Last week I told you how book royalties work, and your comments brought up some important issues. One of them was the idea that the publisher makes a significant financial investment in each writer, with no guarantee that the book will sell. This is important to recognize and understand, because it’s one of the reasons publishers have to make such careful decisions. There’s so much competition out there, and each book they contract costs a substantial amount of cash before your book ever hits the shelves and makes a dime.
But what does that mean? How much will a typical publisher spend on your book before they’ve sold a single copy?
Here’s a hypothetical overview. Keep in mind this is simply an example and the numbers vary WIDELY from book to book, and from publisher to publisher. This is to illustrate that even if a publisher doesn’t offer you a large advance (or any advance at all), they’re still spending a lot of money on your book, with no guarantee of ever recouping it.
Packaging (cover design & production): $3,500
Typeset & Interior layouts: $500
Printing & binding: $12,000
TOTAL: $40,000 not including your advance.
If the cover price is $13.99, and the net price (the amount the publisher actually receives for each book) is $6.30, then the breakeven point is 6,349 copies sold. (Again, highly simplified for illustration purposes.)
Packaging (cover design & production): $5,000
Typeset & Interior layouts: $2,500
Printing & binding: $18,000
TOTAL: $58,000 not including your advance.
If the cover price is $19.99, the net price is $9, and the breakeven point is 6,444 copies.
Keep in mind that publishers could not stay in business if all they ever did was break even. As you can see, the publisher needs to sell a few books to recoup the cost of publishing. Can you guarantee your book will sell that many copies? Are you committed to participating in marketing so that your book has a better chance of selling? Maybe this makes it easier to understand why it’s so crucial for publishers to choose the ones that consumers will actually buy, and choose authors who will help sell.
**Addendum: These numbers, though they are hypothetical, apply to “mid list” books or those that have not received ginormous advances nor are expected to hit #1 on the bestseller list. The finances are quite different for books that receive five- or six-figure advances. The marketing budget skyrockets, and more will be spent on all other aspects as well—editorial, design, printing, etc. So the breakeven point is a much higher number of copies.
**Another addendum! Renowned literary agent Steve Laube wrote to correct my calculations (thanks, Steve!). He says: One thing forgotten in the calculation…the author’s royalty. That is a cost as well when considering the “break even” point. The up front advance is considered a (sort of) production cost in the publisher’s model. This means that with the models presented the break even sales number are probably closer to 8,000 – 10,000 units.[ Next Post → ] [ ← Previous Post ]