How Authors Make Money

Think you know how writers make money? Frankly, you might know some of them, but Nathan Bansford, author of the  Jacob Wonderbar series absolutely nails it, and certainly opened this TVWriter™ minion’s eyes wider than I ever would have thought possible.

by Nathan Bransford

Yes, yes, we all want to write books that move people and change the world. But, uh, how exactly do authors get paid? Read on, friends. Here’s how authors make money.

In this post I’m going to cover all the different ways authors make money from their books:

  • Traditional publishing
    • Advances
    • Royalties
    • Subrights (through a publisher)
    • Subrights (direct)
  • Self- and hybrid publishing
    • Direct distribution
    • E-book distributors
    • Hybrid publishers

Note that this won’t cover other ancillary ways writers may make money like “freelance gigs” and “scrounging for spare change in the couch at your parents’ house.” It’s going to focus on the books part.

How authors make money through traditional publishing

Before we get to fun things like advances and royalties, let’s start with a word about literary agents.

In order to secure traditional publication, chances are an author will need to find a literary agent. Agents do not charge authors until their work is sold, except for ancillary expenses like photocopying and postage.

When an agent sells a book or other rights on behalf of the author, they receive 15% of the proceeds in perpetuity in the case of domestic rights, and 20% of the proceeds for foreign rights, which is split 10% between a primary agent and 10% between the subagent.

So when you’re doing your book economics calculations, be sure and lop 15% off the top if you work with an agent (which, you should. They earn that commission).

How book advances work

When a book publisher is interested in a book project, they will offer the author an “advance,” which is a sum of money in exchange for the right to publish the book. (Here’s more on publishing contract terms).

An advance is the author’s to keep regardless of how many copies the book sells, as long as the author fulfills the terms of the publishing contract….

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