an author getting paid for his work

How Do Authors Get Paid

An author doesn’t get a salary for writing a book. But once the author gets it published, either through a traditional publishing house or by self-publishing, there are ways for them to earn. This article covers ways authors get paid.

A self-published author will have to pay upfront costs to publish his work (i.e., professional fees for editors and designers) and any applicable platform fees for selling the book. Whatever is left after the costs are deducted from the selling price is profit, so the higher the price of the book and the lower the costs are, the more he earns. The setup is quite simple.

On the other hand, earning from a traditionally-published book is more complex.

Book publishers decide the retail price of a book, and they offer a discount of 50% or more to their distributors and retailers. In between these, how do authors get paid from publishing houses?

How Traditionally-Published Authors Get Paid

The First Payment: Advance

Under the contract, the author will usually be paid an \”advance\” of an upfront sum. It is a non-refundable amount paid by the publisher to the author in anticipation of royalty earnings.

In case the book does not sell as much as the advance payment, the author is not required to pay back the loss. However, if it sells more, the author can get a percentage from the earnings after the advance is offset.

Advances are usually paid to the author before the publisher accepts the manuscript.

What Are Royalty Earnings?

The royalty earnings depend upon the royalty rate, which is the percentage that a publisher pays for the right to publish an author\’s book. Usually, a publisher will offer an author a 15% to 30% royalty rate. However, if the author is a celebrity or the book has a large potential audience, the publisher might offer as much as 40% or 50%.

Usually, royalties are calculated on the net receipts of a book.

What Are Net Receipts?

In most cases, authors are paid on a percentage of the ‘publisher’s receipts’ (the amount that the retailers pay the publisher) and not on a percentage of the retail price. In short, the author gets only a percentage of what’s left after the retailer discount is deducted. If the retailers ask for a higher discount, the author royalty shrinks.

The Other Type of Payment: Fixed Payment

For multi-contributor works and specialist non-fiction books, it is common for authors to be paid a fixed fee regardless of how many copies of the book are sold. After the initial payment, there would no longer be additional payments.

How do Self-Published Authors Make Money?

Often, a self-published author would hire a professional editor to edit the manuscript, an illustrator or graphic designer to make the book content look appealing, and a cover designer to create the cover. Sometimes, he would also need to hire a marketer or a marketing agency to promote his book.

If he is selling on platforms such as Amazon, he also needs to pay a percentage of the book sales. If he is selling physical copies, he also needs to pay for the printing.

Therefore, his earnings will be computed after all the costs are covered.

If you have some or all of the skills required to publish a book, you won’t have to pay as much to launch your book.

How much money do self-published authors make on ebooks?

Even though it is possible to write and publish an ebook with no out-of-pocket costs, most self-publishing authors invest capital to increase sales. Similar to traditional publishing—page layout, cover design, and writing quality can make or break a sale.

Reviews are one of the most crucial factors for people looking to purchase books online. Therefore, investing in creating a book that satisfies readers can be worth it. However, even after the initial investment, selling ebooks can still be a very lucrative business.

The first step in selling your book is choosing the right platform. There are many platforms for selling ebooks, including Amazon Kindle, Apple iBookstore, Barnes & Noble, Kobo, and Google Play. 

The author is given a percentage that is calculated based on the book price after a digital file delivery charge is deducted. Here’s a formula to compute ebook earnings:

(Retail Price – File Delivery Fee) x Platform Royalty Rate = Royalty Earnings

How much money do authors make per book on Amazon?

Authors cannot ignore that Amazon dominates 80% of the ebook market. Amazon has a multi-layered publishing agreement that should be read with care. Authors have to agree to give Amazon exclusive distribution rights to their book in exchange for access to a preferred marketplace and participation in the Kindle Lending Library.

On Amazon, your royalty rate is 70% if your book costs $2.99 to $9.99 or 35% if your book retails at $0.01 to $2.98. Also, in some countries, unless you enroll your book in the Kindle Direct Publishing Select Program, Amazon will give you only 35% of royalties regardless of the price of your book.

There are the Kindle Lending and Kindle Unlimited programs too. These programs allow authors to get paid for the number of pages read, instead of the number of books sold. Both programs are opt-in, meaning authors have the option to participate or not. 

Amazon also offers CreateSpace for those who want to sell paperback copies of their book in physical bookstores. According to the CreateSpace agreement, authors will be charged Amazon\’s commission of 40-60% per copy sold, a per-page cost, and a fixed fee.

Traditionally Published vs. Self-Published Author Income

There are a lot of factors that can affect the amount of money an author makes in a year. We could all wish to earn as much as Stephen King or J.K. Rowling does, but no two authors will earn the same. Every author will have different earning potential, depending on how hard they work, their talent, their marketing skills, and their luck. This is true whether you are traditionally published or self-published.

A lot will say that getting published traditionally will guarantee you that you will earn money since you get to keep your advance no matter what. Plus, you have the opportunity to earn royalties after your advance gets offset.  While in self-publishing, it\’s sort of like a side hustle. You can end up earning nothing at all, even after all the hard work, if you don\’t get to sell any copy.

While that may be true, self-published authors also have the potential to earn a lot. Some authors have reported earning over a hundred thousand dollars per year from their self-published books. A self-published author can make a decent amount of money depending on how much time and effort he invests into his work. In short, the sky is the limit. Cliche, but true.

So which one should you choose? To be frank, it really depends on you. But here are some factors you can consider when deciding.

The Cost of Traditional Publishing vs. Self-Publishing

Even though traditional publishing is often thought to be free, and thus, a \”financially-wiser\” option, in reality—there are also huge costs necessary before a writer can get a publishing house to publish his book.

Do you think finding an agent is free? Unless you already have connections, it’s not easy bumping into one. For example, it costs $399.50 annually for you to have access to key literary agents for your genre at LiteraryMarketPlace.com. Then, you’d still have to reach out to them and pitch your book ideas. 

Okay, so let’s say you don’t go that route. Instead, try your shot at finding an agent through other means like going to educational workshops and seminars or traveling to writers’ conferences. That also costs time and money (transportation fees, accommodation costs, event tickets, etc.). And you don’t go to just one or two of those. You need to go to a lot and to places beyond your city or state (and perhaps even outside your country), in hopes of finding an agent or a publisher willing to give you a book deal.

On the other hand, as a self-publishing author, you may need to pay professionals to help you get your book published. As mentioned earlier, these may include an editor, a book cover designer, a content layout designer, and a marketer. Costs vary dramatically, from really cheap to really expensive, depending on who you hire. There is a lot of room for flexibility here though, and you can even do some of them instead of paying for someone else.

The Time it Takes to Publish Traditionally vs. Self-Publishing

Traditional publishers want to make money on the books they publish, not on the authors. They need to make a profit on their investment in a book. They also need to make enough to pay the author royalties for each copy sold, cover the cost of printing and binding, and make a profit on the back end for marketing and distribution. This is a big financial challenge and it\’s why it won’t be easy to find a publisher who would be so easily willing to invest in your book. This is also why it would typically cost you much of your time pitching.

Do you know the average time it takes for an author to pitch his book idea to finally get it published traditionally? It takes 24 months, yes, two long years (that is if there’s a publisher who’d be willing to publish your book). And that’s just the average.

What about self-publishing?

On the contrary, a self-published author can publish his book immediately once his book is ready. Imagine two years’ worth of sales lost if you published traditionally.

The fastest way to make money with your book is to make it available for sale online, either through your website or on one of the many self-publishing sites. If you sell your books on your own website, there are no middlemen (the people making money from your work) getting in the way and taking their cut of the profits. If you use online marketplaces (such as Amazon), on the other hand, you will be paying a percentage of your sales, but it isn\’t as much as when publishing houses sell your book.

The time it takes to publish traditionally and the financial burden it can place on an author is a HUGE reason why self-published authors can make more money than traditionally published authors.

What if You’re Not Making the Amount of Money You Want as an Author?

Market Your Own Book

It can be hard to stand out from the competition these days because of the emergence of more and more writers every day. Authors are now expected to market their own books more than ever, whether they were published by a traditional house or self-published.

What does this mean for authors? A lot more work, but it also means that there are more opportunities for authors to be discovered. 

Book Marketing Ideas That Work

Here are some marketing ideas proved to make more book sales.

Build a website for your book

A website is a great way to market your book and increase the visibility of your work. Not only can it help promote your book and provide additional information for readers, but it can also generate leads and sell books in the process.

If you already have your own professional website, you can create a subdomain or a landing page for your book if you are not keen on building an entirely new web domain for your book. The most important thing here is that your book has a “home” or an “address.” 

It would be hard to promote your book if there is no place to know more about it.

Create a Facebook group or fan page

Facebook has more than 2.6 billion active users worldwide. Having a Facebook group or fan page is a great way to spread the word about your book and your expertise. It helps people find your book, connect with you, and get to know you better.

A Facebook group or fan page would allow you to interact with your fans and engage with them on a more personal level. For example, your fans can post questions or comments about your book, which you can answer.

Another great thing about Facebook is the ability to share information. The people who have joined the group or liked your page can see what you are saying and what the others are saying about your book. If they like the posts, they would be more likely to share them with their network. In old marketing, it would be the same as being promoting it by word of mouth.

Do a virtual book tour

A virtual book tour (or VBT) is a series of online book promotion events that covers a variety of media, including blogs, web articles, video interviews, and more. It’s a way for your book to get in front of a lot of people in a short period of time. It is the internet version of the old-school physical book tour.

If you do decide to participate in a VBT, then it is essential that you have a website with a blog that you will use to promote your book. Next, you need to find websites and blogs that are willing to host a review of your book. You should start building relationships with these sites  (i.e., commenting on their posts or answering questions from their readers).

Once you build this relationship, you can ask them if they would like to host a VBT event about your book. If they agree, then you can go through a process that will make your book available to their audience.

Make a video trailer

If you watch a video trailer of a movie or a show, you can learn a lot about it. You will know if it\’s worth watching or not. This is also how video trailers for books work, making them great marketing materials for promoting your work.

They can attract more potential readers, allowing you to have more sales. A video trailer needs to be engaging and exciting enough to capture the reader’s attention. Aside from making the viewers interested in buying your book, a fantastic video trailer will also prompt them to share it on social media platforms, making your advertising reach broader.

Be creative with your trailer and make it attention-grabbing. You should also ensure that it isn\’t too long and complicated. And do optimize it for online viewing. 

Generate Sales Based on the Content of Your Book

You can make more money beyond your book sales if you are up to it. Think of it this way: your book is just the beginning of more doors that will open. One of the reasons why you wrote your book is to get more people to know about you.

Think about the kind of publicity you would probably receive after achieving commercial success with your book. What other streams of income could you get after this? Here are some examples:

Product sales

Think Harry Potter shirts, Harry Potter hoodies, Harry Potter mugs, Harry Potter anything. Imagine how much that merchandise raked all over the world with those raving fans! Okay, so maybe you’re thinking, “I’m not J.K. Rowling level!” Well, yeah, maybe. But if you have a loyal fan base, this can also be an option for you.

Speaking gigs

So maybe your book is inspiring, educational, or life-changing. It\’s not uncommon if people reach out to you inviting you to give a speech to students, to employees, or to members of an organization. They will be willing to pay you a fee to speak in front of their members or other interested parties.

If you aren’t getting those invites, make videos of you discussing parts of your book and putting them out there for the public to see. You’ve already written a book. You can definitely talk about what you’ve written.

Consulting

If your book discusses a solution to a problem, you can attract relevant organizations that need help in that area. For example, if you wrote a book about how you got more clients for your company, clients who need your expertise will hire you to be their consultant. 

Again, if no one is contacting you, you can take the initiative. First, make a list of potential organizations to approach. Then, reach out to them and talk about how you solved a challenge their company/organization is potentially facing.

Teaching

It doesn’t really have to be in a university setting. After all, if you do not have the qualifications, you can’t just teach like that. But you can teach through webinars, online courses, podcasts, etc.

There are a lot of great platforms for teaching. You can offer live content and be able to connect with people from around the world. You can also do recorded ones, which people can watch or listen to on-demand.

If you’ve already written the book, then the content is ready for you to share. Perhaps you\’ll need to expand or tweak it. But, it won’t be as time-consuming anymore compared to creating the learning content from scratch.

Want an easier and faster way to become a best-selling author?

So all that sounds great—having the credibility and authority on your expertise. Becoming a guest speaker, a consultant, or teaching others and making an impact while earning is terrific.

While being a published author can help you achieve that, it won’t be that easy unless your book becomes popular. It can be if you’ve written a great book, had it designed well, and done a lot of smart marketing. It all depends on the amount of work you put into it.

But if you want a faster way of doing it, Leaders Press can help—from writing your book to publishing it to distributing it to making it a best-seller and everything in between. Want to know more about how it works?

Schedule a Free Consultation

Want to learn more about how authors get paid? Watch this video:

Discover the 17 Steps to Creating a Best-selling Business Book

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