How Authors Make Money

So, you’ve written a book. Good for you. Now the money will start rolling in, right?

Not exactly.

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.

  1. 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.

  1. Royalties

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.

  1. 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?).

  1. 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.

  1. 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.

  1. 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.


20 Responses to How Authors Make Money

  1. Avatar
    Andrew Budek-Schmeisser August 29, 2018 at 6:28 am #

    Darn, Bob, I’m disappointed…I thought ‘How Authors Make Money’ was going to be a treatise on engraving plates, setting up a printing press, and avoiding visits from nosy Treasury agents.

    One suggestion I would add would be for authors of the romantic kind to offer their services in helping couples develop custom wedding vows.

    • Avatar
      Linda Riggs Mayfield August 29, 2018 at 8:41 am #

      Oh, Andrew! I’m having a teary, discouraging morning (bad news from 2 places AND the worst possible health news about a dear friend’s husband–you can relate), and your post made me laugh out loud. Thank you– I needed some perspective! You contribute so much to this blog!

      • Avatar
        Andrew Budek-Schmeisser August 29, 2018 at 9:02 am #

        Linda, I’m so glad that I could bring you a laugh…and I’ll be praying for you, and for your friend’s husband.

  2. Avatar
    James Scott Bell August 29, 2018 at 6:47 am #

    Say, here’s a wild idea, Bob: publish your own work and keep 70% of the revenue, paid monthly.

    • Avatar
      Rebekah Love Dorris August 29, 2018 at 7:11 am #

      Here’s another wild idea, Mr. Bell: Get Alphaword to pay you for those hilarious videos you put on Amazon!

      We bought one just because of your shopping-buggy-writing video. Now my kids beg me to let them write pages and pages on there. I bet many other homeschooling parents would love to buy one.

      You could seriously make money if those videos go viral. Bravo!

      • Avatar
        James Scott Bell August 29, 2018 at 7:37 am #

        Ha! Thanks for the mention of my modest video, Rebekah. I do love my Alphasmart Neo and use it all the time. They stopped production, but there are used ones out there via Amazon for a great price!

    • Avatar
      Myers September 6, 2018 at 6:57 am #

      Who did you use as a self-publisher?

  3. Avatar
    Rebekah Love Dorris August 29, 2018 at 7:02 am #

    Not sure if you’re in cahoots with Communicator Academy, but this morning they posted this article that dovetails nicely with yours! Definitely timely, coincidence or not.

  4. Avatar
    Anne Carol August 29, 2018 at 7:14 am #

    I’m an indie published author who works part time as an accountant. If I make money from writing, fantastic. But I don’t expect it, which is why I keep my day job. I love writing, and I’m glad I have a chance to use another part of my brain! I’ve considered the idea of offering bookkeeping services to authors as a side job. Many authors don’t have a clue about finances, and I’ve had a few ask me for advice. Something to consider.

  5. Avatar
    Pat Iacuzzi August 29, 2018 at 7:40 am #

    As a newbie I needed the clarifications–thanks, Bob!

  6. Avatar
    Loretta Eidson August 29, 2018 at 7:41 am #

    Thank you for another informational post. Those of us who aren’t published yet find articles like this very interesting. Now we know what to expect, or not.

  7. Avatar
    Carol Ashby August 29, 2018 at 8:12 am #

    Funny post, Bob! Only 1 in 4 earning out the advance sounds shaky for the publisher to me. They must be making a solid profit long before they hit the earn-out sales target or they wouldn’t be in business long. As someone who writes a bit off what traditional publishers want in my genre (unless it’s Francine Rivers), I’m happy with my indie sales and reader feedback, but I’d probably never get a contract or sell 10K to earn out in a year if I did. But many indies don’t “earn-out” their expenses, so there’s no guarantee either way.

    Here are 2 unusual ways to make good money with your books via self-sales from a webinar on odd places to sell your book:

    One man sold copies of his poetry book by giving poetry readings as he rode the subway. Many riders bought, but they didn’t say whether it was because people loved his poetry or bought to get him to stop reading.

    Another nonfiction author stood at busy street intersections and sold many copies of his how-to book from the median. Maybe if you wrote historical novels and wore the costume of its time period, that could work for fiction. Who wouldn’t want to buy a medieval romance from a man in chain mail carrying a broadsword? Or a Viking romance from a man in a fake-fur vest with horns on his helmet.

    • Avatar
      Linda Riggs Mayfield August 29, 2018 at 8:51 am #

      Oh, mercy, Carol!!! Bob’s funny but information-loaded post is bringing out the comedy in the serious writers! LOL at the possible reason for the subway poet’s sales! I think my family and friends might do that to get me to hush about the 1830s-40s if my books were in print. 😉

  8. Avatar
    Terry Whalin August 29, 2018 at 8:44 am #


    Great ideas and information in this article. Thank you. I have a free teleseminar on the same question and I cover a dozen different ways authors can make Make Money With Books

    Hope it helps.


  9. Avatar
    Sheri Dean Parmelee, Ph.D August 29, 2018 at 10:06 am #

    Thanks Bob, for your always-inspiring blog postings (which I now call” blog postings” instead of “blogs”- I believe I learned that from you).

  10. Avatar
    claire o'sullivan August 29, 2018 at 2:13 pm #

    Hi Bob,

    Love your posts.

    I have to side with Loretta, here. This is good information for the future. Like, when I am 90. Or with the Lord.

    In the meantime, I am hoping to take a ‘really good’ webinar on ‘branding.’ I am still fuzzy on the concept. I know platforms.

    Last comment. Besides selling flowers, handmade candles, homemade bread and pet sitting… is it possible for the ‘hope-to-be-agent/publishing contracted writer to give speeches i.e. like, how to commiserate? I have thought about that while saving my money for a webinar on branding…

  11. Avatar
    Tisha Martin August 30, 2018 at 10:38 am #


    In other words, if you want to be a writer, you’ve got to have your hand in as many hats as possible until, say, fifty years down the road before you start to see the full-time rewards for your labor….

    Okay, got it.

    Honestly, if it weren’t for the sheer passion and love and calling that drives me, I probably would think, Why put in all this effort, given the long-end results? Yet, any time I think about turning to something else, my heart—and my mind—pull me back to what I love: writing and editing.

    Too late to jump ship now. 🙂 I’ll ride this tidal wave.

  12. Avatar
    Tracy A. Radford June 10, 2019 at 10:49 pm #

    I appreciate your blog.This is the first time i am visiting to your post.really it’s so intersresting to read.Please keep up writing. Thanx for sharing.

    • Avatar
      Stephanie M. Wilkerson December 5, 2019 at 4:33 pm #

      So interesting to read everyone’s thoughts and ideas — and somewhat disconcerting as well! Have been writing since 2007 – children’s books and poems – but as yet, still unpublished!!
      When I was working in the cafeteria at an elementary school, helping children to open their milk containers, etc. etc. I would read to them from my work. How gratifying that I could see how delighted they were to hear my written words!!!
      And their laughter at the antics of my characters let me know yes, maybe you just might have talent!!
      For that reason, I keep sending manuscripts out and have had much
      positive response, but still can’t get used to the idea of having to pay to get your work published. I have heard it said that the publishing industry has changed and unless your last name is Obama or Bush, you can pretty much expect to pay something upfront!
      Would be interested to hear other
      authors thought on this — whether you are published or unpublished.

      • Bob Hostetler
        Bob Hostetler December 5, 2019 at 4:51 pm #

        Stephanie, I don’t think that’s true at all. There are good reasons and bad reasons to “self-publish,” but while much has changed, is changing, and will continue to change, it will continue to be possible (and usually preferable) to keep working and learning and writing and submitting until you receive an offer from an agent or editor.

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