Fiction Workbench

Blog of the Fiction Fix-It Shop

Earning Money By Writing Fiction? Part 1

Posted by Meredith in Writing Advice (September 7, 2010 at 9:36 am)
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Every writer I have met dreams of getting published and being able to quit their day job and write full time–including me. I’m helping out Randy Ingermanson at Advanced Fiction Writing answer  some reader questions. Today’s is from Alexandra, who wants to know

Randy, what do you mean by ‘the pay is not good enough to do it as a job’?  I am hoping to make a career out of writing novel. I do, however, need to pay the bills too.  Could you give an idea on the payment scenarios?  It would be very helpful.  Thank you.

Well, Alexandra, I hope it’s okay if I take a stab at answering your question. It’s not a simple answer, so I’ve broken it into two parts. I think it’s a really important question that published writers tend not to explain enough to up-and-coming fiction writers. We don’t talk about it probably because it’s not a very encouraging answer for most of us.

The truth is that the VAST majority of published novelists cannot support themselves, much less a family, on just their writing. This is especially true of those who are debut authors. Yes, we hear about the big deals, the instant bestseller debuts, the cult followings–but you hear about them because they are not that common. Most of us make up the class of fiction writers known as the “Mid-list.” Our books sell well enough to keep publishers interested in publishing us, but not well enough to make us bestsellers.

Here’s how traditional royalty-paying publishing works. When you’re offered a contract for your fiction manuscript, it comes with an advance. For a first-time author, it can be as low as $3,000 or $7,000 per book. Of course, sometimes it’s higher–depending on the publisher and how many copies of your book they think will sell in the first year it is published. But since we’re being brutally realistic here, let’s use the lower end. We’ll say $10,000 is your advance on your first book.

You don’t get that entire amount all at once. A lot of publishers are now splitting the advance into three payments. They pay the first when you sign the contract–so about $3300. They pay the second usually when you turn in the main revisions on your fiction manuscript–which is another $3300 or so. The third payment comes when the book is released–for another $3400.

Because print books don’t come out right away, these three payments can be spread out over 2-3 YEARS. Additionally, if you have an agent–which is almost required these days–you can subtract 15% from each of those amounts for your agent’s commission.

When the book comes out, you will not be paid another dime until you have “earned out” that advance. This means the royalties you earn from each sale of the book (usually around 7-8% of the retail price, though it’s figured differently for discounted books, global sales, and various formats) are held until that amount reaches $10,000. After that, then you will be paid royalties on additional sales. Usually, you can figure you’ll get a little less than $1.00 in royalties per book–so this means that your novel has to sell over 10,000 copies in order to earn out your advance. And remember that if you do get royalties, 15% automatically goes to your agent.

Another thing that publishers do is to hold “reserves.” Because bookstores can return books, just because the publisher has shipped 10,000 copies of your novel does not mean that 10,000 copies have actually been purchased by consumers. Publishers get a sampling of actual sales numbers from a certain set of stores, and then they have formulas for estimating the actual sales amount. But until they start getting books returned, they have no idea whether the books they’ve shipped are actual sales or not. So in their accounting, they hold back a certain number of the shipped novels in “reserve”–so they don’t end up paying you royalties on books that later get returned instead of sold. The number of pay periods they are allowed to do this is specified in your contract. Typically, it ends up being about 2 years. This means that even if your book has shipped, say, 14,000 copies, and it looks like you’ve earned out your advance, it still might be a couple of years before the major part of the returns are in and the publisher can tell if they actually owe you royalties or not.

This is what happens on the low end of the mid-list, remember. If your book is a hit, then it’s a lot easier to tell when it has earned out because the novel is being re-ordered, not being returned.

Now that you know how publishers pay authors, check back tomorrow for Part Two to find out ways fiction writers deal with this reality.

As always, if you’ve got a writing question, you can ask here.