Finances of Publishing:
Answering Questions from Last Week
I’m glad my two posts last week, How Do Book Royalties Work? and Is Your Book Worth It? seemed to be helpful. There were quite a few questions, a few of which I’ll try to answer here.
Sara asked: If an author wants to help sell their own books (lectures, readings, etc), how does that work? Is there a price break for authors who want to sell directly (say for 100 books)? Is that considered helpful or what do publishers think of authors pushing their own books?
A: Yes, it’s definitely a huge plus if an author is going to sell their own book! Many non-fiction authors are the driving force behind their own book sales because of their speaking engagements and back-of-room sales. The author’s contract with the publisher specifies the discount at which they can buy their own book for resale, and this is something the agent usually tries to negotiate to make it a win-win if the author has the potential to sell a lot of books on their own.
Lisa Jordan asked: I’ve heard many people say most first-time authors don’t earn out their first novels. Is this a red flag to future publishers?
A: First, I know the scuttlebutt is always that new authors don’t earn out their advances, but I’m not sure if this is true and I’m not aware of any research that categorically proves it. Since publishers don’t typically report this information anywhere, it’s all anecdotal. But yes, it’s true, some authors don’t earn out their advances.
As you learned last week, the earn-out figure is just one of a multitude of factors a publisher uses to determine whether a book is a success. There is also the break-even, or the number of units they must sell to recoup their total investment (not just the advance). Additionally, there is a threshold number of copies a publisher hopes to sell of any book, which is probably around 15,000 for the lower-expectation books. The publisher puts this all together to decide if the book was a good gamble or not, and will use that to decide whether to sign future books from the author.
As far as whether it’s a red flag to other publishers: the red flag is the sales figure itself. Another publisher doesn’t really care (or know) whether an author earned out their advance, but they do care about how many units were sold. Low sales figures are very difficult to overcome. So if you have published three books, and they all sold fewer than 10,000 copies, yes that is a huge red flag and you will have difficulty finding a publisher.
Jody asked: I’d be curious to know how hard or easy it is to sell 6,000 books. And what is the biggest factor in helping debut authors reach their earn out level?
A: I’m afraid this is one of those questions that doesn’t have a specific answer. Hard? Easy? If it were that scientific and quantifiable, we wouldn’t have so much difficulty making it happen, would we? It depends on a complex interweaving of the book itself, the title, the cover, the publisher’s and author’s marketing efforts, whatever else is going on in the culture, the tilt of the moon, and the amount of fairy dust applied.
Besides, you don’t want to shoot for the earn-out figure. You really want to shoot for something like 15,000 copies. It’s a respectable number for a first-timer.
Richard said: Maybe it’s time to talk about the range of copies sold for first-time authors in CBA.
A: I do not know. It varies so widely, but I imagine the range is something like 5,000 to 20,000. Don’t quote me on that.
Robin asked: How many publishers expect you to use your advance to pay for your own marketing, PR and/or book tours?
A: Publishers don’t expect it, exactly, but more and more, they’re hoping you will consider putting at least a portion of your advance back into marketing. Obviously this helps you, not just them. And by the way, you probably won’t be spending money on book tours, but other marketing and PR activities.
Finally, Tamara Hart Heiner said: What I don’t get is why publishers pay advances. It doesn’t make sense to me. No where else do you get paid up front (unless you’re a classy lawyer).
A: In my mind, your statement doesn’t make sense on any level. There are all kinds of compensation models. With a regular job, you work for two weeks and then you get paid for those two weeks; your employer doesn’t make you wait until you’ve worked, say, a whole year and then pay you for the year. They pay you as you go. In many fields, a service provider gets paid at least a portion of their fee prior to doing the work; in other fields it’s standard to charge a monthly retainer fee. So getting paid a portion of your fee “up front” when you sell your book makes total sense.
Also, consider that when you sell your novel to the publisher, you’ve already put in a year or more of work. If the publisher pays you an advance, that could hardly be considered getting paid “up front” since you’ve already completed the work. You’re simply getting paid prior to the publisher making money from your book.
That’s all I have for today. Let me know if you have further questions along these lines.