Understanding Royalties: From a Kid Lit Author Who Doesn't Get It Herself

Before you can collect any royalties, you have to earn out that advance. So easy! Obsessive sessions with a nubby pencil, a calculator and reams of greasy napkins have revealed that you only have to sell say ... 8,500 copies of your hardcover, at a 10% royalty, to earn it out. Then you’ll be one of the 30% of published authors who actually manages to do so. You feel sorry for that other 70%, but their work is doubtless rather flawed and perhaps they’ll have better luck next time. Guest column by Rhonda Hayter, whose kids book, The Witchy Worries of Abbie Adams was released in April 2010 by Dial. She is a member of the Class of 2K10 Debut Authors.
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So you’ve bravely weathered typhoons of rejection and gotten yourself a literary agent! Woohoo!

Then he or she has sent your kid lit manuscript once more into the breach (or twice, or thirty, or forty more) and sold your book! You got an advance! You’re set now. Pop the champagne and let the royalty checks roll in.

(11 Frequently Asked Questions About Book Royalties, Advances and Money.)

Guest column by Rhonda Hayter, whose kids book,
The Witchy Worries of Abbie Adams was released in
April 2010 by Dial. She is a member of the
Class of 2K10 Debut Authors. See her website here.

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But whoa there, Nellie. Before you can collect any royalties, you have to earn out that advance. So easy! Obsessive sessions with a nubby pencil, a calculator and reams of greasy napkins have revealed that you only have to sell say ... 8,500 copies of your hardcover, at a 10% royalty, to earn it out. Then you’ll be one of the 30% of published authors who actually manages to do so. You feel sorry for that other 70%, but their work is doubtless rather flawed and perhaps they’ll have better luck next time.

So you wait for your first royalty statement ... and you wait...and you wait. Publishers only send them twice a year you see, and it takes three months after the royalty period actually ends before they send the statement. Presumably they’re up to the elbows in calculations with their own greasy napkins. But that’s okay, the statement finally comes and hurrah, hurrah, hurrah! You’ve sold more than six thousand books already! Cue the nubby pencils and the dreamily projected sales you’ll garner based on your second (or third) full-time job, doggedly promoting your book in the blogosphere, social networking universe, kid-lit events and local media.

Six months later, the second royalty statement arrives and you giddily tear it open waiting for that juicy royalty check to spill into your greedy little hands. But what’s this? There’s no check. And uh-oh, not only don’t you get a check, you no longer have six thousand sold books because of returns from the brick and mortar stores. In fact, there seem to be ugly little minus signs all over the place. Tragically, some of the royalties for your seventeen-dollar book are looking anemic too, because the discount stores have been selling it for half-price. Of course it’s quite impossible to actually decipher the royalty statement without a Publisher to English dictionary, but it almost looks as if you’re further away from paying out your advance than you were six months ago.

But great news! Your publisher, who holds the subsidiary rights to your book, has sold them to a book club. There’ll be a new advance! Unfortunately, you won’t see any of it, because you and the publisher split it fifty-fifty...and the publisher keeps your half too, against that original advance you haven’t yet earned out.

(Pay it Forward -- 11 Ways You Can Help a Friend Market Their New Book.)

Don’t despair, your book sells well in the book club— a hundred thousand copies! By the way, the book club edition sells for about three bucks and the royalty is six percent, which you share fifty-fifty with your publisher. Before you can get any of your yummy three percent though, you have to pay back your half of the book club advance...which of course you never got. But hey, there’s money left over...which, um, goes toward paying down the original publisher’s advance...because you still haven’t earned it out.

So write for love, sister/brother writers, relish the fact that thousands of readers will explore the worlds you’ve imagined... and spend that book advance wisely, because you may never see another penny.

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