If you’re hoping to make a new career out of writing, the different pay structures can be baffling, and you might wonder, “How do authors get paid?”.
Fee structures vary depending on the publisher you’re working with. Also, how established you are as an author and your book genre matters all matter when it comes to receiving earnings.
Table of contents
- Why it is important to understand how authors get paid
- The real answer to how do authors make money?
- How authors are paid through traditional publishing
- How authors get paid through self-publishing
- Expert tip: Consider how you want to profit from your book
- How much does an author make per book?
- How do first-time authors make money?
- How much do authors make for a best seller?
- How much royalty do authors get per book?
- How long will an author receive royalties?
- Leverage what you now know about how authors get paid!
Bloggers, copywriters, and freelance content writers typically quote a rate, complete the work, and receive their fee. And they might charge per project, per word count, or the hours they’ve worked. But it becomes even more complex if you’re writing a book as a ghostwriter or author.
So, how do authors get paid for their hard work? This guide will tell you everything you need to know!
Why it is important to understand how authors get paid
Writing a book, especially if you’re a first-time author, may have been your dream for some time. However, you may be unsure if you can support yourself by pursuing this dream. After all, we all need money to put food on the table and pay the rent.
Whether you’re writing a book as a passion project or this is your career, you may be questioning how do authors make money. Most importantly, is being an author a lucrative career?
As an author, you need to know how profitable your book project might be. And, more importantly, how to financially support yourself through the writing process.
After all, you don’t really know how long writing a book can take. It can take months or even weeks to complete. Thus, it’s understandable to question how do authors get paid for an indefinite amount of work hours.
Fortunately, some publishers pay authors upfront for their work, allowing them to spread their payment and cover their essentials while writing.
They might also offer royalties following publication. With this method, payments could still roll in years down the line.
Your specific publisher contract will outline all the details you need to understand about your author payment. That said, be sure to check out our tips on types of publishers to avoid.
The real answer to how do authors make money?
The median annual payment for writers and authors is $73,150, or $ 35.17 per hour, according to the US Bureau of Labor Statistics. But how do authors make money to reach this total?
The answer can depend on whether an author chooses self-publishing or traditional publishing. The amount of earnings can also depend on how well the book sells.
With that said, there are several ways authors can make money:
- Fixed fees
- Royalties on retail sales
- Royalties on net receipts
- Royalties through self-publishing
- Income from literary awards
- Speaking opportunities
We’ll get into each one of these below!
How authors are paid through traditional publishing
Before considering earning money from side opportunities as a published author, let’s break down how authors receive money when working with a traditional publisher.
Authors get paid a fixed fee
An author fixed fee is where an author receives a one-off sum for their work. And regardless of how many books an author sells, this will stay the same.
Publishers often devise a fixed fee based on how many books they plan on selling. How much do authors get paid for fixed fees? Typically, fees can range from $1,000-$3,000, depending on the publisher.
Additionally, authors receive partial payments at the beginning, middle, and end of the book publishing process.
A fixed fee can be a good option if you want the security of knowing how much money you’ll receive for your work.
If you’re a first-time author dipping your toe into the industry, you may be happy with this arrangement.
Authors get paid an advance
You may have heard of a book advance but are still wondering how do authors get paid from this method. Well, a book advance is where a publisher gives the author an upfront payment, often before they’ve completed the work. The publisher then deducts this sum from any royalties (a percentage of each book sold).
So, how much do authors get paid for their advances? There are various circumstances, such as how much an agent negotiates for, the genre, the publisher’s budget, and how confident a publisher is in a book’s sales potential.
Typically, major book publishers will start with a paid advancement of about $5,000, according to wordsrated.com. Independent publishers can start a little lower at $3,000.
However, some advances can be as high as seven figures.
For example, first-time children’s author Annabel Steadman (writing as AF Steadman) received a “major” seven-figure sum from Simon & Schuster publishers.
This high amount resulted from a multi-publisher auction where several publishing houses were eager to get their hands on Steadman’s fantasy adventure series “Skandar and the Unicorn Thief.”
Authors earn royalties
Publishers may offer royalty checks to authors instead of, or as well as, an advance. Let’s talk about the most common types of royalties.
Royalties paid on retail sales
With retail royalties (or list royalties), publishers give authors a percentage of the retail price for each book sold. So, how much royalty do authors get in this scenario?
If an author has a 10% royalty rate and their book sells for $10, they will receive $1 per book. Keep in mind this process becomes more complicated if the author gets an advance upfront when signing the contract. So, they would receive royalties once they’ve paid back the advance.
If you received a $10,000 advance and your deal amounts to $1 royalty per book, you’ll need to sell 10,000 copies to pay back your advance and start raking in extra pay.
According to publishdrive.com, traditional publishers offer an average royalty rate of 5-8% for paperback publishing. For hardcover publishing, there’s an average of 15% in royalties, and with ebooks, there is a 20-25% average in royalties.
Royalties paid on net receipts
Publishers typically offer bookstores or online platforms an attractive discount of up to 50% off the book’s cover price.
And it’s becoming more common for publishers to pay royalties on net receipts, which are the profits made after the initial costs of publishing the book. When this happens, publishers calculate the royalty percentage only after accounting for the discounts they give to retail stores.
So, how much royalty do authors get based on net receipts? Publishers only pay a percentage of the amount received after deducting all discounts.
However, authors usually have a higher royalty fee under the net receipts model than the retail sales model.
For example, imagine your book sells for $10. If the publisher offers a 50% discount to the bookstore, they now have $5 left per book.
From here, if you receive a 20% royalty fee, you’ll still receive your $1 royalty fee, putting you in the exact same position as if you were receiving 10% on a retail sales basis.
The bottom line on royalties: each traditional publisher has a different way of approaching royalties. So the answer to “How do authors get paid in royalties?” depends on the publisher’s discount, the royalty model, the bookstore, and other factors.
It’s important to know that royalty percentages can look different with self-publishing.
Authors earn money with profit-sharing
Profit sharing is another solution to how do authors get paid. Usually offered by smaller publishers, the idea is simple.
The publisher pays the author a high percentage of the book’s profits after covering all their other costs. These include printing, marketing, and overheads.
Profit sharing might be an excellent option if you’re confident in your book’s sales potential. It’s worth noting that publishers don’t usually offer author advances in this type of deal. However, once the initial costs are covered, authors can earn between 40-60% through royalties.
How authors get paid through self-publishing
When an author publishes through a self-publishing company, they earn money through royalties from their book sales.
Self-publishing can offer a higher royalty percentage than traditional publishing, depending on the platform. Amazon Kindle Direct Publishing, one of the biggest sellers of ebooks, offers a royalty percentage of 70% for books sold between $2.99 and $9.99. For books less than $2.99 or over $9.99, they offer a 35% royalty rate.
Apply Books and Google Play offer 70% royalties. Barnes and Noble also offer 70% for ebooks and 55% for printed books. Kobo, another popular self-publishing platform, provides a 45% royalty for books priced below $2.99 and 70% for books priced above.
Authors can make money from literary awards
You may also have heard that notable literary prizes can be profitable, too. So, how do authors get paid from these literary awards? If your book is on the shortlist for a prize, it’s possible to earn the big bucks.
For example, Margaret Atwood wrote the bestseller “The Handmaid’s Tale,” which won the Governor General’s Award for English language fiction.
The cash prize for this accolade was $25,000, which is a hefty sum. If you’re lucky enough to win the Nobel Prize for Literature, you’re looking at a haul of over $1 million.
Authors make money from speaking opportunities
Writers can also make money from speaking opportunities as published authors. How do authors get paid for speaking opportunities? Typical authors present their experience to other writers, literary agents, and publishers in the industry.
For newer authors, in the beginning, they can earn around $300-$1000 per event. Authors that are well known and earn more than $10,000 for a single event.
Along with the fee for participating, this valuable exposure can be a real career booster, regardless of the size of the event. Speaking events are a great way to promote your book or sell other merchandise, such as t-shirts and mugs. It’s also a great time to promote a second book if you consider writing another.
A small niche seminar packed with your target audience could open more doors than a sell-out conference where you only get five minutes on stage.
Expert tip: Consider how you want to profit from your bookIf you’re an author looking to profit from selling your book, consider both traditional or self-publishing and what will work best for you.
Self-publishing can offer limitless profit potential but will require upfront work and promotion. Traditional publishing can guarantee a set amount upfront in the form of a royalty.
Decide which route is best depending on the financial goals you have for your book.
How much does an author make per book?
How much an author makes per book depends on the royalty percentage of either a traditional publisher or a self-publishing company. First-time authors typically start on the low end of royalties at about 8%. For instance, a book is selling for $12.99, means an author will earn about $1.03 per book.
However, if the book ends up being a best seller, royalties can increase to 15%. For self-publishing, the average is around 70%, and royalties for books selling at $9.99 come to about $6.99.
How do first-time authors make money?
First-time authors can make money by working with a traditional publisher to sell their books or through self-publishing. Working with a publisher can sometimes mean receiving an advance payment or a fixed fee, usually around $1000-$10,000.
Self-publishing, on the other hand, produces money through the direct sales of books through various self-publishing platforms. First-time authors receive a percentage of the book sales.
How much do authors make for a best seller?
To become an author with a bestseller, you must sell a certain number of books to get on a list such as the New York Times Bestseller list or the best sellers list of the Washington Post. Amazon also has a bestseller list.
After selling multiple best-selling books, bestselling authors such as Stephen King, James Patterson, and J.K. Rowling have made between $50 to $70 million.
So, if lesser-known authors sell multiple books on the best sellers list, they can earn up to six figures or more.
How much royalty do authors get per book?
A book’s publication process determines the amount of royalties an author can receive. Most traditional publishers offer an average royalty rate of 5-8% for paperback publishing. For hardcover publishing, there’s an average of 12-15% in royalties, and with ebooks, there is a 20-25% average in royalties.
With self-publishing vs traditional publishing, the average royalty rate is 70%, depending on the book’s price.
How long will an author receive royalties?
Royalty payments from traditional publishers typically last for the length of the copyright of the book, which includes the life of the author plus 70 years after their death. That said, authors may receive royalties for the length of the the terms written in their contract.
For self-published books, royalties are paid as long as your book continues to be purchased.
Related articles on being author
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Leverage what you now know about how authors get paid!
As you’ve seen, there’s no simple answer to the question, “How much do authors get paid?”
Self-publishing produces money through royalties. Traditional publishing includes one-off fees, advances, royalties, and profit sharing. If you go the traditional route, it may be helpful to work with a literary agent to help you negotiate different prices and fees.
There isn’t an overall right or wrong way to earn money for the work you produce; it all depends on your situation.
The best advice we can give you is to always read your contract’s terms and conditions to know what you’ve agreed to before signing up with a publisher.