Earning Out

Oddjobs's picture

I’m still working on my Bouchercon wrap up, but I wanted to talk about something first.

Earlier I mentioned that I’d earned out - that is I’ve sold enough books that the print run and other expenses like the advance have been paid for. That’s a pretty big deal even for a small press author.

You see, most authors don’t earn out - they don’t make as much or more than the money the publisher has spent on them.

That’s to be expected though. Most publishers have authors who sell out their whole print run, who at least earn out and then authors who for whatever reason don’t earn out. In theory, the ones who make money for the publisher pay for the ones who don’t. And the ones who don’t do not necessarily fail to get another book published - their publisher may have confidence (more likely faith) that the writer will eventually come up with a breakthrough book.

But with a tough market and changing readership, that’s increasingly rare. It’s better to earn through.

With larger publishers, there’s usually a significant advance to pay for. The advance is meant to help the author live through the time when they’re writing the book or books and selling them too. That means they don’t get another dime until the advance is paid for. But when it is, the royalty checks start to flow.

For someone like me, there wasn’t much of an advance and it’s a typical small-press press run so it’s nothing compared to a mass-market book.

Still, it was a personal goal and I reached it in about seven months. I feel pretty good about that.

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Nat Gertler's picture

Re: Earning Out

Yes, making a book profitable is important - but please be careful about confusing earning out the advance with being profitable. Books with a significant advance are likely profitable for the publisher well before the advance is earned out. It's only the royalty money, not the entire markup, that is put against the advance to measure when it has earned out. It would be a foolish publisher who would offer the entire markup as their royalty rate, as it leaves them no profit ever.
Tim Broderick's picture

Re: Earning Out

You're right Nat. Depending on the size of the advance, an author could earn out the advance at the same time or after the other publisher's costs are accounted for. But only your portion of the book sales - your royalty - goes toward paying for the advance. 

My publisher is using the phrase to refer to her entire initial investment - print costs and advance. Since it's a small press, the advance was not large enough to even mention. Yeah, that confuses things a bit. 

Bottom line - if you earn out your advance then chances are the publisher has also paid for the print run and other costs too.