Royalties are the bread and butter of an author’s publishing career. Unlike many careers where you get a paycheck routinely, the career of a writer relies predominantly on royalties. The amount an author can expect to collect depends upon how well the book sells and how much of an advance the publisher gave the author at the time the contract was signed. The royalties the author collects will also depend upon the books retail value compared to the amount of the initial advance.
Though it might be reasonable to assume there is an industry standard or minimum royalty percentage such is not the case. The percentage you earn in royalties will differ from publisher to publisher even within the same region, so it’s difficult to tell an author they can expect to receive ten per cent or even eight per cent. Some of the bigger publishers may even pay up to thirty or forty per cent and the lower the advance, the higher the royalties will be. In some cases you may want to accept a lower advance in order to receive higher royalties. Remember, an advance is only one time while royalties are ongoing. Of course, you also have to look at the book’s potential future sales.
How do you know whether you are getting a fair percentage in royalties? You have to look at the industry as a whole, the location of your publisher, your target audience and what other publishers are paying. This is an area where it’s good to have an agent because he or she will be able to negotiate royalties and make certain you are receiving the highest possible percentage based upon your publishing experience and the potential sales of your book.
In some cases a publisher may choose to forego an advance and only pay royalties. This is something your agent will discuss with you and help you decide. In some cases it may be better to wait for royalties while in other cases it may be preferable to take an advance plus royalties. Authors that are already established and have royalties coming in from other sources may choose to forego an advance for higher royalties while new authors may prefer a higher advance and smaller royalties. The thing to consider is that if you take an advance and your book doesn’t sell as well as the publisher anticipated, you may not receive any royalties until the advance is used up.
One thing to keep in mind is that royalties are paid based on projected sales of your book. In the event the publisher underestimates your book’s potential, any advance payments will be applied to the future royalty payments. You want to think of these things when you and your agent negotiate the contract with your publisher. You want a fair contract but you don’t want to take a chance of having to return any portion of the advance to the publisher because sales are not up to the publisher’s expectations.