Book Publishing - How to Collect Royalties

How to create royalties: An attempt to simplify and offer you a bird’s eye view on the subject of royalties for a first-time or young author.

For a writer, the economics of a book may be just as exciting as writing one. Particularly for newbies into the world of publishing, the terms “royalties” and “advance” are something they have heard of but are not aware of the intricacies, and would want to know about them. How does the royalty issue pan out? How does the author tackle royalties? Publishing agents will entertain writers by the book’s business potential. Here is an attempt to simplify and offer you a bird’s eye view on the royalty issue.

What is royalty?

• For every book sold, the author gets a percentage of the revenue of the book
• How much this percentage will be is dependent on factors like the size of the publishing agent’s business, whether it’s a CBA or ABA House, the author’s platform and marketability, and each publisher’s criteria (of which you may never be aware).
• CBA publishers’ royalties are based on the NET price of the book i.e. the price at which the publisher sold the book to the bookstore rather than the revenue of the book as is the case with other publishers.
• The publisher may also offer an advance against royalties which is essentially a sum of money given to an author upfront with the promise of more (royalties) as sales pick up
• Royalties differ from a flat fee, where a set amount of money is given to the writer upfront and it’s his to keep. The amount does not change no matter how well the book sells. For example, if your flat fee is $8,000, the amount remains the same no matter if the book sells 20 copies or 30 million.
• Royalty is calculated by the cost of the book, terms of your contract and how the expenditure incurred to produce copies of the work. If you write a hardback novel, you may get $3/book. If you write a niche nonfiction, you may get $1/book, and if you co-write a book or work on a picture book with an illustration, the percentage of royalty you will receive will drop.

A desirable royalty option to go with

An advance against royalty is a desirable option to go with and is the most sought after choice as you get an advance and more revenue as the book sells beyond the money you have received upfront from the publisher. A huge advance would mean a large sum of guaranteed money, but a small advance would mean reasonable expectations for you to meet, and a greater chance for your book to be profitable — making you “a valuable author” in a publisher’s eyes. So, go ahead and advocate your book on your author platform, social media, at a writer conference to increase your worth in the eyes of publishers and book buyers as well. Sadly, advances are no longer easy to get. But the cheering news is that if your book sells well, there’s lots of money to be made on the back end with royalties.

You must find a literary agent who will be responsible for ensuring that the royalty statements (payments) accurately reflect proper totals that take into account sales, returns, foreign territory, sales and film rights.