I get a lot of questions about whether a writer can earn more with a traditional publishing deal or by publishing indie.
That depends on a lot of factors, as I wrote about in Do You Need A Publisher, Part 3: Money, but this week a great opportunity presented itself for a concrete comparison.
On the Sell More Books show Jim Kukral talked about his book contract with traditional publisher Wiley and posted a link to it in the show notes.
The contract was for his non-fiction book Attention! This Book Will Make You Money: How to Use Attention-Getting Online Marketing to Increase Your Revenue, but the terms are similar to contracts for fiction.
For comparison, I'll share the 2017 numbers for the third book in my Awakening series, The Conflagration. I published it in May 2016, so it's fairly recent and was available all of 2017.
While I'll talk about my personal impressions of Jim's contract and views, this article is not legal or financial advice. If you need legal or financial advice, you should consult a professional about your own particular situation.
The Traditional Publishing Contract
In the contract, the publisher agrees to pay a $15,000 advance against royalties. An advance means that until the advance is earned back through royalties, no additional amounts are paid to the author.
Royalties vary by type of publication and number of copies.
Mass market paperbacks have a 7.5% royalty. Hardcovers have a 15% royalty for the first 10,000 copies, 17.5% for the next 10,000, and 20% after that.
The royalty is based not on the price the consumer pays but on the publisher's “dollar receipts,” which are defined as the U.S. dollars the publisher earns less any discounts, bad debts, book returns, or other credits.
Even before discounts or returns, the publisher doesn't receive the price the consumer pays but rather receives whatever the retailer (such as Amazon or a local bookstore) pays the publisher.
What does this mean in actual dollars?
Most books don't earn enough to cover the advance, so it's likely that from August 2010, when the hardback was released, through now the $15,000 was the total paid to the author. (For more on the royalty calculations, read on.)
That's an average of about $2,000 per year.
Now to The Conflagration (Book 3 in The Awakening Series) which I published myself.
In 2017, I earned about $2,600.00 in royalties, the bulk of that from e-books, but some from paperback and audiobook. If you multiply that by 7.5 years, about the amount of time Attention! has been out, it looks like I earned more: $19,500.
But I spent money on a cover and on having the book converted to e-book format (something I now do myself on Vellum), and on advertising. Also, though sales of the series have been pretty steady, there's no guarantee The Conflagration will earn the same amount each year.
Taking off $700 the first year for costs and assuming a more conservative $1800 a year to account for a possible drop in sales and future advertising, my total for 7.5 years would be $13,600.
From a pure royalty and cost perspective it's a toss up which approach is better financially, but there are a few other factors to consider.
Beyond The Royalties
- When the author gets paid
The Kukral/Wiley contract provides an advance on royalties, so even if the dollars came out the same overall, having the first $15,000 up front is better than spread out over 7.5 years.
On the other hand, beyond the first $15,000, the publisher is only required to pay royalties every 6 months, with amounts under $100 held until the next period.
Most platforms through which I published pay 60 days after the royalties are earned and there's no minimum (or a $10 one).
The publisher sends a statement every six months showing royalties, but many traditionally-published authors have told me it doesn't seem to them the publisher figures match up with their books' ranks or what they believe was sold.
The sales figures I see are almost in real time or at most a day or two behind.
Occasionally there are system glitches, but I more or less feel I've got a pretty good sense that what I'm getting paid matches actual sales.
- Marketing And Advertising
In the Attention! contract, the publisher has the right to both set the price of the book and market or advertise it as it deems appropriate.
Most traditionally-published authors find that they must do most of the marketing themselves, just as I do, yet they are unable to offer limited price discounts that might jumpstart sales the way that indie-authors can. (I had my best sales numbers ever for The Awakening Series and doubled my earnings when I made the e-book editions of the first book free, yet that's not something you'll see a traditional publisher doing.)
On the other hand, for those books the traditional publishers truly get behind, such as The Girl On The Train, it's hard to argue the author would have been better off being able to discount.
- Future Sales
This factor is where it gets interesting.
Jim Kukral is on a quest to get his rights to his book back, suggesting he's not expecting a lot of future sales and believes he can do more with it than the publisher can or will.
As an indie, I keep all the rights and, as noted, I can try whatever marketing and advertising I like. Unlike traditionally-published books that publishers usually ignore after the initial sales push, I'll keep promoting the series.
While there's no guarantee The Conflagration will continue to earn as it has, there's also a decent possibility it could or might earn more.
For each e-book I sell at $3.99, my royalty averages $2.60.
In contrast, traditional publishers typically focus on paperback, not e-book. Under the Wiley/Kukral contract, the trade paperback royalty for the first 10,000 copies is 10% of what the publisher receives.
So if the retail price is $9.99 and the publisher gets $6.99 from the bookstore, that's $0.69 per book.
Not only are the earnings for the indie author nearly $2.00 more per sale, it's easier for a relatively unknown author to sell an e-book at $3.99 than a paperback at $9.99.
- Long-term v. Short-term
The clearest conclusion here is that, for most authors, publishing is a long-term effort.
Because of that, if you have one book on a topic about which you care deeply, if you can get a traditional deal, from a financial perspective it might be the better way to go.
You'd get money up front and be free to move on and focus on other things in life.
On the other hand, if you don't absolutely need the money up front, you might rather retain control so you can keep promoting your book and getting it into other people's hands from now through infinity.
A Career v. A Book
If you hope to make a career at writing, there are no easy answers.
When I looked at the numbers, realizing it would take 7.5 years for one of my books to earn what Jim was paid up front for Attention! was a little discouraging.
But I reminded myself that I never expected to earn a living with one book, which is why I've published a four-book supernatural thriller series, am launching a new mystery series this year, and also publish non-fiction.
Right now, I have many streams of income that range from minimal (my first $2.55 from a Kobo subscription service just this month) to smallish (about $9,000 from Amazon last year).
Also, last year my writing gross income was about double the previous year. If I could do that every year for the next five years, I'd be turning cartwheels. Even every other year would reach six figures in six years.
I hope this comparison was useful.
We all owe Jim Kukral a debt for sharing his contract. If you get a chance, check out Attention! This Book Will Make You Money: How to Use Attention-Getting Online Marketing to Increase Your Revenue.
Until next Friday–