Behind Oz’s Curtain: How Authors Get Paid (and a #GC)

Someone made a joking comment on one of my FB posts last week about how traditionally published authors are rolling in money. He WAS joking…but it made me think that there really are a lot of misconceptions about how authors make money and how much money authors make.

The answers vary wildly, of course. Those in the rarified air of million-dollar book deals are off in their own rarified little world. We’ll ignore them and look at the average genre author, what used to be called a “mid-lister,” which translates as “sells enough books to stay published but not enough to be a best-seller.” The “mid-lister” term isn’t very relevant anymore because the gap in between the hobbyist author and the best-seller is rapidly morphing from “mid-lister” to “hybrid author.” But I’m getting ahead of myself here.

In its simplest terms, there are three avenues to publishing these days: traditional, small-press, and “indie,” or self-publishing. (“Vanity publishing,” in which authors pay someone to print their books, is, in my mind, not really publishing and if you know anyone who’s doing that, tell them to stop–LOL.)

Traditional publishing generally means that your books are published by one of the Big Five publishers out of New York. The “Big Five” are Penguin Random House, Simon & Schuster, Hachette, HarperCollins, and Macmillan. Each of those big companies has numerous imprints. Macmillan, for example, owns Tor, Forge, Henry Holt, and St. Martin’s Press, among others, so the Sentinels series is published by Tor/Macmillan.

When a traditional publisher acquires a book from an author, almost always through a literary agent, the author is paid an advance, generally based on what the publisher’s marketing experts think the book will earn when it’s published. Advances have been dwindling in the past decade, but just for ease of mathematics, let’s say the author gets a $12,000 advance for a book. Subtract about 15 percent for the agent’s commission, and you’re left with $10,200. The author gets a third of that, or $3,400, when the contract is signed. When the book has completed edits and gone into production—often as much as a year later—the author gets another $3,400. When the book is published, the author gets the final $3,400. So, if the publisher takes two years to publish a book, the author is essentially making about $5,000 a year, minus taxes. Hard to live on that, right? So why publish with a traditional publisher? You get the top-flight editor and copyeditor and proofreader and cover artist. It’s good exposure. And sometimes–not that often, but sometimes–an author will break away from the pack and go big.

What about royalties? With any publisher that pays an advance, the author does not earn any royalties until the publisher has earned back its advance money from the author’s cut. Afterward, the author earns on average 8 percent of the net price of print copies after bookstore returns, paid twice a year. The average royalty rate on ebooks is higher, about 25 percent, but the ebook sale price is also lower, so the author’s payout is about the same. However, many (maybe even most) traditionally published Big Five authors don’t earn anything from their books beyond the advance.

Small-press publishers offer some of the advantages of the Big Five—professional editing, cover design and professional production—but often without any advance. They tend to focus primarily on low-cost ebooks, and the author royalty rate averages 30-40 percent. Authors are paid more frequently—often monthly. These publishers might or might not offer much on the promotion side of things (which is also true of the Big Five). So 40 percent of a $2.99 book means the author earns about $1.19 for each book sold.

(An outlier that in many ways offers the best of both worlds is Amazon Publishing, the traditional publishing arm of Amazon, with imprints that include Montlake, 47North, Skyscape, and Thomas & Mercer. They offer the advantages of the Big Five, with advances and professional production, with the slightly higher royalty rates and monthly payments of a small publisher. Disadvantages: the ebooks are available only for Kindle, the New York Times and other media outlets won’t include their books in their “best-seller” lists, and they aren’t offered in brick-and-mortar stores…of which there aren’t that many anymore. Full disclosure: This is hardly an unbiased opinion, as my Susannah Sandlin books are published by Montlake.)

That leaves us, finally, with self-publishing, where authors control everything from the editing to the cover design to the distribution. On the plus side, the authors have a lot of flexibility to price their books as they wish, run sales, and earn royalties up to 70 percent on each book. They control their careers. On the negative side, the more time they spend on production and business and promotion, the less time authors have to write–or the more money they must spend up front to hire others to do some of those things. And without a lot of books available, some marketing savvy, and/or an existing fan base, it’s hard to find a steady readership–but not impossible. I know quite a few authors who feel lucky to earn $25 a month on their self-published books, and I know authors who’ve been able to buy retirement homes on their self-published books. Quite a lot of authors are making a living wage, especially after they get multiple books under their belts. Many traditionally published authors are broadening their repertoire–and really expanding their income–by keeping feet in both worlds. So the big stuff happens in the self-pub world….just not that often, and it’s not an easy road.

Bottom line? None of the roads are easy, and success is a crapshoot. Conventional wisdom these days, when publishing is in such flux, is that the smart authors have their eggs spread across several baskets. They have the self-published books in the hopes of creating a monthly income stream and the traditionals for exposure and building a readership that will follow them to their self-published works. A lot of authors also have side businesses. Some format books for others, or teach workshops (raises hand), or design book covers. They leverage their strengths to bring in supplemental income. After next April, if you need a good copyeditor? Shoot me an email!

So that’s it, in a nutshell. Bottom line: it’s very hard for an author to make a living wage writing books, especially until she has a lot of books under her belt. A great many genre authors either have day jobs or are stay-at-home parents with a working spouse who handles most of the household bills. When I leave my day job at the end of next April, I’d like to say it was because my books will support me in the lifestyle to which I’ve become accustomed, but I’d be lying. Maybe they WILL–I hope so–but I’m leaving the day job because I’ve been blessed to work in an industry that has provided me the opportunity to retire quite early with a small income. It’s not a lot, but it’s hopefully enough to pay the mortgage and allow a frugal life with lots of writing time.

Because, you know, Jean Lafitte has plans….

So, any surprises here? Any questions? Leave a question or comment for a chance to be entered for a $5 Amazon gift card.

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About Suzanne Johnson

Author of urban and paranormal fantasy and romantic suspense, currently living in Auburn, Alabama. Author of the Sentinels of New Orleans series (Royal Street; River Road: Elysian Fields, Pirate's Alley, and Belle Chasse (Nov 2016). Writing as Susannah Sandlin, she is the author of the Penton Legacy series (Redemption; Absolution; Omega; Storm Force; Allegiance); The Collectors series (Lovely, Dark, and Deep; Deadly, Calm, and Cold); and the upcoming Wilds of the Bayou series (Book 1, Wild Man's Curse) releases April 2016).

28 thoughts on “Behind Oz’s Curtain: How Authors Get Paid (and a #GC)

  1. I knew authors usually don’t make a lot but .i didn’t know it was that little. I hope Black Diamond sells well for you.

  2. Writers just don’t make enough for bringing us their world in books. I’m thinking a side job, selling Black Diamond in little plastic bags, wait that might be illegal…

  3. Thank you for a look inside the business side of writing. Sometimes you think an author is just rolling in money, but I know that is seldom the case.
    By the way, I’m reading The After Party, by Anton DiSclafani. Her bio says she teaches at Auburn. Do you know her? Because I’m sure there are only a few teachers at Auburn. HA-HA!

  4. Knowing a little bit about the costs involved when you self publish I can understand why some authors would want the safety of traditional publishers. I hope Black Diamond takes off and earns you lots of money

  5. Always interested in the business aspect of writing. I can see how being a hybrid author might be the best blend in this climate. Hope Black Diamond is a raging success!

  6. i don’t think i would have teh courage to take such a risk so thank you even more for giving us all these fantastic books when it’s that’s difficult!

    • It’s definitely a risk to retire before I’m old enough to get any govt benefits, but my education fund gives me a little cushion, and I’m going to have to cut expenses waaaay back. And write more books!

    • That’s just for ebooks, of course. Unlike print, once an ebook is formatted and edited and that money’s made back, it’s pure profit because there’s no physical product. Then again, the prices are usually lower, so that 30-40 percent is about the same amount of money as 8-10% on a physical book that’s more expensive. It’s an accounting nightmare–LOL.

  7. You are braver than I. It sounds crazy to even try to be an author, how do any survive? Then I go back and reread your books and wish you had more. 🙂

    • LOL. Well, it has its own rewards that aren’t financial. Having a job you truly love helps….but the income has to follow at some point if it’s going to be anything other than a hobby. Definitely a risk, but one worth taking. Once I’m not spending 50-plus hours a week at the day job, I should have more books!

    • That’s why authors get so upset over book-pirating sites. I found one the other day that showed more than two thousand downloads of one of my Penton books….which is about a dollar a book I did not make. Jean Lafitte is the ONLY pirate I like!

  8. Wow, being a writer definitely isn’t easy! This was really interesting to read- I have dreams of writing a book- but I guess I should focus on studying in med school first, and who knows, maybe actually finish a book in the future 🙂

    • Get the degree first but don’t give up the writing dream–it’s a really fulfilling and wonderful feeling to use words to make all those people and stories in your head come to life!

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