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I received a nice little check from the agent today, which included the signing advance for the reprints of DARK WATER'S EMBRACE and SPEAKING STONES, as well as royalties from HOLDER OF LIGHTNING (which earned out some time ago) and also, happily, for MAGE OF CLOUDS, which has also now earned out. Yay! HEIR OF STONE is getting closer, too...
For those not familiar with the way traditional publishing works, the author is paid an advance -- a flat amount which is an "advance against royalties" (and can vary quite a lot in how small or large a payment it is). The author earns royalties on every copy sold, a percentage of the cover price of the book (typically 8% - 10%), but won't receive any of that money until the advance is paid back to the publisher (which is when the book is said to have "earned out"). Once the book has earned out, the author starts receiving the additional royalties, typically at six month intervals.
To use a simple example, let's say an author received a $5,000 advance against an $8.00 mass market paperback, at an 8% royalty rate. 8% of $8.00 is $.64. So the author will need to sell 7,813 copies of his/her book ($5,000 divided by $.64) before she/he sees any more money. If the book sells 10,000 copies, the author will eventually receive an additional $1,400 for the book: (10,000 x .64) - 5,000. More copies = more money, obviously.
And no, if the book never earns out and fails to sell enough copies to cover the advance, the author does not have to pay back the advance to the publisher. That's their risk (which is why they try, as best as they can, to keep the advance 'reasonable' for their expectations for the book.)
Interestingly, Isaac Asimov reputedly never took an advance for his books, so that he would start receiving royalties immediately. Of course, that requires total trust in the honesty of the figures your publisher is handing you...
For those not familiar with the way traditional publishing works, the author is paid an advance -- a flat amount which is an "advance against royalties" (and can vary quite a lot in how small or large a payment it is). The author earns royalties on every copy sold, a percentage of the cover price of the book (typically 8% - 10%), but won't receive any of that money until the advance is paid back to the publisher (which is when the book is said to have "earned out"). Once the book has earned out, the author starts receiving the additional royalties, typically at six month intervals.
To use a simple example, let's say an author received a $5,000 advance against an $8.00 mass market paperback, at an 8% royalty rate. 8% of $8.00 is $.64. So the author will need to sell 7,813 copies of his/her book ($5,000 divided by $.64) before she/he sees any more money. If the book sells 10,000 copies, the author will eventually receive an additional $1,400 for the book: (10,000 x .64) - 5,000. More copies = more money, obviously.
And no, if the book never earns out and fails to sell enough copies to cover the advance, the author does not have to pay back the advance to the publisher. That's their risk (which is why they try, as best as they can, to keep the advance 'reasonable' for their expectations for the book.)
Interestingly, Isaac Asimov reputedly never took an advance for his books, so that he would start receiving royalties immediately. Of course, that requires total trust in the honesty of the figures your publisher is handing you...