What Are Book Advances? Understand How Book Advances and Royalties Work
Being a writer is a profession that, among many other things, includes creativity, research, and a sufficient amount of self-awareness.
But it's still a profession. So authors need to get paid for their work.
Here is the part that remains shrouded in mystery for many.
This is because you probably read about authors that closed a six-figure book deal, so you're wondering why some can do it and others can't.
The reality is that advances and royalties, the two ways for authors to get paid, are different for each author.
So, if you were asking yourself how successful writers make money and how you can support yourself by writing adventure, romance, or detective stories, you need to know everything about the process of the book advance.
In this article, we will open the scenes in the sphere of book publishing.
What Is a Book Advance?
A book advance is a sum of money an author gets when signing a contract with a publisher, to provide the writer with the necessary funds to complete the book.
The idea of a publishing advance is to provide the writer with additional financial support until the book is ready to be published. They can cover direct working expenses, accommodation, and meals.
The publisher calculates and estimates the profit and loss from a book they want to obtain, which leads to determining the advances they can give to the authors.
The amount of the advance varies according to many factors:
- The data showing how similar books performed in the past;
- Author’s track record (if there is one);
- The book’s genre;
- The size of the publishing house.
When the publisher gives the author a publishing advance, it means they consider the book promising and capable of making a profit in the future. After all, hardly anyone wants to invest in something people will not buy.
Still, we should mention that in the case of paying for the book in advance, the publishers act at their risk. This is because they are investing in possible future returns that they may not get.
Those who have ever tried to finish a book and applied for an advance understand how important publishing companies that give advances are.
This is because royalties come only after a book is launched, as we’ll see in a minute.
Because not every publishing house gives book advances, many authors are already trying to fight it. They are already openly speaking out against such practices because sometimes, many writers do not have the opportunity to complete work due to a lack of advances. And it's a painful experience.
How Will You Receive Your Book Advance?
The schedule according to which book advance payments are made has changed in recent years.
Previously, advances were paid in two stages. The first part of the payment was made when signing the contract between the publisher and the author. When the manuscript was completed, the writer could receive the second part.
Today, publishing houses do not adhere to clear rules in the matter of payments. There are differences in the frequency of book advance payments, according to each publisher and also your future book.
The advance payment of the book is most often divided into installments, which can vary from three to even six parts. But it’s usually upon signing the contract, after submitting the final manuscript, and then on publication.
It’s also influenced by other various factors, ranging from the amount of the advance payment ending with the publisher itself.
So, the higher the income, the more parts it will be divided into.
The only thing that has not changed is that the author still receives a particular portion when signing a contract.
How Much Is a Typical Book Advance?
Dreams of publishing their own book take over novice authors. What awaits them for their debut literary creation?
We know you want to get specific numbers, but as I mentioned earlier, the book advance depends on many aspects.
This is why there is no exact number. Even between two of your books, there will be some differences.
Rebecca Brandwein is a well-known New York Times best-selling author. She says $1,000-$10,000 is a good bet for aspiring authors.
Of course, you can be the second Stephen King or JK Rowling. But if you approach this issue from the point of view of financial planning, it is better to remain realistic. At least at the beginning.
It is better that you will be pleasantly surprised later when you receive a book advance, not of 10,000 thousand but 100,000 thousand or even a million.
What Is the Difference Between Advances and Royalties?
The book advance has an alternative name that more clearly conveys its essence: advance against royalties.
But there are differences between advances and royalties.
However, the relationship between the advance and royalties is important.
The advance is what you get before the publishing of the book.
Royalties are what you get after publishing the book and meeting the advance. So you won't earn any royalties until a book's sales are equal to their advance. This is also called earning out your advance.
Remember what Rebecca Brandwein said about the book advance?
So, let’s say you get $10,000.
This means that the book, after publication, will have to make a $10,000 profit. And only after that can the author expect to receive additional income or royalties.
There are cases when the authors don’t sell enough books, so they don’t earn out. There are also situations where they sell less than the amount of the advance, but they don’t have to return the money.
Publishers accept this risk when they sign a contract with an author. It can, however, affect working with the same publisher in the future.
Let's dig deeper into what royalties are and how they work for your books.
How Do Royalties Work for Books?
We talked about advances in books, but it is worth considering another means by which the work of writers is paid by publishers: royalties for the book, which we have already mentioned.
First things first: what are book royalties?
In short, before contacting the publisher, the book's copyright belongs to the author.
But when concluding a contract to publish a manuscript with a book publisher, these rights are transferred to them, and the writer receives a predetermined amount of money as a result of this transaction.
This money is called royalties and is calculated as a percentage of book sales. This means that the better the sales, the higher the royalty income from books.
Everything related to the rights assignment, book delivery methods, and royalty rates are written in the contract. In addition, many publishers set royalty rates based on the type of binding. For example, the percentage of a paperback book will be less than a hardcover book.
Royalty payments and checks
The book's author will be able to receive his first fee after the book is considered fully "recouped," meaning they met the advance money with the sales they made.
The publisher then accepts regular payments until the book is out of print.
As a rule, book authors receive royalties twice a year. If the author works in tandem with an agent, the latter gets a particular percentage of the check.
Each check must be accompanied by a report that lists the number of books sold.
Is Social Media Something to Consider When It Comes to Income?
We certainly live in an era where social media is the new word-of-mouth marketing.
This is why it’s not uncommon for authors to be overly concerned about the number of their followers on various social platforms.
It should be noted right away that this is not at all a reason for worries. After all, it's not the quantity that is much more important but the quality of the users who follow you.
How actively are they engaging with your content? Do they like what you post? How else do they interact with you? Which social media platforms are working out for you?
Observe and analyze these aspects and see where you should invest more of your energy. And more importantly, how much of it.
You shouldn’t put all your hopes into social networks.
However, it’s not recommended to underestimate them. It’s best to think of social media as an additional tool that helps the author a little to get going, together with other book promotion services.
Your Agent Can Play a Critical Role
In most cases, a writer cannot do without an agent. After all, the conclusion of an agreement with a publishing house depends on their work.
Their job is to look for a publisher who is ready to take on the publication of the author's book and discusses the terms of the contract. Also, the agent helps promote the book and thinks about its presentation and advertising.
The agent controls timely payment and withdraws his commission from the transferred amounts. Most often, the commission is 15%.
Do not rush to accept the first offer
The publishers' policy is never to offer the most significant advance they can afford.
Therefore, they always name a smaller amount. And it's in the interests of the novice author not to fall into the trap and try to negotiate the terms of the contract.
You may not be able to negotiate a pay increase, but you can get some other benefits, like audiobook publishing rights or translations.
There is absolutely no need to be afraid to demand a more significant book advance. Worst case scenario, your proposals will simply be rejected, and you will sign the original version of the contract. And if something comes out of the negotiation, you will win.
Earning out of the Book Advance
A considerable advance and a high-quality work agent cannot provide absolute success for the book. There are many cases when not even readers can cooperate with well-known publishers.
But do not worry about this.
The advance is the original contribution to the book and the author, which in any case is irrevocable. The expenses remain with the publisher.
On the other hand, the further cooperation of the agent and the publisher is directly dependent on the sales of the printed books.
An excellent result is considered when the amount of money received for the sale of books exceeds the advance amount.
However, one should not lose sight of the possibility of returns, which is often faced with new editions. In this case, publishers take a small percentage, the so-called "reserve," which will cover part of the money for returns.
Traditional Publishing or Self-Publishing?
Book advances are related to traditional publishing, and some authors are really keen on it.
Which we understand.
But if you're a new author and don't want to wait, wondering if you'll get enough book advance to write your book, you can easily go for self-publishing.
Self-publishing has been thriving over the last decade, and there are platforms, such as PublishDrive, that work as an aggregator and will help you publish and distribute your book to thousands of stores worldwide—digitally and in physical bookstores.
Note: After publishing, you’ll start earning royalties after two months. PublishDrive compiles sales reports around the 10th of the month, two months after the sales, with the deadline for payment being the end of the same month. For example, sales made during May will be reported around the 10th of July and paid at the end of July.
In conclusion, it is worth noting that book royalties and advances are equally crucial for authors.
Advances give writers with limited means a chance to complete their work.
And who knows, perhaps this will help them become one of the most famous authors of world literature.
Unfortunately, today, issuing advances is not so developed for newcomers' required level of support. But there is hope that this trend will soon change.
The fee for a published book is the best indicator of a successful work created. There is no better reward for an author than to watch copies of his manuscript fly off store windows.
Such a visual stimulus becomes a powerful source of inspiration for further creativity. In addition, by demonstrating high sales of their books, the writer wins the trust of publishing houses.
Thanks to this, it is possible to count on considerable advances and a more significant percentage of future sales earnings.