Why You Need to Know the Basics of Book Contracts — Part 2: Show Me The Money

It’s not just $X advance times Y% royalty rate — it’s a balancing act


Photo by Vitaly Taranov on Unsplash

This second article on book contracts is going to deal with the money, or in other words, what you are likely to get paid when you have book accepted for publication, and what you might expect (vs what you might hope for). First article is here — read first if you can.

Warning: I am not a lawyer or an agent, so what I say here is not legal advice. It’s knowledge and experience from 25+ years of book contracts, and too many writers are ignorant of things that could cost them a lot. Or even everything.

Many people (not just writers) don’t realize that the advance you receive when you sign a book contract is exactly that — an advance on future earnings. So if you receive a $2000 advance for your book, you won’t receive another cent until the publisher has sold enough books to cover your advance.

Thus, if your book is selling for $20 (as an example, for easy math), and your royalty is 10%, that means you will receive — on paper — $2 for every book sold. Your publisher would need to sell a thousand copies of your book for you to “earn out” your advance. If the book is still selling, you will start receiving royalty payments.

RRP — what is it?

The above example is based on Recommended Retail Price. Theoretically, this is what your book will sell for in most bookshops. However, if your publisher does a deal with BigBookChain X to sell them 1000 copies at deep discount, that might mean instead of you receiving $2 each for that 1000 copies, you might only receive 80 cents. So instead of $2000, you’ll get $800. (You may or may not see deep discount mentioned in your contract.)

Your sales will look better, but you are a bit further from earning out. You will very likely have a different rate of royalty for the e-book version of your book. Instead of selling for $20 as print, the e-book might be selling for $4.99.

So while your contract might say that you will get 30% royalty for each e-book sold, that actually means just over $1.49. And if your publisher does a special promotion of your e-book for 99…



Sherryl Clark - writer, editor, poet.

Writer, editor, book lover — I've published many children's books and three crime novels for adults so far. I edit other people's fiction and poetry.