by Chuck Sambuchino
If you’re going to wheel and deal with literary agents and editors, you’ll end up spending more time than you’d like discussing rights, contracts, advances, royalties and a whole lot of other
boring important stuff. That said, I want to address the most common questions regarding how advances and royalties work. In other words, how does the payment process work when you sell a book? Here are some FAQs:
1. How do writers make money?
You sign a contract with a publisher. In exchange for signing over the North American and English language print rights to your book and possibly other rights, as well, you are paid one of three ways:
- flat fee: a set amount of money upfront that’s yours to keep. The amount does not change no matter how well the book sells. For example, if your flat fee is $10,000, the amount remains the same no matter if the book sells 10 copies or 10 million.
- royalties: a small amount paid to you for every book sold.
- advance against royalties: a sum of money upfront to you with the promise of more (royalties) should the book sell well.
2. Which of the three methods above is most desirable?
An advance against royalties. It’s probably the most desirable, and it is by far the most common. It’s like you get both #1 and #2 combined. Let me explain exactly how an advance against royalties would work. For this example, I’ll keep it real simple (for my own sake). Let’s say the publishing house offers you an advance of $60,000 and royalties of $3/book. Note that the upfront advance of $60,000 is not in addition to royalties, but rather part of royalties – meaning they’ve given you royalties for the first 20,000 books (times $3/book) upfront. Since they’ve already paid you the royalties of the first 20,000 books, you will not start actually making an additional $3/book until you sell copy 20,001. The royalty possibilities are essentially endless. You can make $3 a book forever as long as it keeps selling in bookstores and on Amazon.
3. What if my book bombs? Do they get the money back?