?
I didn't.
Anyway, in exchange for the rights to the book,
the publisher pays the author a set amount
per every copy that's sold.
This is based on the retail price of the book.
Of course, retail prices differ,
depending on the formats of the book available
and royalty rates vary depending on the publisher.
But typically the breakdown looks a little something
like this for an author.
For each paperback book sold,
you'll earn five to 8% royalty.
Around 15% for every hard cover,
and usually 20 to 25% for each e-book.
Brace yourself.
We're gonna do a little math.
But don't worry,
I'll try to make it as easy as possible
for me as much as for you.
Let's just say your paperback book retails at $20
and you're contracted to receive 5% royalties.
You are going to earn $1 per every book sold.
Sounds kind of good, right?
No wonder authors dream of book deals
with a traditional publisher.
Every book sold adds to your paycheck from your publisher.
Sell one million copies
and you'll make one million in royalties.
Hoo hoo!
Of course,
selling one million books is extremely uncommon.
More likely you'll sell less than 10,000 copies
of your book.
Maybe as few as 500.
Now that math doesn't look as awesome, does it?
But there's another catch.
Don't expect a big payday as soon as your book is published.
You'll only see the royalty paycheck you're dreaming
of once you've earned back your advance through sales.
When a traditional publisher offers to publish your book,
the deal usually comes with an advance.
A deal worth signing usually comes with an advance,
which is an upfront payment usually paid in installments
from the publisher based on how many copies
of your book they think will sell.
Unless you're a big name like author James Patterson,
who landed the biggest advance in history
with $150 million for 17 books,
or a celebrity like Tina Fey,
who reportedly received a $6 million deal for her book,
"Bossy Pants,"
don't expect to quit your day job
from advances on royalties.
Six figure advances are really rare.
Many advances, especially for less well-known authors
or books that may not be in high demand
or written on a super hot topic,
they often don't even reach five figures.
So there's a lot of factors that come into play
to determine the number on the check.
There's the publisher, of course.
But the author, their platform,
the book itself, the genre,
current trends in the publishing industry.
Of course the marketing plan for that book,
and a few other things too.
It's not a one size fits all
and publishers aren't going
to take a chance and pay advance.
That's a rhyme.
They're not gonna take a chance or pay an advance.
(laughing)
Serious mode now.
It's certainly one size fits all
and publishers aren't going to take a chance
and pay in advance for a book
they aren't sure is going to be a guaranteed success.
Whatever the final number,
it's important to remember that an advance isn't simply
a thank you gift from your publisher.
It's a payment against whatever future royalties you make.
Unless you make enough book sales
to cover the cost of the advance,
you won't ever see another check.
A little bit more math.
If your publisher paid you $50,000 as an advance,
which by the way would be really awesome,
and your book earns a dollar per copy in royalties,
you're going to have to sell more than 50,000 copies
before you receive any royalty payments.
If you don't earn back your advance with enough book sales,
the money is still yours to keep but you're going
to have trouble selling your next book
to any publishing companies.
If you choose to forego the glories
of an advance and book royalty checks and self-publish,
you'd not only earn money right away
but you'd also earn a higher percentage on your sales.
You also own the rights to your book
so you can sell off foreign rights,
you can connect with TV producers
to turn your book into something for the screen,
and you can make all the profits.
You can sell courses based on your book.
You can build a brand around that book title
for your business and so much more.
You have much less flexibility to do all those things
when you get a book deal because you don't own the rights
or the content in your book anymore.
The publisher does.
When you self publish your book on Amazon,
Kindle Direct Publishing refers
to your payments as royalties.
But based on the definition,
that's not really correct.
You don't receive royalties because you keep the rights
to your book, set your price,
and decide on your profit margin
rather than a publishing company.
You can still wear a royalty crown, though,
if it makes you feel better.
I think you should wear a crown to talk about royalties,
don't you?
I like it.
All right,
KDP offers two payment options for e-books,
35% or 70%.
Obviously the 70% seems like the better choice
but there are certain requirements
to get this higher rate,
like pricing and geographical availability.
That might not work for you.
If you enroll your book in KDP select,
you'll see a different payment structure.
I'll link to a video on KDP Select at the end.
Oh, and make sure you've subscribed
to the channel and turn those notifications on
so you can catch future videos too.
So you can learn all about the latest KDP
and self-publishing news.
Okay, with all that math,
I'm sure you're excited to hear this,
but let's go back and do a little bit more math, okay?
(laughing)
You published with a traditional publisher
and they pay you that awesome $50,000 advance.
You then sell your first 50,000 copies at $20 each,
which covers that advance.
After that you'll make a dollar for every book sold.
Now selling 50,000 books is no joke
and that could take quite a few years.
But if you self-publish that same book on Amazon,
you'll earn at least 35% on each sale
from the very beginning.
Since you won't be paying back an advance
with those 50,000 copies you sold your book for $20 for,
you'll end up with $350,000 in the bank.
We have to bring you back to reality.
It's rare for a nonfiction author
to get a traditional book deal.
If they do,
it rarely comes an advance that's much larger than $10,000,
and it almost always comes with you keeping none
of the rights and earning less than an 8% royalty.
If you do this on your own without a publisher,
you're going to pay the upfront costs of editing,
book design, cover design,
and possibly a whole lot of marketing.
But you keep all the rights,
and the profits, and the control.
You can make a lot more money selling a lot fewer books
if you self-publish,
and that doesn't even factor in the other streams
of income that should result
from your book like getting clients,
paid speaking engagements,
or higher rates for your service.
Publishers don't consider these opportunities
because they don't translate
to direct book sales in many cases,
meaning they're not going to make money off them but you do.
Whew.
Well, now you know what royalties are,
crown optional,
and what you might make if you traditionally publish
versus self-publish.
Signing a book deal with a publisher
might get you an advance and royalty payments
but that doesn't always work in your best interest
if you're hoping to do more with your book.
Trading the rights to your work for a book deal
with a traditional publisher means you lose control
of the content,
and for many authors including myself,
that might not be worth it when your book can open the door
to so many more opportunities for you and your business,
and you can make a lot more for every copy sold.
By the way,
you don't need to be traditionally published
to get wider distribution.
Check out this video right here
to learn how to sell your book to local bookstores.
And this one over here
is the all-important info on KDP Select.
Go ahead, click on over.
I've got coffee on in the #noboringbooks mug.
I'll see you there.
(rhythmic music)