“Earned In Advance” and Royalties: What are they About?

Authors deserve a good pay for their creativity and hard work — that’s why royalties exist. Through book royalties and advances, authors enjoy the fruits of their labor.

Given the changes and technologies entering the scene of royalties, understanding the concept can still be tricky for some. How much should an author receive? What role do advances play in rewarding authors for their work?

Calculating Royalties

Recent innovations from companies, such as MetaComet® Systems, Inc., make calculations easier nowadays. Online royalty calculators and solutions can do the job for you. Still, it’s helpful to remember the basics.

Think of it this way: if a book comes with a price list of $10, the usual royalty rate is at 10%. The author earns a dollar with each book sold. But this is just a simplified example; published authors earn different rates according to their sales.

Advance Against Royalties

When you hear the term “book advance” between authors and publishers, this often refers to “advance against royalties.” It is traditional for publishers to give authors advances. It means they advance the payment of the author according to the amount they think the book will earn.

Numerous factors contribute to the amount: the performance of similar books in the market, the publisher’s size, the author’s record and their platform. The book’s genre also comes into play.

Book Advances and “Earning Out”

Books “earn out” the advance when the author royalties surpass the publisher’s paid advance. For example, if your book gets an advance of $5,000 and you earn royalties at a $1/book rate, you must sell 5,000 copies of the book before a publisher says you “earned it out.”

Keep in mind, however, that some publishers take a small percentage (also known as allowances) for book returns.

Book royalties and advances can be tricky. But understanding how the system works is an advantage for authors. Sufficient royalties and advances rightfully compensate authors for their hard work, which is why it’s important to learn more about it.