The Author World: How It Works

Many times when I’m talking with folks who are not authors and have no connection to the world of publishing (other than reading – but, yay you readers!) I realize that the arcane publishing model is not understood. This isn’t surprising (note the word “arcane”). For one thing, most lay people think authors are rich, and sadly that’s not the case. I thought I’d write a little primer here to help the lay person through our confusing model of writing/selling/making a living.

The Traditional Model

This author at a book launch.

There are five major publishing houses in the U.S. today: Hachette, Harper Collins, MacMillan, Penguin Random House, and Simon and Schuster. Within each house is a number of imprints and divisions. There is an unspecified number of smaller publishers that specialize in different kinds of books. Collectively these are known as “traditional publishers”, and authors would prefer to sell a book to these houses because (a) they pay the author, (b) they support the author with marketing and publicity, (c) they deal with art (both interior and cover), layout and design, and (d) they make the book widely available to booksellers through distributors and catalogues. Plus, they come with a certain cachet.

Most traditionally-published authors today have agents who negotiate contracts on the author’s behalf and know which editors at which houses are looking for what kind of manuscript. Thus, an author wishing to be traditionally-published usually will first need to find and woo an agent. Agents are also specialists, with interests in children’s or adult books, and may even be particularly interested in, say, only working with picture book authors. Many agents are “editorial” meaning that, after they sign the author as a client, they will work with that author to polish manuscripts before submitting to editors at publishing houses.

Here comes the arcane part.

When an agent sells a manuscript to a publishing house and the contract has been negotiated and delivered, the author usually (though not always) receives what is called an “advance”. An advance is really an “advance on royalties” (royalties are the author’s percentage of money earned when books sell in the bookstore). What this means is that the publisher is giving money to the author not free and clear but under the assumption that enough books will sell so that this “advance” is paid back to the publisher – after which earned royalties do go to the author. Royalty calculations are incredibly complicated but result in most authors earning a tiny percentage (like 5%) of the book’s sell price. That means that if a book sells for $20, the author will receive $1.00 in royalties, which will be either applied to the advance or sent to the author if the book has “earned out”.

Got it? I know. Confusing.

Here’s where it gets really sad. First, most advances are small. As in, several thousand dollars tops. Only a handful of authors earn big advances (say, five to six figures or more). Advances are not paid out at once on signing; the first part of the advance is paid on signing, the second on delivery of the early revised draft of the manuscript, the third when the manuscript goes to copy edits, and the final payment on publication. This process can and often does take up to two years, spreading a small advance over a long time.

Second, many books don’t “earn out” their advances, which results in an unhappy publisher which then results in an author who may not be welcome to publish with them again.

Third, most books don’t sell for their retail price, but at bargain prices. We’ve all bought them, on sale, on the bargain table, on line. When they do sell at bargain, the author’s cut goes down proportionally.

At an event – sometimes only a few people show up but that’s okay!

Fourth, book piracy is rampant – and every time someone downloads a “free” book, the author loses potential income as well as street cred with the publisher.

The “Indie” Model

Electronic publishing has opened the door to anyone who wants to publish a book independently, sans agent or publishing house. This is a very attractive option because while there is no advance (nor other support), the author keeps a much larger percentage (like 75%) of the book’s list price. However, most self-published e-books sell very poorly (i.e., several hundred copies), especially if the author doesn’t devote a considerable amount of time and energy to marketing. The romance and crime book titles do best in this model because readers read them quickly and are hungry for the next book.

Now perhaps you can see why most authors aren’t rich. In fact, surveys by The Author’s Guild and others indicate that most authors are not making a living wage and must rely on supplemental income. For children’s authors, much supplemental income comes from giving paid school visits.

You can help your favorite authors by…

  • buying their books or asking your library to stock a book
  • reviewing books on Amazon and/or Goodreads (even a brief review helps)
  • never downloading free books
  • not asking authors to give you books or give free school visits.

We thank you for reading and also for understanding!



5 Responses to “The Author World: How It Works”

  1. Sheri Larsen

    Hi Janet!
    I can add another twist to the traditional model of publishing from my personal experience. I debuted through a small publisher with my middle grade novel Motley Education. A year later, my first young adult novel was released by a different small publisher. Unfortunately, my middle grade publisher recently decided to close its doors, leaving my MG novel homeless. When this happens to an author and his/her book, most often the book either never sees the light of day again or the author decides to go the Indie route and self-pub. *Publishers rarely choose to represent a book that has been previously published; it’s just not what they do.* In my case, I was extremely fortunate that my YA publisher decided to pick up my MG novel as well as offer me a deal to publish a second book in the MG series. (*All of this is pretty recent, so neither book is out yet.) But, for your readers, this is just another curve in the world of publishing. 🙂

    Thank you for writing this up! Knowledge is power. S~

    • Janet

      Wow, Sheri – thanks so much for this informative addition. I’m so happy you ended up with a positive outcome!

  2. Natasha Wing

    About those advances. I have been publishing for 27 years and can attest to the advances pretty much staying the same – FOR 27 YEARS. In most professions, people get raises or COLA increases. I am lucky that one publisher has increased my advances, but if you get $5,000 for an advance, then one would have to sell 7 books a year to make a marginal income of $35,000. And that’s pretty rare to sell that many books in a year. People say that it’s the accumulation of titles being in print that earns you more, but then some titles go out of print and your earning potential ends. The other thing that baffles me is why it’s so hard for publishers to sell 5,000 copies of a book when there are millions of people throughout the world that have the purchasing power. Are authors and publishers giving too much away? Is marketing inefficient? Are there too many choices? Just wondering.

    • Janet

      Great questions, Natasha, and great observations. I wonder whether some of the trouble begins with piracy – when you can get a book for free, why pay? And when Amazon sells books that are not being sold from the publisher but a secondary source, we also get nothing. But I would also say that marketing is sketchy – sometimes your publisher will work on your behalf and sometimes not. It’s really a strange business model, when it comes right down to it. Thanks for your reply.