Money, Money, Money: The Financial Facts of Writing

There are people who have money and people who are rich.

– Coco Chanel

Celebrity authors like J.K. Rowling and Stephen King may mislead some people into thinking that writing books is a lucrative business, but only the most fortunate authors can afford to write full-time. It’s not to say that authors don’t make money, but writing is largely a labor of love.

How do I make money writing in the world of traditional publishing? Can I live off of my writing? How much does professional writing cost me? Allow me to offer some insight if these questions are on your mind!

 

I wrote a book—show me the money!

In the world of traditional publishing, you have a few more steps before you get to the paycheck, including submitting queries to publishers or contacting agents to represent your work. Let’s say you’ve done all that. What can you expect on the financial side?

Authors usually receive an advance when a publishing house signs them. Upon the publisher’s acquiring a title, the professional team will determine what their budget will be for a book—things like how many copies will be printed, whether it’ll be hardcover or paperback, what kind of marketing and publicity will go into a project, etc.—and gauge what profit they expect to make. A famous author with a solid fan base will get a higher budget because the house knows it will make its money back; newer authors will usually have less budget but enough of a platform to grow.

When the publishing team figures out what they’re going to spend on a book, they determine how much of an advance they will pay to the author. Let’s say an author gets a $1000 advance on a book. The first $1000 worth of royalties that his or her book makes go back to the publishing house to reimburse that advance, and after it’s been paid back, the royalty checks start coming in for authors.

Royalties are the author’s cut of every book sold. It’s usually between 5-10%, so if a book costs $10, the author might make $1. It may seem like the book’s creator isn’t getting as much as s/he deserves, but bear in mind that the remaining $9 is split among many other people.

The bookseller who provides the sold copy gets a cut, which goes towards paying employees, maintaining bookstore space, purchasing new inventory, etc. The publisher also gets a cut, which goes towards the editors, copyeditors, proofreaders, production editors, marketing, publicity, sales, business, etc. Bigger companies can have upwards of 20 people working on just one book! If those 20 people are splitting $5-6 of every title sold…well, it doesn’t seem so unreasonable, does it?

Authors get to keep that advance even if the book doesn’t make back the amount quickly—or ever. It can hurt an author’s chances of working with that publisher again if their work can’t make money, but if authors turn out to sell well, their next royalties will often be higher. As long as their books stay in print, authors can continue getting checks in the mail. Royalties come from hardcovers, paperbacks, and e-books.

New writers, don’t expect to go into your first contract and get a $10,000 deal—but that’s not to say you won’t be cashing those kinds of checks one day. Other possible sources of income for your writing can come from the more journalistic side, such as being a compensated contributor to magazines or newspapers; writing contests; and creative contributions to literary magazines and journals that pay for work.

 

OK, cool, so can I live off of my writing?

That’s really up to you! I would advise against quitting your job before your book has even hit bookstore shelves, but if you’re able to steadily publish writing that sells and feel that your profits sustain you, make the choice that feels right for you.

Be sure to discuss your options with your family, significant others, etc. For a lot of people, it may not be financially possible to live off of writing. If this is you, you’re in the majority! Doesn’t mean it can’t be a sweet second job, of course. Getting paid to do what you love is the best feeling.

 

What about indie publishing?

Self-publishing used to (and in some circles, still does) have the alternate moniker “vanity press.” It’s become much easier for authors to put their work up independently, though, and with freelance editors, designers, etc., indie book quality isn’t necessarily bad. Self-published authors make most, if not all, of the profits from their book sales, especially with digital books that require less production costs.

Though royalties are higher, going the route of self-pub over traditional publishing houses means authors don’t have the benefits of in-house editorial, production, design, marketing, or publicity teams, nor the reputation of the publisher and prominence in bookstores. Freelancers are certainly available, but they come at the out-of-pocket expense for the author.

With self-published books, readers are also often less likely to spend what they would on a traditionally-published book, which comes with the understanding that agents, editors, etc., have screened and approved this title from the masses of manuscripts. Selling self-pubbed e-books at $2 or $3 a pop, indie authors may take longer to reach $1000 than that traditionally-published author reimbursing a royalty at $1 per sell.

 

So, what does all this cost?

Traditional publishing shouldn’t cost the author a whole lot. Most literary agents don’t get paid until they sell your book to a publishing house, and with all the connections and special attention an agent gets, they’re well worth their cut of the profits. Likewise, authors shouldn’t be paying for a publishing house to edit, design, or market their books. There isn’t as quick a turnaround—a book could be in editorial or production for upwards of a year—but the final product is polished and ready for mainstream sales.

Self-publishing may be pricier. As explained above, if a self-pub author chooses to have his or her work edited, designed, etc., the cost of freelance work comes out of pocket. Any publicity that requires payment comes from the author. Whatever medium the author uses to self-publish takes a cut of the profits from each book sold, like a fee for hosting the book. Authors get to make back most of the profits for themselves, so if you do a champion job of marketing, the extra expenses may not be as bad.

 

Writers aren’t usually known for our fondness of math, but finances are numbers everyone should be aware of. Remember to look at your options, carefully consider all aspects, and make the choices that suit you best.

 

Happy writing!

xo P

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