More Straight Talk about Royalties

My regular readers know I'm a fan of talking money, and sharing what I make for different types of work. So today I'm sharing more straight talk (and actual figures) about royalties. 

There's a lot of confusion from would-be authors about how advances and royalties work. In short, an advance is an advance against royalties--meaning that the publisher offers you money to write the book against your share of what the publisher expects the book to make. However, the majority of books fail to "earn out," or make enough that the author receives royalties. That's why I suggest that authors assume that the advance is all that they'll see for a book--and one of the major reasons I started doing more ghostwriting. 

So here's the scoop on my latest royalty statement for Writer for Hire, and case in point--I'm still not making royalties. Between January and June 30, 2014, Writer's Digest sold the following (the company breaks different types of sales into different categories, which I've noted below: 

Export sales       4

Dom L sales   411

Dom G sales      1

Dom M sales  172

E-books             84

POD                  29

Total Sales      701 (minus returns of 57) = 644 sales during this period, 4642 total since its publication. I've produced $4096.22 in royalties, which offset against my $5,000 advance, means I'm still $903.78 in the hole. That's the bad news. 

The good news? My sales were higher during this royalty period than the previous one, from July 1-December 31, 2013. (And the latter royalty period included back-to-school sales and holiday sales.) 

Compare: 

Export sales       69 

Dom L sales   370

Dom G sales      8

Dom M sales  113

E-books             65

POD                  14

Total Sales       639 (minus returns of 70) = 569 sales during this period. 

What does this mean? You might think "nothing." I disagree. Both the print and electronic sales are up, even though the book has been in print for more than two years, and I believe that's a good sign. It may be due to the fact that I'm constantly marketing all of my books on freelancing. It may be due to the fact that it's a great book, and that readers are recommending it to fellow writers. (I hope so.) But it may also be due to the fact that it's been around long enough to get noticed, and picked up at a bookstore, or ordered because it's been mentioned by another writer, or in one of my bylines, or at a writer's class, conference, or event. Or a combination of all of these factors. 

All that matters to me is that it's continuing to sell--and that means a year from now (sooner than that if sales really take off), I should be seeing my first royalty check for a book I wrote three years ago, and that was published two years ago. Good things come to those who wait. 

**Readers, do you have questions about royalties, publishing, book contracts, or POD? Comment here with them and I'll be happy to answer! 

More Straight Talk about Royalties: 3,429 Books = ?

I've been a full-time freelancer for 16+ years, a book author for more than a decade, and a ghostwriter/coauthor for 8+ years. While I still work with traditional publishers, I've also published books through POD companies; published stand-alone ebooks (a stand-alone is an ebook that is only published electronically, compared to an electronic version of a print book; and launched my own publishing company, Improvise Press, earlier this year.

So I've accumulated a fair amount of knowledge about the book publishing industry, at least from an author's perspective. I'm what publishers call "mid-list." A mid-list author isn't a bestseller (at least not yet) but she usually produces a profit for her publisher. A mid-list author might sell 10,000 copies of a nonfiction book--not a bad number when you consider that traditional publishers produced more than 360,000 titles in 2011 alone (and that's not counting POD and stand-alone electronic books!) 

What new and would-be authors don't realize, however, is how little most authors actually make for their books. (This is the primary reason I started ghostwriting--so that I could cut back on the time I spent promoting books and boost my hourly rate.) I've seen average advances drop, particularly over the last five years. A book that might have garnered me a $15,000 advance a few years ago? Well, I'm probably going to get offered maybe $5,000 for it.

Which sucks.

But there is one advantage to a small advance, at least in theory--you can earn out faster. But not as fast as you'd probably like.

So let's look at some real numbers. I just received my latest royalty statement from Writer's Digest for Writer for Hire: 101 Secrets to Freelance Success. (I've shared before what I make per-book.) The good news? The book is still selling, and selling steadily. The bad news? I have yet to earn out.

From January 1 until June 30, 2013, I sold a total of 802 copies of Writer for Hire, including 72 electronic versions. (This surprises me as I usually sell a higher percentage of ebooks than this.) That means that since the book was first published, I've sold a total of 3,489 books. Those 3,489 books have produced a total of $3,046.26. Do the math and you'll see I'm averaging less than $1/book--which is one reason I launched Improvise Press earlier this year.) Do more math and you'll see that I have to produce another $1,953.74 in royalties before I collect that elusive check--but I'll get there, I guarantee it. 

Mistakes Were Made: How 2012 Will Look Different Than 2011

Last post, I shared what I grossed in 2011, and that I failed to meet my income goal. That was a bummer. However, I spent the last week of 2011 revisiting my career, reevaluating my goals, and creating a new plan for 2012, so I know what happened last year. I've written about freelance mistakes before, but that doesn't mean I never make them myself. So here are my "top 5" reasons I failed to meet my 2011 income goal:

1. Too-positive thinking. In other words, I counted my proverbial chickens before they hatched. Early in 2011, I coauthored a book proposal for a client that our agent shopped around. I was certain that the book would command an advance of at least $20,000-30,000 (hopefully more!) and planned accordingly. Well, the only offer we got was for a whopping $4,000, and my client was unwilling to throw anything else in the pot. So I wound up in the spring with no book project. I'm a positive person, but in 2012, I'll be more realistic in my expectations.
2. No backup plan. The book proposal I mentioned above? Remember, I was certain it would sell to a traditional publisher, so I didn't look for any other book projects to take on because I didn't want to have too much work on my plate at once. (I'd spent three months before that busting my butt because I'd overloaded myself before and during the holidays.) Instead, I was left with no book and no backup work--which made a definite dent in my bank account. This year, I have backup plans for when I have too much work, and too little work.  
3. Significant life change. For my family, 2011 was the Year of the Move. We prepped, painted, staged, and cleaned the house we'd lived in for 13 years to get it ready to sell. That was a huge time commitment that took a lot of time away from my career. Then, we had to find a house to buy (long story, but it took several months) and then actually move all of our belongings, our two children (and all of their belongings!), both of our home offices, our golden retriever, and everything else we owned from our house and the storage facility into our new house...and unpack it all. (I confess, I still have a ways to go on that--but I'll get there eventually.) I know our move hurt my career, but now that we're in our "20-Year House," I don't have to worry about this in 2012.
4. Lower-paying work. I've seen advances fall over the last few years, and the book projects I took in 2011 paid less than I would have liked. Here's the thing--I can try to negotiate for more money, but sometimes I'm in the position of saying "yes" to a project I want for less money than I'd like or saying "no" and having no work. (Remember, most of my work these days are sizable projects like ghostwritten books, so I tend to take on one or two gigs at a time. When I had a dozen or more articles under contract at any given time, this was less of an issue.) I can't always control how much money I get for a gig, but I can make an effort to negotiate more money for the work I do in 2012. And I will.
5. Inconsistent marketing. I should know better, but I admit that when I was busy, I wasn't marketing myself. Then I'd come up for air to discover I had no big project waiting for me. Yeah, I know better! But I'm sharing this so you know that even experienced freelancers make dumb mistakes sometime. This year, I'm already marketing myself more consistently and I hope I'll have a steadier workload as a result. If not? Well, then I've got my backup plan to keep me going.

**Readers, what about you? Did life circumstances or other causes keep you from meeting your income goal? Feel free to share them here--and how you plan to tackle them in 2012. And if you haven't done so, please take my quick, confidential 2012 Freelance Income Survey, and ask other freelancers to do the same. We've garnered 85 responses already but I'm shooting for at least 250 this time around. Thank you!

Ebooks versus Print: The Ratio is Changing

Six months ago, I shared the details of my royalty statement I received in February, 2011, for Six-Figure Freelancing. My point was to demonstrate how long it can take to earn out, or make royalties, on a book, and that you should assume that when you write a book for a traditional publisher, the advance is all you're likely to see. (That's one of the primary reasons I got into ghostwriting.)

I just received my latest royalty statement, for the period from October 1 through March 31, 2011. I still have a ways to go before I earn out; so far, I've sold 11,844 copies of the book and produced $11,583.19 of royalties. Because I received a $15,000 advance, though, the book must produce another $3,416.81 in royalties before I get a check along with my royalty statement. That's my "magic number."

A closer look at my statement revealed that as sales of this book slow (not surprising as it was published in 2005), the ratio from ebook to print is changing dramatically. Here are the numbers from my last three royalty statements:

October 2009-March 2010 Ebook sales: 40 Print sales: 479 Total: 519

April 2010-September 2010 Ebook sales: 82 Print sales: 338 Total: 420

October 2010-March 2011 Ebook sales: 101 Print sales: 223 Total 324

It's clear to see that my ratio of ebooks to print is rapidly increasing. Through March 2010, ebooks represented 7.7 percent of total sales; through September 2010, 19.5 percent; and through March, 2011, 45.3 percent. I expect ebooks to make up well more than half of my print sales for my next royalty statement. And because I make considerably more--$3.88/book for the e-version versus $1.12/book for its print version, that's not bad news.

What's driving the trend? Fewer bookstores, more Kindles, greater acceptance of ebooks among readers, the convenience of e-books, you name it. The take-away for authors, though, is that while print isn't dead (nor dying, in my opinion), the sales of your ebooks are likely to grow faster than your print versions. Consider how you price and promote them to take full advantage of this trend.

5 Questions to Ask Before you Turn Down a Small Advance

I'm back! We have successfully moved 13 years' worth of stuff (including two home offices) into our new home. Now we are unpacking, which means soon I'll be back into a good work groove.

In the meantime, I wanted to mention my latest piece in the July, 2011 ishttp://www.blogger.com/img/blank.gifsue of The Writer on small advances. One of the reasons I got into ghostwriting and coauthoring is because I found my platform didn't matter as much as my client's did when it came to first, selling the book, and second, the size of the advance we'd garner.

But when you're writing your own book (and I write books on my own, in addition to coauthoring and ghosting), you may face the question that's the heart of the piece--how low is too low? In other words, is a small advance worth it?

This is a timely question as advances are shrinking across the board--unless you have an Oprah-sized platform or a million followers on Twitter. Before you turn down a small advance, I suggest you ask the following five questions:

• How much time will the book take? A relatively straightforward service book or a collection of previously published essays will likely take less time than a book that requires months of research and dozens of interviews, for example.
  
• Will the book further your career, and if so, how? Will it help establish you as an expert in a field you write about? Will it help you transition from freelancer to book author? Will it continue to build on your platform?
  
• How small is small? Some authors would turn up their nose at an advance of anything less than mid-five-figures; others will do books for a lot less than that. In other words, what you consider insulting may be more than acceptable to another writer. Only you can determine whether a "small" advance is worth it to you.
  
• How many books do you expect to sell? No, you don't have a crystal ball, but if you can reasonably expect to sell tens of thousands of books, a small advance may be offset by royalties down the road. A book aimed at a tiny niche audience is unlikely to produce as many royalties--and remember that four out of five don't earn out, or pay any royalties.
  
• How much do you want to do the book? I've taken on tiny advances (as in $2,500) for projects I really wanted to pursue--and have gone the POD route when I couldn't sell my book to a traditional publisher.
  

For a more in-depth look at this issue, check out the July issue of The Writer. Up next, straight talk about money, and a new survey of what freelancers are making today.

Advances, Royalties, and a Closer Look at My Latest Royalty Statement

I’ve posted before about why I got into ghostwriting, and how eliminating the need to market and promote a book after it’s published increases my hourly rate. That being said, I have authored—and continue to author—my own books, both for traditional and POD publishers. So I’m always interested in issues like the size of advances, royalty percentages, and the like.

Today, average advances are shrinking, in part due to the economy (publishing’s a business like any other) and to the ghe glut of “celebrity” books hitting the shelves. When Snooki and The Situation (both of Jersey Shore “fame”) get book deals, that’s bad news for midlist authors like me. The more money publishers shell out for these kinds of titles, the less they have to spend on non-celebrity authors like myself.

Forget the idea of getting rich on royalties. That typically doesn’t happen as 4 out of 5 books don’t "earn out," or make back their advance, which is technically an advance against royalties. Until your book earns out, you won't receive another penny from your publisher--regardless of how hard you work to sell it to potential readers.

To understand how this works, let's take Six-Figure Freelancing as an example. When it sold in 2003, it garnered a $15,000 advance. (Alas, a book on six-figure freelancing doesn’t assure a six-figure advance.) I have an “escalation” clause, which means that my royalty works out to be $.89/book for the first 10,000 sold, $1.12/book for every book thereafter. (I make considerably more, $3.88/book, for its e-version.)

Every six months I receive a royalty statement from Random House that tells me how many copies I sold in a specific six-month period, and how quickly (or slowly) I’m approaching that magic “earning out” figure. Six-Figure Freelancing sold about 4,600 copies in 2005, the first year it was published, and about 1,200 copies annually since then.

Let's take a look at my most recent royalty statement for Six-Figure, which covers the six-month period ending September 30,2010. During that time, I sold 82 e-books (a total of $318.49), and 338 trade paperbacks (for a total of $372.29). Total copies sold during this period? 420. This is the lowest amount of sales I've ever had in a six-month period, but the highest number of e-book sales. (For comparison, during the previous six months, I had sold 40 e-books and 478 trade paperbacks, for a total of 519 copies.)

More importantly, so far, my cumulative sales equal 142 e-books and 11,378 trade paperbacks, a total of 11,520 copies. That's not bad at all. My total royalties are $10,939.83, which includes $273.68 of subsidiary rights income from licensing rights to a book club. But the most important figure to my mind is $4,060.17, or the difference between my earned royalties and my advance. Once the book produces that amount of royalties, I'll start earning additional royalties--but until that happens, it's Random House that's making money right now, not me.

This doesn't mean I'll give up on the book; it's an excellent guide for writers, continues to build my platform as a writing expert, and helps me reach more readers. But realistically I won't see any royalty checks for it for another four to five years...which means I'd better keep making money in other ways in the meantime!

Readers, what do you think? Did this post help you understand advances and royalties better?

Royalty Rules: Two Facts Every Author Should Know

At a writers' conference years ago, I had the unexpected pleasure of spotting someone reading one of my books. I was sitting across from her, and couldn't help smiling to myself--it was the first time I'd spotted a reader "in the wild." When she looked up and recognized me, she waved the book, calling, "Oh my gosh! I just bought your book!"

I thanked her and signed her copy, but when I tell this story at conferences, I tell the audience that I was tempted to say, "Oh my gosh! That's great--I just bought a Snickers!"

Why? Because despite her paying $14.95 (plus tax) for my book, what I would eventually see in royalties for that one sale was about enough for a Snickers bar (albeit a king-sized one).

As a book author, you can't count on royalties anyway--the majority of traditionally published titles fail to "earn out," or pay royalties. So when you write a book, you should write it for the advance--and look at royalties as something you hope for and aspire to, not something you count on.

That being said, half of my books have earned out and pay royalties. Here's the breakdown on one title--the trade paperback retails for $14.95, with a royalty percentage of 7.5 percent. That translates to $1.12/book. However, the e-book version pays a royalty of 50% of the sale price (about $7.76/book), which translates into $3.88. Even though the e-book is cheaper for the reader, the latter produces a royalty that's more than 300% higher than the print version.

The lesson? As a book author, I promote my books all the time. But I'm going to promote the e-versions of my books over the print ones. It's a better deal for my readers--and a better deal for me.

5 More Reasons to Ghostwrite

Last post, I talked about how ghostwriting eliminates the need to promote and sell a book after it’s published—that’s the client’s job. That huge time savings (and potential money-making factor) is, in my opinion, the biggest advantage to ghostwriting but there are other advantages as well:

• Bigger advances. If your client is a subject matter expert or well-known person, it’s likely you’ll get a bigger advance (even if you only get a portion of it) than for a book under your own name. Today publishing is driven all by platform—to get a book contract, you’ll need platform, and the bigger, the better. As a fulltime freelancer, chances are your platform isn’t too big, but as a ghost you don’t have to worry about that.

• You can write about subjects that conflict with (or at least don’t contribute to) your overall reputation as a journalist. I’m known as a health, fitness, and nutrition specialist but ghostwriting lets me tackle different subjects without “diluting” my platform. If you’re a well-known parenting writer, for example, you can still ghostwrite a raunchy bio for a former porn star and your readers (and Facebook fans) will be none the wiser.

• If a book doesn’t sell, it won’t hurt you. If you publish a book under your name that sells poorly, that may hurt your chances of selling another book in the future--or at least your chances of getting a decent advance. (Unfortunately I’ve experienced this firsthand.) But with a ghosted book, poor sales figures aren’t your problem.

• You can stretch yourself as a writer. Last year I worked on a memoir for a client that was a far cry from the “how-to” service journalism I typically do. I had to develop a narrative arc, employ telling characterization and dialogue, demonstrate conflict, and develop symbols and an overall theme for the book. Revisiting these skills (I’m a published novelist) strengthened not only my client’s book but my current writing ability as well.

• You can step outside yourself. As a freelancer, you're usually writing in your own voice. It comes naturally. When you ghostwrite, you have information to convey—whether it’s a compelling life story or a new technique to beat stress—and you have to convey it in someone else's words and someone else's voice. That forces you out of your usual writing style, and makes work that may have become rote much more challenging—and fulfilling.

How about it? Let me hear from the ghostwriters out there…what do you find fulfilling about ghostwriting?

Why Invisible Authors Can Make More Money

Writers Digest publisher Jane Friedman recently tweeted an eye-catching stat from Book Expo America, or BEA. According to a recent Publishers Weekly article, 7 percent of traditionally-published books generate 87 percent of book sales, and 93 percent of all published books sold less than 1,000 copies.

For a midlist author like me, that’s pretty scary. But here’s the thing—despite sales projections, marketing plans, big-name endorsements, a kick-butt social media presence, thousands of Facebook fans and Twitter followers, and oh yeah, a compelling book, you simply don’t know how many copies of a book you’ll sell. That’s why as an author, you should assume the advance (the money you’re paid upfront to write the book) is the only money you’re going to see for the book.

The vast majority of books (more than 80 percent) fail to “earn out,” or pay royalties. But you still want your book to sell, right? You want royalties. You want big sales. Let's admit it, you want a bestseller. So you spend months both before and after it’s published securing blurbs, getting reviews, writing articles, blogging, speaking, printing up postcards, visiting bookstores, you name it…all to help sell your book. And it may pay off—or it may not.

Because there's an essential conundrum every book author faces:

1. To sell your book, you must commit substantial time to marketing it.

2. The time you spend marketing will not make you money (unless you eventually earn out and receive royalties), forcing you to either work more to make up the difference in lost time and income or take a cut in what you're making (which most of us freelancers can't afford to do) … or both.

That's why I started ghostwriting and collaborating on books as opposed to only writing my own. As a ghostwriter or coauthor, when the book is done, I'm done. I’m not “stuck” spending my limited, precious time promoting the book and going broke in the meantime--that's my client or coauthor's responsibility.

And ghostwriting can be lucrative, even while the average advances given by traditional publishers stagnate and fall. Here’s what I've made on some recent ghosting and coauthoring projects:

• $20,000 for a 60,000-word book for a nonprofit organization.

• $15,000 for a 40,000-word book for a book packager (the author already had 14,000 words written).

• $12,000 for a 55,000-word book; while this was a “ghost” project, I actually worked more as a developmental editor as much of the book was already written but needed expanding, editing, and rewriting for voice and flow.

• $25,000 for an 80,000-word manuscript for an expert who had a contract with a major publisher; my client wrote one-third of the manuscript while I wrote the rest of it and edited her section for voice and consistency.

These numbers aren't huge advances, true. But I'm being paid for the writing of the book, not its promotion, and that more than makes it worthwhile.

What about you? Are you ghosting, or considering it? What do you want to know about this niche?

In future posts, I’ll report more on the lucrative field of ghostwriting, how to break in, and how to determine whether it’s right for you. In the meantime, for an insider’s look at ghosting, check out http://ghostwritingrevealed.blogspot.com/, an excellent blog hosted by two smart, successful ghostwriters.