Friday, June 22, 2012

The Reality of Royalties

Having had two agents and been in this business for a while now, I understand the inns and outs of royalties. I have friends published in every manner conceivable, a few with one of the Big 6 publishers, some with a small publisher, and some self-published. What I know about royalties will shock~and terribly disappoint~some of you. As a supporter of aspiring authors, I feel it’s important knowledge that you should be armed with prior to getting into the business.

When I was a newly minted writer first querying I had dreams of huge royalty checks (who doesn’t at first?) but then I landed my first agent and I was slapped with reality. Publishers (the Big 6 certainly, and most small presses as well) take 90% of your royalties. Oh yes, really. You’re left with 10% off the price of a net sale, then your agent gets 15% off that before you ever even see it.

Here’s an example: Let’s say your book’s retail price is $17.99 (typical price for a YA hardback new release). Wait though, you don’t get the royalties off that price. Your publisher offers the retailer a discount, usually at least 45% to 55%, which brings your net price down to $9.89 best case scenario. That’s why you see books marked down so far, because the retailer can afford it. Then you get 10% of that, about .99 cents. Wait again! Your agent gets 15% of that .99 cents, leaving you .84 cents off the sale of a hardback book priced at $17.99. Think I’m wrong, ask any of your traditionally published friends. They’ll tell you. I was floored when my agent told me that was how it worked.

The one saving grace to all of this is that most of us don’t write for the money, we write because it’s what we love to do. Still, it would be nice if publishers stopped giving such ridiculously deep discounts to retailers and stopped taking the lion’s share of an author’s profits. I won’t hold my breath on that one though.


Heather is the author of The Secret Of Spruce Knoll, Born Of Fire, Channeler's Choice, and the acclaimed historical YA fantasy, To Ride A Puca. A short story of Heather's is also available in the free In His Eyes eBook anthology.
Posted by Heather at 5:00 AM

19 comments:

  1. LM PrestonJune 22, 2012 at 9:26 AM

    Also note that agents have to split their commission with their agencies too! And additional cost such as returns etc can be taken out of your royalty. But at the end of the day when you add up all the hours spent writing then divide that by your profits ... cough cough you get something well below minimum wage. That's why you've got to love it for the art of it and not to become a millionaire.

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    1. HeatherJune 22, 2012 at 11:36 AM

      Excellent point! Even a huge advance is chopped after the agent's cut and taxes. And returns, oy, those are just a nightmare. It definitely canNOT be about that money, that's for sure. We must do it because we love it!

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  2. UnknownJune 22, 2012 at 11:54 AM

    Wow. I knew royalties weren't cut in favor of the author, but I didn't realize it was that bad.

    Yup, gotta be in it for the love.

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    1. HeatherJune 22, 2012 at 12:25 PM

      Pretty scary isn't it? The time for change is long over due.

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  3. Patricia JLJune 22, 2012 at 12:10 PM

    That really makes me cringe and glad I decided to self publish.

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    1. HeatherJune 22, 2012 at 12:31 PM

      It does doesn't it?! It makes going indie a lot more attractive for sure.

      Delete
  4. cleemckenzieJune 22, 2012 at 12:49 PM

    This is such an exciting time for writers. We have so many choices as to how we publish. Thanks for this Heather. Excellent information.

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    1. HeatherJune 22, 2012 at 9:24 PM

      I couldn't agree more. Now we have something we didn't have twenty years ago, options. I love that because it puts the powerin the author's hands were it belongs.

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  5. Matthew MacNishJune 22, 2012 at 12:51 PM

    Having worked in the music industry, I wonder if there are any contracts out there where royalty rates are adjusted after costs are recouped. In the music biz, your "points" (basically the same thing as royalties) can increase dramatically after all costs are recouped (marketing, the advance, cost of recording the album, etc).

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    1. HeatherJune 22, 2012 at 9:26 PM

      Unfortunately, not in the book industry. Authors have been taken advantage of for a very long time now. But options are arising that will hopefully change that!

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  6. erica and christyJune 22, 2012 at 4:31 PM

    Like Elle, I knew it was bad, but not 84 cents bad. I guess if you're pursuing traditional (esp. Big 6) publishing, it makes a good agent - and a good advance - even more important.
    erica

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  7. Julie MusilJune 22, 2012 at 7:33 PM

    This really is shocking, but like you said, we're in it for the love. Thank goodness :)

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    1. HeatherJune 22, 2012 at 9:28 PM

      Indeed, it's all about the love. It has to be!

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  8. Cheri LasotaJune 23, 2012 at 9:49 AM

    Great post, Heather. So many writers aren't aware of the true net royalties going in. Good to open up a dialogue about it.

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    1. HeatherJune 25, 2012 at 12:38 AM

      Thanks Cheri. If I had known going in it would have possibly changed things for me. It's so important that writers know this!

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  9. Misha GerrickJune 24, 2012 at 11:19 AM

    That is interesting. I always wondered how they worked, so I think it's great that you shared the information with us. Thanks!

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  10. Jessie HarrellJune 26, 2012 at 10:21 AM

    wow - I missed this one last week. I always knew it was a rip-off for authors, but didn't fully appreciate it until I saw your numbers. Thanks for sharing!

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