So, you’ve written a book. Good for you. Now the money will start rolling in, right?
There are a number of ways authors make money, but writing a book is only one step in a long and arduous journey. And, though the details vary widely from one author to another (and one book to another), there are six basic ways an author makes money.
- An advance
When you sign a book contract, the publisher will sometimes (not always) offer an “advance.” Often (not always), half of the advance is paid when the contract is signed and half when the manuscript is received and accepted by the publishing house (some contracts divide the advance into three or even four payments issued at different points, such as when a marketing questionnaire is returned by the author and when the book is released).
How much will your advance be? That depends. On your platform. Genre. Past sales. And more. Also, it depends on the publishing house (some publishers rarely deviate from a certain figure, while others base their offers on formulas involving complicated math and mystical incantations). If more than one publisher wants to acquire your book, they may increase their initial offer.
The advance is—get this—an advance. That means that it is a payment offered in advance (see how that works?), against your future earnings. In theory, the advance was more or less intended to feed and clothe an author while he or she writes the manuscript, but don’t make me laugh.
Once a book is released, it begins earning royalties for the author. So, for the sake of illustration, let’s say your contract specified 10% of the hardcover retail price on the first 5,000 copies (rates are often 10% of the hardcover retail price on the first 5,000 copies, 12.5% on the next 5,000, and 15% thereafter; trade paperbacks might be 7.5% of the retail price, and mass market editions still less—and some publishers pay royalties on the “net” (after their expenses), not on the cover price). Let’s say the retail price of your book is set at $20. So, if your book sells those first 5,000 copies in hardcover, you make $10,000 ($20x5000x.10). If your advance was $10,000, then your book has “earned out”—that is, paid back the advance the publisher paid you.
The above is a simplified, streamlined scenario. In most cases, every iteration of your book has its own royalty rate, each of which is defined in the contract, including foreign editions, audio, ebook, etc. The income from each of these categories should be reported in regular royalty statements from the publisher (usually once, twice, or four times a year, depending on the publishing house).
Once a book has earned out—which happens in only 1 out of 4 cases, on average—royalties are paid to the author with the release of each royalty statement. And those checks continue to come as long as the book keeps selling. Or so I’m told.
- Speaking engagements
You may not consider yourself a speaker, but as an author you can also generate some income with speaking engagements at churches, conferences, seminars, libraries, schools, etc. You can do all this before your book is released, of course—and you should—but for most people it gets a little easier to book events once you’re a big deal (which all authors are, right?).
- Book sales
Authors also benefit from “back of the room” sales of their books at speaking engagements and personal appearances (such as book launch events and book fairs). Your contract may allow you to purchase copies of your books at a discount (40-60%, perhaps), allowing you to gain more readers and make a little money to cover all the free review copies you sent out and maybe even pay for the cab drive home. Maybe.
- Article writing
One area of revenue that is often ignored by authors is magazine or newspaper article writing. A book is not the be-all and end-all for a writer. In addition to new content that may ignite the next book idea, some authors create articles based on their books’ content or even excerpt parts of their books and sell them as magazine articles. They also may mention the book title in the “author blurb,” providing additional promotional benefit. Even while your book is awaiting release, you can market articles touting a “new” or “upcoming” release.
- Other services
Just because you’re a big, important author doesn’t mean you should neglect to offer or stop offering other services that provide some (usually more regular) income, such as blogging, editing, proofreading, writing for businesses, etc.
These are not the only ways to make money as an author. You can also sell flowers on the interstate off-ramp with some of your poetry attached to each bouquet or sell all of the printouts of your first drafts at the nearest recycling center. But the above are the most common, and should make it clear that few of us big, important authors rely solely on one income stream in the constant task of staving off starvation.