Royalties are the portion of profits that a publisher gives to an author upon the sale of their book. Seems simple, doesn’t it? The thing about royalties is that it’s not always cut and dry. How much you’ll make on book sales will vary wildly depending on lots of different variables. These factors include advances, publishing styles, type of book, perceived marketability, and more. Below we’ll talk about what to expect from your publishers when your book finally goes to shelves!
There are three different types of royalties an author can earn:
We’re going to talk about all three of these in just a moment but we would be daft not to say a word about advances, what they are, and how they work. Traditionally, advances are a chunk of an author's royalties paid upfront when they sign a contract with a publisher. These advances are typically taken against an author's future royalties from book sales. What this means is if you are given a $10,000 advance, you will earn no royalties until the publisher has recovered that $10,000 from sales. At that point, you would begin to receive royalty payments. This little gem is known as “earning out.” Like so many other things in the business, your advance amount will depend heavily on the same standard factors. Your own popularity and the size of the press. Small presses often can’t afford to give gigantic advances whereas large publishers have no difficulties doing this. Now on to the good stuff.
The ideal way to receive royalties for many authors, a list royalty is essentially a royalty paid based on the retail price, regardless of publisher discounts. For example, if you are receiving a list royalty of 30% on a book when the retail price is $10.00 then you would receive exactly $3.00 per book whether the publisher sells it at market price or not. If the publisher cuts the price of your book down to $4.50 for a wholesaler, you still get $3.00 per book from that sale.
Next up is a royalty based on net sales. Net sale royalties are based only on what the publisher earns! If you were receiving a 30% royalty on the above book and the book sells for full retail price at $10.00 you’d still get the whole $3.00. However, if a publisher cuts the price of the book by 55% for a wholesaler then you’ll only get 30% of what the publisher earns. Under this model, you would only receive $1.65 for the same sale as above!
This is probably the least common way that traditional authors receive royalties but it does happen from time to time. Most often used for writers who produce nonfiction and other types of short writing, a fixed payment is bestowed up front and the author will receive no further payments for their work, irrespective of how many copies sell.
HERE AT HIP
At HIP, we firmly stand in favor of authors being fairly compensated for their work. A publisher should never be greedy or dishonest. Though costs for the production of a book can be high, small presses have no need to gouge clients and rob them of money they should rightfully have. Huntsville Independent recognizes that an author pours a piece of their soul into what they write and has therefore implemented a variable contract that allows for both recovery of funds for a publisher and just payment to an author by combining list royalties and net sales into one perfect contract that assures the satisfaction of creator and proponent. An author at HIP can earn up to 60% on eBooks, 40% on paperbacks, and 40% on hardcovers. Our contract is something we are most proud of here at HIP because it allows us to elevate our authors sustainably and ethically. Our contracts are not available publicly and can only be obtained by submitting a manuscript and receiving an offer from HIP. As always, thank you for reading. We hope you were able to learn something from this week's article. If you liked it, share it with your friends!
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