Last week, I broke down what authors can expect from advances and royalty rates of traditional publishers. Today, as promised, we’re going to take a look at the self-publishing side of things.

I’ve been exploring the world of self-publishing for the first time as I intend to self-publish my upcoming novella, THESE SAVAGE BONES. I’m learning as I go, and I want to share what I’ve learned with you to help make your publishing journey a little smoother. So today, let’s delve into the costs of self-publishing and what sort of profits you can expect.

Self-Publishing Costs

When you publish your book with a traditional publishing house, you’re not expected to pay any of the costs involved in creating the book. But when you self-publish you become the publisher, so all of these costs are left up to you. What kind of costs are we talking here?

Cover Design
Editing
Formatting
Marketing

Now, how much you spend on all of these can vary widely. Indie authors have published books on budgets of a couple hundred dollars to a couple thousand.

While you don’t have to spend thousands, you do want to make sure you’re putting out a high-quality product. You want your book to look professional inside and out to build trust and credibility with your readers.

So how about much should you expect to spend? Keeping in mind these numbers vary widely, here’s a very rough average: Cover Design ($100) + Editing ($1,200 for a 80k word story) + Formatting ($60)= at least $1,360, plus marketing.

How much should you spend on marketing? Again, that’s another number that varies widely. Maybe you don’t want to spend any money on marketing. Maybe you just want to spend $20 on Facebook ads. Or maybe you want to buy a Kindle for a giveaway. You can do whatever fits your budget.

I know it can be scary spending money on something that isn’t making you money yet. A lot of indie publishers say to view these costs as an investment rather than an expense since once your book is published it will continue to earn you money from royalties without any additional work on your part (except maybe some marketing).

While this is a good mindset, I’m going to be honest with you–just like with a traditional publishing house, when you publish your book you run the risk of it flopping. It might not earn back the money you put into it, or you might just break even. There’s really no way to know until you try.

With any sort of business there is some amount of risk, and as a self-publisher you are now a small business owner. And as any business owner knows, you must spend money to make money. I don’t want you to be afraid to take the risk to pursue your publishing dreams, but I do recommend you be smart about it. Spend what you can afford, and stay within your budget.

Self-Publishing Royalties

As we get into royalties in the self-publishing world, I’m going to specifically be looking at Amazon since it’s the most popular and has some of the highest royalty rates. However, there are are other platforms where you can sell your book such as Kobo, Google Play, Nook, and iBooks.

You might decide to just stick with Amazon, or you could sell your book on multiple platforms to create multiple streams of income. I’d recommend testing out different platforms to see what works for you and where your book might sell well–you never know!

When you self-publish through Amazon your have two options:

1) Kindle Direct Publishing (KDP)–This allows you to publish your e-book on Amazon for Kindle.

2) Create Space—Owned by Amazon, this allows you to publish print books. Amazon prints the books as they’re purchased and delivers them for you, and you don’t have to pay anything up front. The cost of printing the book is taken out of the profit. Your book will only be sold on Amazon, though you can pay a fee to sell it through other retailers such as Barnes and Noble.

So what are some of the main differences between traditional publishers and Amazon in terms of royalties? Unlike traditional publishers who only send out royalty checks twice a year, Amazon pays out royalty checks monthly as long as you hit the $100 minimum. Amazon authors also receive larger royalty rates, and as a self-publisher you don’t have to pay an agent their 15% of your profits for their services.

The other major difference is that in self-publishing, you don’t receive an advance. That means your book doesn’t have to pay back its advance before you start receiving royalties–you begin receiving royalties right away. (For a more in-depth explanation of advances, click here).

E-book Royalties

So what do Amazon’s royalty rates look like? First, let’s take a look at the e-books:

E-books priced between $0.99-$1.99= 35% royalty rate
E-books priced between $2.99-$9.99= 70% royalty rate
E-books priced above $9.99= 35% royalty rate

Compared to the traditional publishing average of a 25% royalty rate for authors, these numbers look pretty good. Also, remember that as a self-publisher you also won’t have to give an agent her 15% cut of your earnings. Even better.

If you’re wondering about how much to charge for your e-book, let me take a moment to beseech you to please price it at least at $2.99. Your book is worth at least as much as a cup of coffee, and after all the work you put into it you deserve that 70% royalty. You might do a temporary sale or promotion for less, but please don’t undervalue your work. Mmk?

Print Book Royalties

So what about print books? First of all, Create Space only prints paperbacks, not hardcovers (thought I should point that out). Royalties also get a little trickier here, as Amazon calculates your royalties based off the cost it will take them to print the book, which seems fair enough to me. You can use their royalty calculator here to get a rough estimate. Let’s do a little math, shall we?

Let’s say you’re printing a 300 page novel with a standard 5.5″ x 8.5″ trim. Let’s say you set your list price at $12.99. After you add up Amazon’s costs & cut (the numbers listed in the right-hand column if you’re using their calculator), which total $10.02, you’re left with a profit of $2.97. That comes out roughly to a 23% royalty rate.

Now, that might not seem like much, but do you remember the royalty rate of a traditionally published paperback? It was: 8% for the first 150,000 copies sold, then 10% after. (Plus, remember, you have to pay your agent 15% of your profits.)

That means for that same paperback book you’d receive an 8% royalty of $1.04 per sale, minus your agent’s 15%.

Looks a lot better now, doesn’t it?

The Down Side…

But how many books can you expect to sell? Remember that in the U.S. on average, a (traditionally published) book sells around 250 copies per year and 3,000 in its lifetime. But for self-published books, the average is 250 copies sold in its lifetime. Ouch.

That means your $12.99 paperback with its profit of $2.97 per copy would make you a grand total of $742.50. And do you remember that $1,360 cost of creating the book we averaged out earlier? Yep, you didn’t actually make a profit. Double ouch.

The advantage to a traditional publisher is that you don’t have to fear losing money because the publisher is investing in the book, not you. And, a traditional publisher will pay you an advance (anywhere between $5k-$15k), which you won’t have to pay back even if the book loses the publisher money. So in traditional publishing, there’s no financial risk for the author.

Don’t Give Up

I know these numbers can seem disheartening, but you have to remember that they’re just that–numbers. Averages. Statistics. You have no idea how your book might do until you put it out there, so don’t let the numbers stop you from trying. You might sell 500, 1,000, or 10,000 copies–who knows.

Building a loyal readership, putting efforts into marketing, and publishing a back list books to create multiple income streams are all things you can do to increase your odds of success. And, of course, writing a kick-ass story.

Whether you choose self-publishing or traditional publishing, neither road is going to be easy. They both have their advantages and disadvantages. And with either one, it’s going to be really hard to make a living as an author. This is why most authors write for the love of it, not for the money.

But if seeing your books published is your dream and passion, as it is mine, never give up. Keep publishing, keep trying, keep failing, keep learning. And most importantly, keep writing because it’s what you love.

My upcoming novella, THESE SAVAGE BONES, is a YA murder mystery set in 19th century Mexico against the backdrop of the traditional festival Dia de los Muertos–the Day of the Dead.

THESE SAVAGE BONES will be released on Oct. 25th, and you can read more about the story and sign up for a publication reminder by clicking here.

While I’ve been writing my upcoming novella, THESE SAVAGE BONES, I’ve been doing a lot of research on traditional vs. self publishing lately. Specifically, I’ve been looking into the monetary aspect of both. And let me tell you, it has definitely been eye-opening.

Today, we’re going to look at the traditional publishing side of things and explore advances, royalty rates, and just how you can make a living as a writer. But I’m going to warn you, friend, it isn’t going to be pretty. There are some cold, hard truths about publishing that you might not want to hear, but you definitely need to know.

Next week, I also plan to share a breakdown of royalties and costs from the self-publishing perspective so you can compare and contrast both options, so stay tuned for that! Now, let’s get down to it, shall we?

Spoiler alert: this post will involve math. You have been warned.

Advances

Before we get into the average royalty rates for authors from traditional publishing houses, we first need to talk about advances.

An advance is an “advanced payment” of your book’s royalties. The amount you receive depends on factors like the type of book you’re writing, how well the publisher thinks it will sell, and whether or not you’re a newbie author or a NYT best-seller.

So how much are we talking here? Literary agent Rachelle Gardner says, “A typical first-timer advance might be anywhere from $5,000 to $15,000 per book. Most publishers offer the advance they project your book will earn back in the first six to twelve months after publication.”

That might sound like a good chunk of change, but here’s the catch: you won’t receive your advance all at once. Typically, your advance is split into two payments–one when you sign your contract, and another once you turn in the final, edited manuscript–though now some publishers are beginning to split it into three installments, with the final payment being received when the book is released.

Now, if you’ve hired a literary agent (which you will most likely need to do to even get your foot in the door of traditional publishing), they will receive 15% of your advance as commission for their services. So if you receive a $10,000 advance they will receive $1,500. That being said, your agent will also help negotiate the best contract for you since it benefits them as well. Never begrudge an agent her 15%–she definitely earns it!

The other thing you need to understand about advances is that your book must earn them back before you begin receiving royalties. Yep, you read that right. That means if you received a $10,000 advance and your agent negotiated a royalty rate of $1 per book, you would need to sell 10,000 copies to earn back your advance.

And here’s the hard truth: sometimes, books don’t earn back their advance. If this happens you don’t have to repay your advance, but you’ll never receive royalties from your book and publishers will be hesitant to publish any more stories from you in the future since you just lost them money. Ouch.

Royalties

Are you still with me so far? Good! Now that we’ve covered the advance, let’s dig into the actual royalties.

First, let’s look at the timeline here. It can be up to a year or more from the time you sign your contract to the time your book hits bookstore shelves. In addition to that, remember that your book must first earn back its advance, which, on average, takes around 6-12 months. That means from the time you sign your contract, it can take two years before you receive a royalty check.

I wish I could say the news gets better, but it really doesn’t. You will only receive royalty checks every 6 months. Yep, twice a year. Talk about a sporadic paycheck.

Now, remember your literary agent? She also receives 15% of your book’s earnings for each royalty check you receive. That’s right, that 15% doesn’t just apply to your advance–it applies to all of your earnings.

So what about the royalty rates themselves? Here are the average industry royalty rates:

Hardcover: 10% before the first 10,000 copies are sold, then 15% after

Paperback: 8% for the first 150,000 copies sold, then 10% after

E-book: 25%

So how many copies can you expect to sell? That answer will vary widely and there’s no definite number, but keep in mind that in the U.S. on average, a book sells around 250 copies per year and 3,000 in its lifetime.

Let’s crunch some numbers, shall we?

Let’s say the retail price of your hardcover book is $15 and your royalty rate is 10%. That means you’ll earn $1.50 per book sold (after you earn back your advance, of course). Let’s say you’ve done well and sold 500 copies in 6 months, and you receive a royalty check of $750. After your agent’s 15% cut ($112.50), you’re left with $637.50.

Or, let’s say your paperback book is selling for $10 and your royalty rate is 8%. That means you’ll earn $0.80 cents per book. Again, let’s say you’ve done well and have sold 500 copies in 6 moths, and when your royalty check rolls around you’ve earned $400. After your agent’s 15% cut ($60), you’re left with $340.

Yep, after all the blood, sweat, tears, and countless hours you poured into your book, the publisher will get the biggest chunk of the profit. Granted, they also have to pay everyone who helped in the publishing process–the cover designer, editor, interior designer, etc.–but those percentages can still feel tiny to an author who’s put so much effort into their story.

Making a Living With Fiction

I know these numbers can be disheartening, and they make it easy to see why agents and publishers tell you not to quit your day job. The hard truth is, it’s really, really hard to make a living as an author. Successful authors like J.K. Rowling, Stephen King, and George R.R. Martin are rare exceptions, not the average author.

So how does one earn a living wage from writing fiction? Literary agent Rachelle Gardner shares the key to success:

Making money in this business, for the vast majority of writers, isn’t about having one huge hit. Or even two huge hits. Instead, it’s about building a career, book by book, and building an audience that wants more of your books.

Writers begin to see a “living wage” when they have a stack of books out there in the marketplace. Each book needs to be bringing in royalties regularly. Even if each book is not selling a huge number of copies individually—if you have a whole bunch of books out there, each selling some copies, it starts to add up.

Basically, making a living as an author isn’t a get rich quick scheme. It will take you years to build up a collection of published books that earn you enough royalties to live of off. The truth is, most writers don’t write to make millions–we write because we’re passionate about our stories and we want to share them with the world. And while passion may not pay the bills, there’s nothing quite like the reward of connecting with readers through story.

At the end of the day I don’t write for a paycheck (although it would be nice). I write because it’s what I love, and because I would continue to do so even if I never made a single sent from my work.

What about you?

P.S. Ready to explore to self-publishing side of things? Click here for Part 2 of this post!

My upcoming novella, THESE SAVAGE BONES, is a YA murder mystery set in 19th century Mexico against the backdrop of the traditional festival Dia de los Muertos–the Day of the Dead.

THESE SAVAGE BONES will be released on Oct. 25th, and you can read more about the story and sign up for a publication reminder by clicking here.

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