Advance Directive
Publishing Advances and How They Work
Good morning friends, Romans, and countrypeople. After avoiding our zeitgeistial plague for two years I have now, in this Year of Our Lorde 2022, come down with the sickness. I actually caught it at a big party; it was all very Masque-of-the-Red-Death. If I have to go out, I would like to go out like a Poe story. In the event that this illness does not fell me, I wish to be walled up in a wine cellar (with all the wine on the same side of the wall as myself).
Today’s Shelf Life is not about advance directives, which are something I have no real thoughts on except that everyone should probably have one, even if you have no intention of being incapacitated, because you never know when someone will invite the personification of death to your masquerade party. Today’s Shelf Life is about advances, that is, the money you get paid when you sell a manuscript to a publisher, something I have somewhat more thoughts on.
The original Shelf Life mission is to help people understand the publishing industry when they have not spent their career working in said industry but would like to be part of it, usually as an author. So that’s most people. Not in the sense that “most people” who want to be an author do not have a background working in the publishing industry, but also that “most people” want to be an author or, if they don’t want to be, at least think they easily could be.
Becoming a traditionally published author is pretty hard because first you have to write a manuscript which is something already most people will never do, but then on top of actually writing the manuscript, you have to convince a succession of people to champion it and spend money doing so. And those people see fifty thousand manuscripts just like yours every ten minutes.
Part of the money those people will spend championing the manuscript is money that comes to you, the author, in the form of an advance, which is what we are talking about today.
A sentiment I hear often from fellow writers is that we wish our manuscript would snag agent representation already so that we could get down to the business of selling it, raking in that sweet advance money, and quitting our day job to write full time. So I hate to be the bearer of bad news but it rarely, if ever, works like that. This is due in part to the overall size of advances and also the the schedule on which advances are paid out. And then this is also due in part to the fact that it costs more to make a living as an author than people realize, as I discussed in Write to Life.
Let me not get ahead of myself.
First: What is an advance? An advance in the publishing industry is an advance against author royalties. It is not money that is additional to royalties the author will receive; it’s instead payment in advance of some of the royalties your publisher expects your book will earn. When an author receives an advance, the amount of that advance is later paid back to the publisher from the author’s royalties once the book starts selling. Only after the advance is paid back does the author begin to receive royalty payments from the publisher.
So let’s say you’ve sold a book for a $10,000 advance and you and the publisher have agreed to a 10 percent royalty on sales. For the sake of making the math easy, your book will also sell for $10.00 a pop. For for every book sold, the author’s share will be $1.00. That means you, the author, receive $10,000 up front before the book goes on sale. You will then begin to receive your royalty of $1.00 per copy sold after the first 10,000 copies sell. Your 10 percent (or $1.00) of those first 10,000 copies pays back your advance.
By the way, the average book in the United States sells 500 copies. Put another way, about 80 percent of books published in the United States sell fewer than 99 copies. (Read the full, if dated, analysis in PW.)
A book earns out when it sells enough copies that the advance against royalties is fully paid back and the author receives royalties on sales beyond the amount of the original advance. Many books do not earn out; that is to say, it is not uncommon for a book to sell so few copies that the author royalties never reach or exceed the amount of the original advance. This is not a great thing.
On the one hand, when your book doesn’t earn out, it means you got the better end of the deal than the publisher did. They bet on your book to make more money so they paid you more up front and then they lost that bet. On the other hand, when a title doesn’t earn out that makes it harder to sell your next title, to that publisher or any other. You can’t lie and tell them, “Oh yeah, my last book totally earned out!” This information is available to publishers.
Important: In the event your book does not earn out, you do not pay back the advance. You would pay back the advance only in certain events spelled out in your contract.
That’s what an advance is. Next, let’s talk about how much an advance might reasonably be.
You probably are thinking, “Catherine chose a nice, easy number for the theoretical advance in the example above to make the math simple but that’s obviously too small a number to be a real advance.”
Actually, $10,000 is a pretty sizable advance for many markets and genres. To put this in some context for you:
Xiran Jay Zhao, author of New York Times bestseller Iron Widow (on the list for 34 weeks, maybe more by now?), earned a $16,000 advance for that title.
NK Jemisin, the only person ever to win three consecutive Hugo awards for the books in her Broken Earth trilogy, received a $25,000 advance for each installment.
Roxane Gay got $12,500 for An Untamed State.
Then, on the other hand, you hear about someone writing an article that goes viral and being offered a six- or seven-figure advance to write a novel, and the publisher doesn’t even care what the novel is about. So it’s all over the place.
If you are not a debut author—if you have already sold successful titles in the past—then you’re going to be able to command a larger advance than a debut author in that same space (someone who does not have a proven sales track record) unless that debut author has something else going for them. If they’re already a celebrity and have a large following of fans, for example.
A debut author’s advance is going to depend a lot on the genre and market they’re writing in. Science fiction and fantasy tend to pay small advances—like in the $5,000 to $20,000 range. Romance usually pays less—in the $5000-and-under range. Nonfiction also really depends upon who you are and what authority you have to write about your subject, but again nonfiction advances for new authors tend to be small (in the sub-$5000 range). Literary fiction can be significantly more—again, depending.
Be wary of sites that report on the “average” industry advances. Remember, Stephen King’s and JK Rowling’s advances (and all the other bestselling authors) are part of that calculation alongside first-time debut authors.
The purpose behind an advance, at least originally, was to give an author money to live on while they work on the book. As you can see from the above numbers, that’s not how it typically works, in practice, anymore. Most of us are probably not going to live on $5,000 or $20,000 for the amount of time it takes us to write a book. (I guess it depends on how fast you can write a book.)
It’s also worth noting—and this is the last piece of the advance puzzle—that you don’t sign a contract and get handed a check for the amount of the advance your agent negotiated. Advances are usually paid out in halves or thirds (or more)—in fractions—on milestones as set forth in your contract. For instance, 33 percent of the advance at signing, 33 percent upon delivery of the finished manuscript, and 33 percent on publication. This is how Xiran Jay Zhao (mentioned above) at a certain point found themself with a book on the NYT bestseller list and had received a shockingly small amount of money for their work—because due to the nature of publishing schedules they had not yet received the final advance check and royalties had not yet begun to pay out.
Publishers don’t calculate royalties every day, by the way. I think many publishers do their royalties something like four times a year (quarterly) but it’s been a while since I worked at that kind of publisher. In any case, what that means in practical terms is you don’t receive $1.00 every time a copy of your book clears the point of sale, dripping into your bank account like an IV. Quarterly (or whatever schedule your publisher is on), you will receive a royalty statement letting you know how much money your book has earned for you since the last time you got a royalty statement and, if the book has already earned out the advance you were paid (or if there was no advance), that is the amount of money you will receive.
This means you certainly can find yourself in a dry spell (income-wise) between when the last payment of your advance arrives (for instance, at the time of publication) until you begin to receive royalties. The earliest you would receive a royalty payment would be the next time your publisher tallies royalties (4 months? More? Fewer?) and unless those royalties exceed your advance, you won’t receive any proceeds from the sale of your book until potentially the next royalty reckoning (again, if your book earns out during that time).
All this is to say, signing your name to that first-book contract is most likely not the day you retire from your pre-writing career and become a full-time, self-supporting writer. It probably will take a handful of days like that.
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