How Royalties and Advances Work

Publish date:

This is a "Blast From the

Past" post. To celebrate the

GLA Blog's 2nd birthday, I am

re-posting some of the best

"older" content that writers

likely missed.

Image placeholder title

If you're going to wheel and deal with agents and editors, you'll end up spending more time than you'd like discussing rights, contracts, advances, royalties and a whole lot of other boring important stuff. That said, I want to address a recent question that came in over e-mail regarding how advances and royalties work. In other words, how does the payment process work when you sell a book?

For this example, I'll keep it real simple (for my own sake and well as yours). Let's say you acquire an agent and sell a novel. The publishing house offers you royalties of $3 per book sold. 
It's probable that you'll be given money in advance - more specifically: an advance against royalties. What this means is that they give you a lump sum of money before the book comes out as payment that's yours to keep - say, $60,000. However, the money is not in addition to royalties, but rather part of royalties - meaning they've given you royalties for the first 20,000 books (times $3/book) upfront. Since they've already paid you the royalties of the first 20,000 books, you will not starting actually making $3/book until you sell the copy 20,001.

Think of it like this. When you get hired at a new job, you ask for several months pay upfront and the boss agrees. It's not a separate signing bonus you're getting - it's your hard-earned money paid to you early. You get the lump sum quickly, but then you don't get paid again till the regular checks start months later.

Many things to consider:

  • Royalties per book vary greatly. If you get $3/book, that's pretty darn good. If you write a typical nonfiction book, you may just get $1/book.
  • Advances against royalties are a pretty sweet deal. You get a lump sum upfront, which you get to keep even if the book fairs poorly. (Repeat: The advance is yours. Period.) But if the book takes off, you will start getting royalties down the road.
  • Reality check: Be aware that the money amount promised will hit your bank account as a lot less than expected, as Uncle Sam will take a big cut and your agent takes 15%.
  • You may run into a "flat fee" situation, where a publishing company pays you one sum of money upfront with no talk of royalties. This is legitimate - just make sure it's what you want.
  • It's common for a house to break up the advance. They may give you $30,000 when you sign the contract and then $30,000 upon completion of an acceptable manuscript. On this note, make sure you turn in an "acceptable manuscript," so that you get to not only receive the second payment, but also keep the first one, and not have a publisher demand it back.
  • Read your contract thoroughly. It's all spelled out.

Want more on this subject?

Poetic Forms

Rannaigecht Mor Gairit: Poetic Forms

Poetic Form Fridays are made to share various poetic forms. This week, we look at the rannaigecht mor gairit, a variant form of the rannaigecht.


The Writer, The Inner Critic, & The Slacker

Author and writing professor Alexander Weinstein explains the three parts of a writer's psyche, how they can work against the writer, and how to utilize them for success.


Todd Stottlemyre: On Mixing and Bending Genres

Author Todd Stottlemyre explains how he combined fiction and nonfiction in his latest book and what it meant as a writer to share his personal experiences.


Plot Twist Story Prompts: Take a Trip

Every good story needs a nice (or not so nice) turn or two to keep it interesting. This week, have a character take a trip somewhere.


Making the Switch from Romance to Women’s Fiction

In this article, author Jennifer Probst explains the differences between romance and women's fiction, the importance of both, and how you can make the genre switch.


Stephanie Wrobel: On Writing an Unusual Hero

Author Stephanie Wrobel explains how she came to write about mental illness and how it affects familial relationships, as well as getting inside the head of an unusual character.


Who Are the Inaugural Poets for United States Presidents?

Here is a list of the inaugural poets for United States Presidential Inauguration Days from Robert Frost to Amanda Gorman. This post also touches on who an inaugural poet is and which presidents have had them at their inaugurations.


Precedent vs. President (Grammar Rules)

Learn when to use precedent vs. president with Grammar Rules from the Writer's Digest editors, including a few examples of correct usages.

Poetry Prompt

Wednesday Poetry Prompts: 554

Every Wednesday, Robert Lee Brewer shares a prompt and an example poem to get things started on the Poetic Asides blog. This week, write a future poem.