Last week we posted about creating first impressions and doing what we could to interest editors and agents in our work. I’m not sure where Faith, Misty, and Catie were planning to take this discussion this week, but I thought I’d jump ahead to an assumption of “success” and give you some sense of the economic realities of being a beginning writer. (I should add here that Catie posted about royalties back in May — yes, I checked — but what I have in mind to do is more geared toward beginners.) So brace yourselves for a dose of reality. It’s not going to be pretty.
Let’s start with a little quiz: What do you think is (approximately) the average advance given to a first-time writer of genre fiction? a) $5,000; b) $7,500; c) $10,000; d) $12,500; e) $15,000. Think about it for a while. The answer is coming later.
So, you’ve won over an agent and together you and she have managed to interest an editor in your book (and we’ll assume that this book is completed). Good for you. Let’s say you get a call from your agent today, December 1, 2008, and she says, “Congrats! Editor X from Fantasy-Books-R-Us has agreed to publish your book! We’ll have a contract for you soon. Editor X has some changes he wants you to make, but your book is going to be published!”
You pop open the bubbly, you take your spouse or whoever out to dinner. And you wait. And wait. And wait. Let’s be generous and say that the contracts finally arrive in March, and let’s use the middle figure in our quiz and say that the publisher is offering you a $10,000 advance. You eagerly sign the contract, send it back, and wait for your advance check. Which comes in May (again, we may be a bit generous with this). But your advance check isn’t for $10,000. No, chances are that your advance has been divided into three parts: you get part one upon signing the contract, part two upon delivery and acceptance (D&A) of the manuscript, and part three when the book is finally published. Sometimes advances are divided in half (part on signing, part on D&A), but division into thirds is more typical. So your check is for $3,333.33, right? Well, no. Your agent gets her 15%, so your check is actually for $2,833.33.
But wait, you say. My book was finished when I sold it, so don’t I also get my D&A advance? And when my laughter subsides, I gently tell you that, no, the key words are “and Acceptance,” and as your agent mentioned Editor X has some changes he wants made to the manuscript. It takes a couple of months, but you eventually get X’s comments and spend several weeks on rewrites. You hand in your manuscript and a month later you get your second check. It’s now September 2009, and believe it or not you’re doing really, really well. You’ve made $5,666.66 this year. Before taxes. (And again, my timeline has been pretty generous.)
So you’ve handed in your completed manuscript. Congratulations! The book now has to go through copyedits, proofs, and various production processes. And as a beginning writer, you have to expect that you’ll be placed pretty far down the line in the publishing schedule. My first book came out two years after it was first turned in (before I did revisions with my editor), but we’ll continue with the generous timeline and say that your book is published in August 2010, a bit less than a year after you receive your D&A check. And so in 2010 you get your last advance check of $2,833.34.
Okay, so it’s been about a year and eight months since your agent gave you the good news about your book sale, and you have been paid a total of $8,500.00. But wait! you say again. Now I’ll start earning royalties, right?
Excuse me. I was laughing again. A few things about royalties. First, that advance you got is more properly referred to as an “advance against royalties”, which means that the $10,000 you were paid (of which you received 85%) is money you now need to earn through book sales. How long will it take to earn back $10,000? Well, it certainly won’t happen over night. Let’s say your book first comes out in hardcover (which is a very good thing to have happen) and its cover price is $25.00. For every copy that sells, you get a royalty of $2.50. So if they print 4,000 hardcovers (that could be a bit high) and you sell every one of them (highly unlikely) your book will earn out before it even goes to paperback. Let’s say you sell 3,000 copies. That would be a good sell through (the ratio of books sold to books printed) of 75% and would leave you only $2,500 short of earning out your advance. Now the book goes to paperback. It sells for $8.00 and you get $0.64 per copy (that’s 8% — pretty standard, although 6% also is common). So when you sell your 3,907th copy of the paperback, you’ll finally have earned out.
So what kind of timetable are we talking about? Well, generally the paperback comes out about a year after the hardcover, so that paperback comes out in August 2011, and if sales go well, you could sell that 3907th copy within a month. Let’s say that by the end of September 2011, you’ve sold 5,000 copies. The publisher now owes you $700 (minus your agent’s cut that comes to $595.00). When do you get that? Well assuming that the publisher is no longer holding back reserves against returns, you could see this money as early as April or May 2012. Yes, that’s right. Most publishers report royalties in 6 month periods: Jan. 1-June30; July 1-Dec. 31. For the first period you get a royalty report (and hopefully a check) in October or early November; for the second, you get your statement and check the following spring, April or May. So now it’s been three years and five months since you sold your book, and you’ve finally earned additional royalties, pushing your total earnings on this book to $9,095, or an average of $3,031.66 per year.
A couple of notes: Reserve against returns is an evil, evil phrase that I could spend several paragraphs trying to explain. Basically, the publisher bases “sales” numbers on bookstore orders, rather than actual sales. But since bookstores often return any books that don’t sell in a fairly narrow time window, they have to protect themselves against paying out royalties on unsold books. And so they substract a reserve from the amount owed. In the first royalty reporting period for any given book, that reserve can be as high as 2/3 of all moneys owed. It decreases gradually with each subsequent six-month statement, but it can be hiked up again with each new edition that’s published (so if a paperback version of the book comes out, the reserve can be increased again).
Second, the answer to our quiz was b) $7,500.00. That’s the average first advance for a new writer. $7500.00. Minus 15%, for a total of $6,375.00, divided into three payments of $2,125.00 each. So all those earnings we just assumed were actually higher than they ought to have been, though the good news is that your book might earn out faster than we assumed.
And third, all my assumptions in this post have been fairly generous. The sell-through, the timeline, even the contract terms (royalty percentages for example). Very generous. There’s a good chance that the average beginning writer won’t do as well.
I write because love it. I write because I have characters and stories in my head that are constantly clamoring to be given voice. I make a good deal more money now than I did as a beginner, but I still only barely make what any normal person would call “a living.” If you are writing because you have to, because the very idea of NOT writing makes you want to cry, because you love it so much that it’s all you can imagine yourself doing, then by all means write. But don’t give up your day job. Not yet. And if you aspire to be a writer because you think it might be an easy or quick way to make a buck…well, I feel another fit of laughter coming on….