Advances, Royalties, and Earning Out

Words like advances, royalties, and earning out weren’t a part of my vocabulary six months ago. To be honest, I didn’t even have a handle on Net and Gross. My bad. I’m just not a money girl. I mean, I like money, but the concepts have never been important to me. (Sorry Jon S. if you are reading this.) Demystifying monetary terms in the writing life has been one big eye-opening extravaganza.

My contract says that because I won the Autumn House Press Prize, I would win $1,000.The small print said, “$1,000 advance … against royalties.”

A book advance is the agreed to, up-front amount of money the author is paid. (i.e. I got a check in the mail.)

Royalties are the money an author makes when a book sells. Royalties are usually a percent of earnings.  In my case I make 7% net. For example, if the book makes $10 for the publisher after all costs are paid out, I earn 70 cents on that book.

An advance against royalties is money that is ‘advanced’ or sent to the author ahead of time. The amount is based on what the press projects it will earn. Advances given are dependent upon the size of the press, the marketplace, the author’s track record and fan base. A book advance can range from a few hundred to a few million. The smaller the press, the less known the author, the smaller the advance.

Earning out is a term used when a book ‘earns’ its advance. The author royalties from sales have surpassed what the publisher paid the author as an advance.

Royalty Payments begin AFTER the book has Earned Out.

Here’s what that means: Autumn House paid me $1,000 up front, an advance against royalties.When I sell on Amazon, I make 21 cents per book.

I will need to sell 4,760 books to Earn Out.

A book run is the number of books printed. Autumn House has contracted a run of 700 books for my first edition. 700 is a really good run for Autumn House Press. If they sold out the run, it would be miraculous and unprecedented. My book is not projected to Earn Out. So although I like the sound of the word royalties, I’m not sure I’ll ever see them. Which is fine and dandy. Just saying that this is part of life as a writer. Which is just to say (once again and not for final time) best to keep that day job.  

Jill Kandel
  • Gianna
    Posted at 13:38h, 05 December Reply

    Huh. I am kinda a money girl, but then that’s my job. Which, per some advice, I imagine I’ll keep for a while.

    • Jill Kandel
      Posted at 09:04h, 06 December Reply

      Smart girl!

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