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Writing Books/writer's profit per book

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Question
How much from the price of the book goes to the writer of the book? Where else does the rest of the money go to?

Answer
Good thing you're sitting down, Pedro, because this answer will make you weak in the knees.

The profits from the retail sale of a book go to a lot of middlemen.  And when it comes right down to it, the author doesn't get very much of it.

Let's use this hypothetical book with a retail cover price of $20, just to use a figure that's easy to work with.  The percentages I use below may vary... sometimes higher, sometimes lower, by perhaps 5%.  I'm using averages.

The bookstore will generally buy that book for 40% off the cover price, or $12.  So that other $8 is their profit... assuming they sell it for list price, which they often don't.  Either way, they pay $12 to the wholesaler.

Most bookstore sales are purchased through a wholesaler, such as Ingram. Ingram buys the book for about 60% off the cover price, or in this case, $8.00.  (They, of course, pass on a 40% discount to the stores, leaving them with a profit margin of 20% of list price, or $4 per book.)

The $8 the wholesaler pays the publisher is split with you, the author.  But not 50/50!  You look at your contract and you see that you're entitled to 10% of the list price, which in this case is $2 per book.  But wait!  You have an agent, who sold your book to the publisher for you!  She's entitled to 15% of your royalties, which in this case is 30 cents per book, leaving you with a whopping $1.70 out of the list price of $20.00 for your book's sale.

Before taxes.

Now, to be fair, many publishing contracts have a graduating royalty scale.  For example, you might get 10% on the first 5000 books sold, then 12.5% on the next 5000, and 15% on all sales beyond that.  And that's for hardcover.  For softcover sales, you're more likely looking at something like 7% on the first 12,000 books sold and 9% after that... and remember, softcover books are cheaper, too.

Pretty disgusting, isn't it?  I mean, say you work for three years writing your book.  You spend the better part of a year shopping it around before an agent sells it.  It's then another year on top of that before it's published (often, it's more like two).  And in the first year of sales, your book moves 20,000 hardback copies, putting you in the ranks of a "mid-list" author.  (Frankly, that's not terrible!) Using the graduated scale above, and after your agent takes her cut, you're left with $44,625 before taxes.  For three years of work (I won't count the other years, since you're hard at work on your next book, right?)  That's under fifteen grand a year.  Poverty level, man.  

Have I depressed you, yet? :)

Writing Books

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Vincent M. Wales

Expertise

I am a speculative fiction novelist (fantasy, science fiction, and so on). While I may be able to answer questions on non-fiction, my specialty is fiction. Please keep that in mind when asking questions.

Experience

For four years, I taught a series of fiction writing classes in Sacramento, CA.

Education/Credentials
BA in fiction writing.

Awards and Honors
My 2004 novel, ONE NATION UNDER GOD, won BEST FICTION in Fresh Voices 2006, BEST FICTION and BEST YA FICTION in the NCPA Book Awards, and placed as a finalist in BEST BOOKS 2005. In 2002, my novel WISH YOU WERE HERE won awards for Best Fantasy and Best Fiction/Drama in the 8th Annual SPA Awards. My latest work is a trilogy titled THE MANY DEATHS OF DYNAMISTRESS (a superhero memoir). The first book, RECKONING, was released in 2013 and won the SF category in the 2014 San Francisco Book Festival, took second place in the 2013 Royal Dragonfly Book Awards for the SF/Fantasy/Paranormal category, second place in the SF category of the 2013 Reader Views Reviewers Choice Awards, and was finalist in Foreword's 2013 Book of the Year Awards, Fantasy category. The second book, REDEMPTION, will be released in early 2015 and the final book, RENAISSANCE, is scheduled for release in late 2016.

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