Jul 23rd, 2019
Hi everyone, and thank you for tuning in to another episode of the We Make Books Podcast - A podcast about writing, publishing, and everything in between!
This week, it’s the Dreaded Money Episode! That’s right, we’re talking about advances, royalties, and how you get your money. This seems to be a bit of a taboo topic for a lot of writers, but it shouldn’t be! You wrote something and you should get paid for it! Rekka and Kaelyn go through all that, talk about some personal experience, and spend way too much time listening to Kaelyn obsess about a pond and debate the merits of pajamas as every day wear.
We Make Books is hosted by Rekka Jay and Kaelyn Considine; Rekka is a published author and Kaelyn is an editor and together they are going to take you through what goes into getting a book out of your head, on to paper, in to the hands of a publisher, and finally on to book store shelves.
We Make Books is a podcast for writer and publishers, by writers and publishers and we want to hear from our listeners! Hit us up on our social media, linked below, and send us your questions, comments, concerns, and descriptions of any recurring bad dreams you’ve had since watching that trailer for the “Cats” movie.
We hope you enjoy We Make Books!
Kaelyn:00:00 Hello everyone. Welcome to another episode of the, We Make Books podcast, a podcast about writing, publishing and everything in between.
Rekka:00:06 I'm Rekka, I write science fiction and fantasy as RJ Theodore.
Rekka:00:10 Um, I'm Kaelyn. I'm the acquisitions editor for Parvus Press.
Rekka:00:14 So acquisitions, editing, writing, like we're all in this to make that cheddar, right?
Kaelyn:00:22 We're talking about money today, people, this is, this is that episode. Uh, we are talking about money.
Rekka:00:29 Yes. So we mentioned it in the episode. It's a bit of a thing, like it feels like it's taboo. It feels like, how dare you presume to even approach me with these questions? It feels like it's -
Kaelyn:00:43 It's scary
Rekka:00:43 I'm creative. How am I supposed to talk about money? Because if I'm talking about money and thinking about money, then I've sold out like, so we want to just, we get into that and this episode is full of as much information as we could broadly discuss. We, um, are not lawyers. We are not financial advisors.
Both: 01:02 [laughs]
Rekka:01:02 We do not want you to follow every word and, um, have a bad experience. But we did want to just approach all these subjects that most people feel that they can't talk about or that, um, it's, it's above them. It's not their business or anything like that. It is your business because you're a writer.
Kaelyn:01:24 It's absolutely your business.
Rekka:01:24 When you sign a contract, that contract is to sell the rights to print your book. So if you are selling the rights, then there should be an exchange of currency as part of that sale. And so where is it? Who determines it? Where does it come from? When do you get it? We're going to go into all of that in this episode and it's chock full of information. And again, we apologize when the episodes run a little long, but I think this is one that maybe everybody needs to hear.
Kaelyn:01:46 Yeah, this was, um, we tried to cover as much as we could, um, in the time that we had, um, like Rekkaa said, this is not something you should be embarrassed about talking about. You're at the end of the day you're, you made a thing, you should get paid for the thing
Rekka:02:03 And information is empowering. So take a listen.
Kaelyn:02:06 Take a listen.
Rekka:02:07 Empower yourself and then go out there and yes -
Kaelyn:02:10 And sell that book, dammit.
Rekka:02:12 All right.
Kaelyn:02:12 All right. Enjoy the episode, everyone. Thanks
Music:02:14 [Intro music]
Rekka:02:28 So that was shocking to me
Kaelyn:02:28 Do you not walk around in your pajamas?
Rekka:02:31 Only to the bathroom to change.
Rekka:02:33 Yeah. Like because of the cat hair cause I don't want to getting into the bed.
Kaelyn:02:37 Oh, okay. I know I, I spend most of my time in my pajamas.
Rekka:02:40 I would if I had no pets.
Kaelyn:02:42 Fair. Are we recording?
Rekka:02:44 Oh absolutely.
Kaelyn:02:44 Of course we're recording. Yeah, we're recording already. [laughs] But, I mean, but like this place is so freaking picture-esq. You can't not hang out in your pajamas a little bit.
Kaelyn:02:54 And like take it all in.
Rekka:02:57 I have started setting aside couch clothes, so like lounge wear for the couch, but it's not my pajamas so that I'm not tracking cat hair into the bedroom. But I keep forgetting to change into them when I get comfortable.
Rekka:03:11 We're working on it.
Kaelyn:03:11 'Cause, I mean this place is just -
Rekka:03:12 Plus they're flannel pants and it's June now I need a new pair of pants for lounging.
Kaelyn:03:20 This place is just, it's so picturesque. It's disgusting.
Rekka:03:21 And by this place, of course, we are talking about the utility closet at Parvus Press.
Rekka:03:25 Yeah, no, we're recording from the, uh, the containment unit records writing shed in her backyard, which backs up to a beautiful pond with trees and turtles and -
Kaelyn:03:38 We saw some tadpoles. I was advised there could be snakes and disappointed that I didn't find one.
Rekka:03:42 But you did find mint.
Kaelyn:03:43 I did find mint. Yeah. So just, I'll put a picture of it up. It's so disgustingly serene. Um, but yeah. Anyways, so, uh, welcome to another episode, everyone.
Rekka:03:53 Speaking of serenity.
Kaelyn:03:54 Yeah. Serenity. This is not a serene one .
Rekka:03:56 This is our capitalist episode.
Kaelyn:03:58 This is a stressful episode for a lot of people. We're talking today about money.
Rekka:04:03 Like specifically, can I have some?
Kaelyn:04:04 And how you get it?
Rekka:04:06 Can I please Kaelyn can have some.
Kaelyn:04:08 Sure. Of course.
Rekka:04:10 Kaelyn just handed me a quarter, everybody.
Kaelyn:04:11 [laughs] Um, yeah. Today we're talking about money and um, how you get it and how much you're entitled to and um, what you should be getting.
Rekka:04:23 And when you get it.
Kaelyn:04:24 When you get it. Exactly. Yeah. Um, so we wanted to do this episode because this is a bit of a dirty subject type thing.
Kaelyn:04:35 Taboo is probably a better word. Yeah. Um, and I think it's something a lot of people are nervous about that they don't want to ask about. They don't want to discuss.
Rekka:04:43 Like we put out the call for questions.
Rekka:04:46 And crickets. And I think everyone is afraid to be the person that asks that question.
Kaelyn:04:50 Exactly. Yeah.
Rekka:04:51 Or they think we aren't going to really get into the details on those.
Kaelyn:04:56 It's -
Rekka:04:56 Unfortunately, some of them we can't because it's going to depend a lot on your contract.
Kaelyn:05:04 Yes. And we will flag those areas certainly. But, um, I think also there's the taboo around it because a lot of people have this mentality of I'm writing because I want to create, I'm writing because of this. That's awesome. But also you get paid for this and you should be aware of what you're getting paid for and be knowledgeable about it because this is important. You put a lot of work into something, you should make money off of it, you know? So anyway, we decided we wanted to, uh, to talk about that and hopefully provide some guidance with, um, you know, how things like advances and royalties work -
Rekka:05:37 Or at least make it a little less scary.
Kaelyn:05:38 A little less scary. Yeah. That should, that's a theme for this whole podcast: making writing less, a little less scary. Um, so we're going to start off with, you know, just some as we usually do with these kinds of things, some definitions. What, uh, what different things are, uh, kind of take you through what you can expect in terms of advances, royalties, how these things work. Um, we won't get too much into that because that's more of a contract specific thing.
Rekka:06:08 But there are some things that people just -
Kaelyn:06:11 There's some broad, yeah.
Rekka:06:12 Don't have a general understanding of even.
Kaelyn:06:15 Exactly. Yeah. Because it's a very intimidating process and going, going online and reading things about it is not always
Rekka:06:23 helpful. And the articles are old or the people who are willing to put articles online about it are vanity presses who shouldn't be giving you advice anyway.
Kaelyn:06:32 And you know what actually I did just because I wanted to see what was online before we did this episode. I spent some time on Google and it's something interesting I found is that not even the good articles, the ones that have good information in there helpful, none of them talk about ebooks.
Rekka:06:45 Mmm, yeah
Kaelyn:06:47 It's all print.
Rekka:06:48 Yeah. And as two very different things.
Kaelyn:06:51 Yeah. And you know what's interesting is the articles were like recent enough that like they should have like as doing ebooks should have been a thing. Um, because that's very confusing. Anyway, uh, we're gonna walk through, you know, what you can expect in terms of how the royalties work. Uh, we're going to talk about how money actually trickles down to the authors and then talk about, you know, what payments look like and what forms they're going to come in and where they'll be coming from. So, um, dive in.
Rekka:07:22 Yeah, let's just start.
Kaelyn:07:23 All right. So, uh, advances.
Rekka:07:26 Yes, please.
Kaelyn:07:26 Yes, Rekka?
Rekka:07:28 Can I have one? [laughter] Yeah. So an advance is the word. Um, used in the definition, it is an advanced payment that you get on the assumption that you would eventually earn this through the royalty agreement that you settled on in your contract. So this is a payday loan without the interest rate.
Kaelyn:07:55 Well ...
Rekka:07:55 Yes. that sounds awful. But like you know what I'm trying to say, you are getting money now that you will have to earn later.
Kaelyn:08:02 Yes. It's, it is an advance of money that you are going to earn.
Rekka:08:06 Right. Okay. I said have to earn, we'll get into actually that too I think.
Kaelyn:08:11 Think of it as here's a check for money you are going to make in the future and that um, the publisher will typically give you that right when you sign. Um, usually what happens is an advance might be broken up into two or more pieces, two standard, you know, usually half when you sign half when you finish the manuscript, I'm very rarely are they going to give you the whole thing at once. It's usually half now, half when you're finished, there might be, you know, there could be other weird little things in there about how they're broken up, but every, you know, one of the running themes for this episode is going to be, it's depends on your contract.
Kaelyn:08:48 Typical though half now half when you finish. An advance is different from royalties obviously.
Rekka:08:55 In a way.
Rekka:08:57 It's the more, like royalties are based on actual sales numbers. The advance is royalties that are based on expectations and prophecy.
Kaelyn:09:10 Yes. Um, typically what publishers do when we're trying to decide what an advance is going to be is we go into the secret room, consult the blind mages, provide the necessary sacrifice, they gaze into their crystal ball and come up with a number for us.
Kaelyn:09:28 You of course have to take into account whether or not you're doing this on a full moon because that can make the numbers a bit squiffy. Um, no and we'll uh, we'll talk about um, numbers and percentages later in the episode. We kind of just want to get through royalties and advances and what they are at this point.
Rekka:09:47 So, so it isn't the full phrase is advance on royalties.
Rekka:09:51 So it is technically royalties, but it's not in the sense that you'll get royalties later. Will you? We'll be able to see this is a royalty for the sales of books.
Kaelyn:10:00 This is a uh royalty for sales that you are going to make in the future.
Kaelyn:10:07 Um, if you want to, I work in finance. If you want to put it in those terms, it's a futures commodity.
Rekka:10:12 Fair enough. Yeah. It's, well, it's, it's almost a good faith payment from the publisher.
Kaelyn:10:17 Absolutely. That's what it is. Yeah. And it's also, it is a, hey look, you did all of this work and you still probably have about a year and a half minimum to go until you start making money on this. So here's money up front for the work that you already did.
Kaelyn:10:34 And, um, we can, you know, we won't get too much into like what advances should be used for because really that's, that's -
Rekka:10:43 Your business.
Kaelyn:10:43 It's your business. And it depends on what, you know, what you need to use it for. But, um, you know, it's a payment for, you've already done a lot of work. Have some money.
Rekka:10:54 Yeah. Um, if I were to offer advice on spending the advance, I would say treat it as a payment toward your author business and use it as you would as the owner of that author business.
Rekka:11:07 But not everyone has the luxury to separate that from their, their household family.
Kaelyn:11:12 There's absolutely nothing wrong with however you want to spend your advance, assuming you're not blowing it on like jetpack futures.
Rekka:11:20 Yeah. Well, that's fun.
Rekka:11:24 If you're, if you're a gambler, risk taker maybe you don't need the money and you're insulted by the commoditization of your novel and you're like, you know what? I'm going to spend this on something that will never ever pay out.
Kaelyn:11:35 That's fair.
Rekka:11:37 Yeah. 100% your prerogative, however -
Kaelyn:11:40 Short of setting it on fire, just, you know. Um, so royalties like Rekka was saying are, that's what you're actually, when you're getting paid on your book, when the book has sold and you get money from the book being sold. Royalties are tricky and I think they're scary.
Rekka:12:00 Mm. It's, it's spreadsheets is its -
Kaelyn:12:04 It's numbers.
Rekka:12:04 Math and it's a whole lot of different numbers and calculations based on at least five different moving targets at all times.
Kaelyn:12:14 Yeah. So when we talk about royalties, I'm going to break this down into two different groups, which is print books and ebooks because royalties for each of those work differently.
Rekka:12:24 And we should say that we're talking North American US.
Rekka:12:27 In terms because things may be different when to you cross out of international boundaries
Kaelyn:12:32 Yes. So for print books it's going to be exclusively, you know, things that are sold in the US where, I'm not saying it's different everywhere. I'm just saying I can't guarantee that it's not.
Kaelyn:12:47 Print books. Typically authors are going to get paid on what's called the list price. And that is if you flip the book over in the back, it should have a price on it.
Rekka:12:56 Yeah. It'll be associated in the ISBN code. It'll be probably printed beside it or inside the cover. Or if it's a hard cover with a slip case, there's a dollar sign there. There's usually a decimal point.
Rekka:13:09 And that is your list price.
Kaelyn:13:13 So when you get a royalty for that book, let's say the book sells for $10 just for the sake of round numbers and your royalty rate is 10% you're getting a dollar when that book sells. Print books, it should always be the list price that's still standard for print books. Um, royalty rates for print books may be a little lower, but they are more expensive than ebooks.
Rekka:13:44 So when you say they're lower, you're saying they're lower than the royalty rate you're going to get for ebooks because ebooks don't require things like printing costs -
Kaelyn:13:53 The overhead on ebooks is very minimal -
Rekka:13:55 - and there's no warehousing them, there's very little chance of returns that do happen.
Kaelyn:14:01 Rarely ebooks, ebooks get returned.
Rekka:14:03 But I'm, the book seller is not going to buy a large number of ebooks and then potentially return half of them.
Kaelyn:14:10 Yeah. So that's the most straight forward explanation. With print books, it's your royalty percentage off the list price. Ebooks, however, are a whole nother monster. I'm going to use Amazon as sort of the base example here, but most of the other ones kind of work the same way. Um, you know, everyone's a little bit different but,
Rekka:14:35 But Amazon's kind of set the rules and everyone else is -
Kaelyn:14:38 Yeah. And most of us get our books through Amazon now.
Kaelyn:14:43 Um, like by a lot.
Kaelyn:14:45 So what's happening with ebooks is there's no print book, obviously. So overhead is nothing compared to print books.
Rekka:14:55 It's server space.
Kaelyn:14:56 They're sending you a file.
Kaelyn:14:58 Essentially. So Amazon is taking their cut right off the top because when you're selling print books, the bookstore is buying the book and keeping the profits from the sale of the book. Amazon is getting their cut after the book sells. So your royalty rate on an ebook on Amazon is probably going to be either 70% or 35, depending on if it meets the criteria for Amazon to put it at 70. And here's the thing, most books do. Um, it's, it has to do with pricing length. Um, you know, those kinds of things.
Rekka:15:37 You're deliverable file size.
Rekka:15:39 Even if you have a lot of illustrations or photographs in your ebook, you're going to have less money coming in because Amazon's going to charge you for the space because their distribution to kindles is free for the user, the reader.
Rekka:15:53 So they're going to charge you if you use a larger than standard amount of data to send to that.
Kaelyn:16:01 Yeah, so Amazon is taking their cut right off the top of the sale. So again, let's say your book is selling for $10 on Amazon and you're getting a 70% royalty. Well in this case your publisher is getting a 70% royalty on that.
Rekka:16:17 So we'll use the word publisher when we are talking about royalties coming directly from an Amazon sale. If you're an Indie, like your self published, you are the publisher. So we're talking about you directly. If you are an author signed with a traditional publisher or a small press then they are the publisher. And when we say 70% royalty, we're talking about what is coming back from Amazon. It's very unlikely that 70% is the royalty in your contract.
Kaelyn:16:46 No, it's not.
Both: 16:49 [laughter]
Rekka:16:49 Hey, look, we can't speak for everyone, but we're going to assume that yours is -
Kaelyn:16:53 It's not -
Rekka:16:54 Significantly lower than that. So, um, so yeah, a book sells on Amazon for $10 and a 70% royalty goes to the publisher is getting $7 and Amazon has taken their $3 in, they're happy and then then
Kaelyn:17:06 And then the publisher is paying you based on your royalty rate off that $7. So it's an extra step. Um, although technically if you look at the bookstore, it's really not. It's actually a little more straight forward.
Kaelyn:17:21 Um, so that's how you're getting your royalty rate from ebooks. And that is the easiest way I can sum it up. There are a lot of factors in how Amazon prices and sells books. They have all of these algorithms, which this is something a lot of people don't know. Amazon can change how much your book is being sold for. If they think that there's someone that like maybe they've clicked on it like three times in the past two days and they haven't bought it, Amazon's algorithm will knock it down, say a dollar.
Kaelyn:17:51 And see if they can get you to pick it up and then guess what your book sold for nine bucks instead of 10. So Amazon, Amazon can take your book and reprice it for the -
Rekka:18:03 Read that fine print when you sign up for KDP.
Kaelyn:18:06 Yeah. So that is just kind of the definitions and the examples of advances and royalties. Um, so you're probably wondering now, well, how do I get these numbers? How do I know all of this stuff? As always, it's in your contract. Please read your contracts. I know they're long. I know they have absurd words in them. I know they're boring.
Rekka:18:31 Go through them. Get a highlighter and highlight the numbers you're going to want to come back to reference.
Kaelyn:18:36 Yes, yes.
Rekka:18:36 Print out those pages. If your contract is digital and you know, pin them somewhere where you can get to them, where you can see like, this is my payments, this is my, um, royalty for this, this, these are the, uh rights I retained. These are the timelines at which my contract might revert back to me under certain conditions. So those are the kinds of things you want to at least be aware of those things. And you know, you don't have to memorize them but know where to find them.
Kaelyn:19:06 Yeah, your contract will in all likelihood have a schedule in it that explains how your royalties work. Um, it's going to give you different amounts for ebooks and print, uh, maybe audio books. Um, if that's something that your publisher is doing, if you're getting an audio book. Um, one of the things that might have on there is a graduated royalty schedule. What this means is you're going to get different royalty rates based on the number of books you sell. And typically what will happen is the more books you sell, the higher your royalty rate gets. Now you're probably going, well, why don't they just give me the high one right off the bat. The publisher is trying to recoup the money they spent on the book.
Kaelyn:19:54 So they're saying that if we get to, for instance, you know, 50,000 books, we've recouped everything that we spent. We want to pay you more now right on this.
Kaelyn:20:06 So you might see like 10 - you know, books, one to 10,000 are at royalty rate X books, 10,001 to 25,000 are at royalty rate X plus one.
Kaelyn:20:21 And they'll keep increasing. So what that means is the more books you sell, the higher your royalty rate is going to be. Not everyone does this.
Kaelyn:20:30 But here's the thing with royalties and advances and contracts: everything's negotiable.
Kaelyn:20:35 So if you have an agent, there'll be the one handling that for you and they'll be trying to get you the best deal possible. Um, if you're doing it on your own, these are good things to know about cause it is a little scary and people don't like talking about money.
Rekka:20:50 Right. And I can imagine that a lot of authors are afraid that if they try to negotiate on their contract that the offer will evaporate because they've been selfish. Or presumptive.
Kaelyn:21:01 No. And you know, don't, don't think that, you know, if, especially if you feel like you're not getting the best deal, pushback. Don't, you know, if you get a good offer right off the bat and you're happy with it, there's nothing wrong with that. Take it and be happy with it. But if you feel like you're not getting quite what you wanted, have realistic expectations but also ask questions.
Kaelyn:21:24 No one's going to be like, sorry you asked too many questions out the door. Um, you know, we talked about this before, if you have someone that can look at a contract for you, it's always a good thing to do that, especially when it comes to the money sections.
Kaelyn:21:40 Just make sure everything that you think you understand is what this actually says.
Rekka:21:45 There are, um, author organizations out there that you can join and for the, um, the dues that you pay to those organizations, there might be some sort of access to a contracts lawyer as built in. So, you know, keep in mind that not all organizations are, you know, on are equivalent are, um, on the same level. But that is an option. Something you can look for that might cost you much less than a lawyer.
Kaelyn:22:12 Yeah. Those are just good resources in general.
Rekka:22:14 Plus any lawyers that they have are likely to be like contract, like publishing.
Kaelyn:22:19 Yes. They'll know what they're looking at. Yeah. If nothing else in the contract, pay attention to the money part. There is nothing wrong with wanting to make sure that you're getting paid fairly and adequately.
Rekka:22:32 But there's also know what your reasoning for going to a publisher is, and there may be things that you are far more like interested in tham negotiating the absolute best dollar amount. You may be the type to settle for a lower royalty but retain more of your rights for example. ,
Kaelyn:22:49 Yeah exactly. So every everything's a give and take with us and you know at some point we'll do another episode about contracts and rights and things, but for now we're -
Rekka:22:58 But all of these,
Kaelyn:22:59 They're all factors
Rekka:23:00 decisions that you make in your, in your contract negotiation are going to affect your royalties and your advance going forward.
Kaelyn:23:07 Exactly, yeah. So the next question you're probably wondering is, okay, so how, how and when do I get money?
Rekka:23:16 [laughs] Right?
Kaelyn:23:18 This is great. I've signed this contract, I've got, you know, a royalty schedule that I'm happy with. How and when am I going to get paid? So like we said right off the bat with your advance, you're probably gonna get half when you signed half when the book's done. So that's the advance. For the royalties you may not see a royalty check for a while.
Rekka:23:39 Because you have to earn out that advance for the royalties start paying towards you.
Rekka:23:43 So you may get royalty statements. You, you may not actually get legal tender until, well, you will not get legal tender until you earn out the royalty. It's a matter of what your royalty was versus how your book is selling versus um, you know, if you have multiple books and therefore like a joint accounting for example, between those books on your advance. So it's going to be a while, but it's not, it doesn't have to be years, but it may also be never. Lets you know, just to put it out there.
Kaelyn:24:18 Yeah. So what - Okay, let's say that your advance again for the sake of round numbers was $10,000. You need to earn $10,000 in royalties -
Rekka:24:29 Those are those small percentages of the purchase prices
Kaelyn:24:33 before you get a royalty check.
Kaelyn:24:36 So as soon as you hit $10,000 in 1 cent, then you start getting paid on your royalties. Because remember what we said, the advance is payment on money you are going to make in the future. So now they're repaying the money that they already paid you to themselves.
Rekka:24:55 It's a zero interest semi loan that's immediately forgiven from the publisher. Okay, here's the question that I can imagine to a lot of minds. If I don't earn back my advance, do I have to pay the difference back to the publisher?
Kaelyn:25:11 No, you don't. And again, contracts, you know, check contracts,
Rekka:25:14 Check your contract.
Kaelyn:25:16 But -
Rekka:25:16 there's probably something in there where if you don't give them the book you promised them you have to pay back the advance.
Rekka:25:21 That's in there. But you are receiving an advance on projected sales and it's the publisher's job to give you an advance that they believe that the y can support with book sales.
Kaelyn:25:32 Yes. So if you don't earn out your advance, you will not have to pay back the advance. Let me go further and saying that if you sign a contract that says you have to pay back your advance, don't sign that.
Rekka:25:48 Yeah. Don't, don't sign it in the first place. Yeah. If you receive a contract, if you see a contract, if you smell a contract run, that says -
Kaelyn:25:57 You have to pay back your advance. And so no, you don't have to give back your advance. But let's, okay, so you have a $10,000 advance. Your book has now earned $10,000 in one cent. You're going to be getting a check for 1 cent.
Rekka:26:11 It, depending on your contract, your, your publisher may have a minimum threshold -
Kaelyn:26:15 Okay, yes -
Rekka:26:15 - which you want to watch for too. Because if that minimum threshold is very high, you still won't see a check for awhile.
Kaelyn:26:20 For a while. Yeah.
Rekka:26:22 Um, you have a $10,000 advance at $10,000, 1 cent, you now are owed royalties by your publisher.
Kaelyn:26:30 You are owed roylaties. Exactly. And if your book just keeps earning and earning past that, you will keep getting royalty checks. There isn't a cap on this. As long as your book is making money, you will keep getting royalty statements and checks.
Kaelyn:26:44 Um, here's the thing though, you have to keep in mind how long it takes to get a book published. So even once you've signed the contract, it's probably going to be a year and a half before that book goes to press.
Kaelyn:26:58 And then depending on the size of your royalty and depending on how quickly it sells, it could be a while before you start getting a check. Royalty checks. Um, depending on how long it takes to earn out your advance. The reason I'm saying this is don't bank on having money immediately from the book.
Rekka:27:16 And since you can't predict the sales of your book, don't bank on it at all.
Kaelyn:27:20 Yeah, that's, that's a good point.
Rekka:27:21 You know, don't, don't plan on, I will have x amount in the next royalty check. There is no way to control that. There is no way to insure it yet.
Kaelyn:27:30 So now Rekka brought up something interesting earlier that she just kind of threw out as an example but is a good quick note to talk about which is joint accounting for royalties. So let's go back and do that real quick.
Rekka:27:42 So joint accounting is when you have a multi book contract with a publisher and it can be a duology, a trilogy, whatever, whatever number of books has been agreed upon and is covered by that single contract.
Kaelyn:27:58 In the single contract.
Rekka:27:59 It's not with options for the rest of the trilogy. It's this is for three books. Yes, for an example of a trilogy and then you have a total advance that they are going to break up per book and whatever that advanced payment schedule is. And in joint accounting you do not earn royalties until you have earned the entire advance out -
Kaelyn:28:27 For the entire series
Rekka:28:27 The entire series.
Kaelyn:28:29 So it all depends on how the contract is written and laid out. Again, please read the contract.
Rekka:28:37 Right. So your first book may sell to the point where you've earned out, as Kaelyn was saying, earned out the advance that you receive for that book. But depending on how your contract's written, you may be receiving those royalties against the total advance of whatever number of books is covered under that contract. So if your total advance for three books say is $30,000, if your contract is written as such, you won't get royalties even though the second book isn't out yet until you earn back the advance for all three books, all $30,000. And that's again, it's the language in your contract. That's why you want to have help looking at your contracts.
Kaelyn:29:17 Yeah. So the base question, you know, when do I get a check or royalties check? Typically twice a year is pretty common. Um, you know, there's a, I, I do this, I actually deal with the calculating all the royalties, it is not easy, it is it's a process. So, uh, it is kind of easier to get a bunch of months all together and do them all at once.
Rekka:29:39 Why don't you break down all the different moving pieces?
Kaelyn:29:42 Oh God. Okay. Well, um, one of the things, so right off the bat, what you're going to have to do is gather all of the information from the different places that have sold your book. If you are a traditional publisher with a distributor, this is an insane process. It's, it is gathering a lot of information and it's just so many spreadsheets. And so you have to get all the information together and figure out how much did the book sell for what did we actually get paid on it. And then you got to check and make sure that's correct because I know this is shocking, Amazon occasionally makes mistakes.
Kaelyn:30:20 I know. Um, the print books are even trickier with that because you have to, you're looking at books that were purchased by a bookstore that may still be sitting in the bookstore and haven't been sold yet.
Kaelyn:30:32 But for my purposes, that doesn't matter as long as the bookstore has it. That's what I'm most concerned about. Um, the next thing you have to do is go through and normalize everything. And with Amazon, they will sell your ebooks internationally and then it just all gets funneled through the one Amazon account. Um, like I said, I'm not going to get into the international stuff too much because, uh, with print books especially, it's very different. Amazon people can buy the book internationally, no problem. So, um, you have to go in and do all the currency conversions and normalize everything. Then you gotta take all this giant list of everything you've sold and break it out by author.
Kaelyn:31:14 So now at Parvus we have, um, you know, authors with multiple books. So that -
Rekka:31:20 Which might mean multiple contracts.
Kaelyn:31:20 It might mean multiple contracts and multiple advances. So then you have to go and take that and figure out like, okay, Author X had, and you know a Y advance, they've earned Z,
Both: 31:35 [laughs]
Kaelyn:31:35 So on
Rekka:31:38 Or just eat some alphabet soup
Kaelyn:31:40 [laughs] So on this book, so I have to apply that amount to this book. But wait, then they sold this many of book Q and they earned that on it. And you get all of this information together, figure out how much money you owe to who, and then put together a royalty statement. Um, one of the things I'm going to, I'm going to stop here and I'm gonna toot Parvus's horn a little bit. We're very transparent. Um, we send detailed lists of sales. I don't think any one of our authors actually look at them.
Rekka:32:14 That is not true.
Kaelyn:32:15 Okay Rekka looks at them, which isn't surprising. Um, but like, you know, it's hundreds of lines on a spreadsheet and it's, we're, we're very upfront about this stuff. We want you to see here is the book that you sold on Amazon. Here's the rate Amazon game, and here's what your royalty percentages and it was in US dollars. And so it comes out to this amount. Um, but we know that everyone's not going to look at that. And if they do, it's not going to mean too much to them. So the other thing I put together is a royalty statement, which is you sold this many of this book this month, this many of this one. You earned this amount on each of them. Here's how many you've sold all time, and here's how many you have, how much money you've earned all time, and here's how much you've earned this quarter. We do ours quarterly. Um, and then we send the payment based on, you know, what they're owed for that month. Um, if you're still earning out your royalty, there'll be another little section from me down at the bottom that says, hey, here's what your royalty was. Here's how much you earned towards it this quarter. Here's how much you have left to go. So it's, it's summarized, you know, it's just a little thing. You should be getting those.
Kaelyn:33:23 And I am shocked the number of authors I talked to that have never seen one, never seen one, and don't ask for one.
Kaelyn:33:31 I can't believe sometimes the authors I talked to that don't know if they ever earned out their advance. You have to pay attention to this stuff and advocate for yourself. Because I'm not saying that publishing houses are trying to steal from you. It's that if you don't ask for it, they might not provide it because maybe they're like, oh, that's one less thing I have to do.
Kaelyn:33:58 But here's the thing, people make mistakes sometimes too. I mean, when you're dealing with this much information, you could, you know, a decimal point gets moved one direction to the other and it throws everything off. So pay attention to this stuff, ask for it, never feel embarrassed for asking for it. And if anyone tries to make you feel embarrassed for asking for it, push back on them.
Rekka:34:18 Right. Don't and make sure if you want that it's in your contract that you can see the accounting.
Rekka:34:25 Again, the contract is a lovely piece of paper that -
Kaelyn:34:28 Everything is negotiable.
Kaelyn:34:30 Um, so that's, that's kind of what is going on in the other side. So dovetailing onto that, how does, how has this happen? How does the money get down to the author?
Rekka:34:43 Um, they leave some quarters under your pillow.
Kaelyn:34:46 No, at night we fly in and, you know, just deposit it, teeth are not - it's fine. We don't need the teeth anymore.
Rekka:34:52 Um, you've already had your teeth knocked out.
Kaelyn:34:56 The, the rundown is basically this, we start with the reader at the bookstore. Amazon.
Rekka:35:01 An individual person makes a decision to purchase a book.
Kaelyn:35:04 They picked it up or they looked at it online. They said, you know what, this sounds like something I want to read. I will give someone money for this.
Kaelyn:35:11 So -
Rekka:35:11 And thank you for that.
Kaelyn:35:14 [laughs] Um, it's a little different with bookstores and ebooks. So if they do it in a bookstore, they go, they pay the bookstore. Now the bookstore, if you are distributed, if you're through a traditional publisher that's distributed, the bookstore has already paid the distributor for the books.
Kaelyn:35:33 So the publisher is getting their money from the distributer, the publisher then in turn calculates the royalties and the payments that have to go out. If you have a literary agent, your check is going to your agent first.
Kaelyn:35:48 They're going to cash it, take their, you know, how, whatever their percentage is, their 15, and then the literary agent is going to write you a check for the remainder of it.
Kaelyn:35:58 If you don't have a literary agent, the publisher should be sending the money right to you.
Kaelyn:36:02 For ebooks, same thing, you know, you're looking at the book, I like this, buy it on Amazon. Amazon is going to pay the publisher. Now you can have distributors through ebooks. Um not, you know, not uncommon, actually, fairly common. And again, so if that's the case, the Amazon is going to pay the distributor and then the distributor is going to give it back to the publisher.
Rekka:36:31 And it still in that case, based on each individual sale, not like the bookstore situation where they're bought ahead of time.
Kaelyn:36:39 It's not a list price, yeah. Um, so then it's the same thing. The publisher is going to calculate the royalties. If you have an agent, it goes to them first. If you don't, it goes to directly to the author. Um, what you're noticing along the way here is everyone is taking a little piece off of this. So you're starting with a pile and then everyone's taking a little bit of it and you, the author are the last person to get the pile.
Rekka:37:02 However the pile comes to you.
Rekka:37:06 At no point, do you write anyone else a check.
Kaelyn:37:08 Yes. The pile should, even if it's a smaller pile than when it started, the pile should be coming to you. Do not give anyone money. Just don't.
Rekka:37:19 Yep. It's, it's not how this works. Yeah.
Kaelyn:37:22 If you're self publishing, fine, then you have to pay for things.
Rekka:37:25 Right. But again, that's you're not paying for, it's tricky to say what, what the difference is in terms of what you pay for as a self publisher, you will be paying contracted people to edit your work. You'll be paying contract and people to do your covers. Those are investments. Those do not come out of your royalties. So when it comes to the process of like, how do I make someone buy my book, there are things that you'll be paying for once the book is in bookstores that hopefully will result in a sale. But this is not like, hey, the distributor got returns and now you owe them $20.
Kaelyn:38:11 Yeah, yeah, exactly. So that is, you know, how do I get paid? Way in the future and not as much as you think.
Both: 38:22 [laughter]
Kaelyn:38:22 Um, it's, it is a trickle down process. So if your book sells well eventually the money will be coming in. But again, even if it doesn't, no one should be you for your advance back.
Rekka:38:36 Right. And I just want to emphasize, you know, everyone in this digital age where you can just upload a file to Amazon and get the biggest amount of royalty for the ebook sale as possible. People want to know why the publisher is taking such a big cut, et cetera. The people who take cuts are the people who are putting themselves at risk for the sale of your book. You have put yourself at risk if you're a self published author completely. It's all your risk.
Kaelyn:39:05 Yeah, it's all you.
Rekka:39:06 If you are going through a publisher, they have given you money in the form of the advance. They have paid for a distributor to print and warehouse books - W
Kaelyn:39:15 hich by the way is not cheap.
Rekka:39:19 Noooo. Um, it's not as expensive as it used to be for the printing, but the, I mean they kind of even it out and make up for the difference in probably the warehousing costs these days.
Kaelyn:39:28 The margins on print books are not great.
Kaelyn:39:32 Um, it is, it is not as expensive to print a book, especially a large group, batch of them as it used to be. It's still not cheap.
Rekka:39:42 Right. So when you, and I'll go back to self publishing as the comparison for like the most you could expect to get for something. Um a self published author will be usually going through a print on demand service, which means that book is being printed one at a time, which means that book is as expensive to produce as possible. That book is, it's getting printed on a one off run. If you've ever taken something to um, you know, staples to have it printed and you notice that the price to have one copy is 10 cents, but by the time you're printing 500 pages, you're paying more like 6 cents a page. That's because the, the labor involved in printing one is higher than the Labor involved in printing a large quantity of the same thing. So when you are paying a distributor to print your book, you are saving money per book, but you are investing in advance to have them all printed at once. And that's why print on demand sort of like made self publishing blow up in a new level even that ebooks hadn't is that now you can just print what sells, which is great, but you are making less per
Kaelyn:41:02 Yeah, you're not, I mean you are not making much on print, on demand box.
Rekka:41:05 And even when you get the, the distributors, um, bulk price on printing, if you were to say pay out of pocket to fill your garage with hard copies of your book, you are still not making a large margin on those books. It's nothing compared to the margin you make on ebooks and digital.
Kaelyn:41:26 Yeah. So um back to what Rekka was saying. You know, why is there so much constantly coming off of this? Everyone has expenses. Books are not cheap to make. Um, you know, I think we think like, oh well it's fine. It's a book. So like what's the big deal? You have to print it. Well, no, you have to pay the various editors -
Rekka:41:50 There is a layout person and there's a copy editor.
Kaelyn:41:53 Illustrator. There's the cover art. The marketing. Marketing is very expensive -
Rekka:41:58 That it never goes away.
Kaelyn:41:59 It never goes away, exactly. And which by the way, that's where a lot, that's a lot of the money that goes into this. Um, it is expensive to make a book. It's a lot of people involved and it's a far more complicated process than I think a lot of people realize.
Kaelyn:42:27 So it's a whole other debate, you know, whether or not the publishers take too much off the top, but there is a reason for it because a lot of books don't always even recover their entire cost. The publishing companies are paying you, even when you know you've earned out your advance, that's money they already gave you. So then on top of that, you may earn about out your advance. The publisher may not recover everything they spent on the book.
Kaelyn:42:50 Everything is so subjective. You really, it just depends. Um, so I think that's, that's most of the, the technical side of things. Uh, one, one question we did kind of come across was, so if I'm, if I've got multiple offer offers, if I'm lucky enough to have multiple offers, do I just take the one that's offering me more money?
Rekka:43:12 Which might be your inclination.
Kaelyn:43:13 Yes. And my answer to that is maybe. Um, let's look at the contract, look at the contract and look at what you're getting out of it and look what you like before you even receive.
Rekka:43:25 Like I would say it's maybe too late for some of our listeners now, sorry about that. I should have shown up before, but like before you start querying your book, have a goal in mind. Like what is your picture of success?
Rekka:43:41 And your contract may not need to have as many zeros as possible for you to feel like you have successfully published a book.
Kaelyn:43:51 Yeah. And think about when you're looking at the contract, what are they giving you in there? Like, okay, maybe they're not giving you as much of an advance as you were hoping, but do they have a lot, a good marketing plan? Do they have like a lot of time and money that they're going to dump into making sure people read your book because then that's gonna make you money.
Kaelyn:44:14 Eventually. Um, if you're looking at this and going, you know, I just kind of want to get as much out of this as I can and get the book out there, then maybe you're more interested in a bigger advance. Um, it isn't, the point I'm at is a slight cautionary tale is don't immediately jump at the biggest dollar sign if you have multiple offers. Because some of it is also going to be like, okay, awesome. How much effort are they going to put into making sure this book continues to sell? Because in the longterm, that could be where you make your money.
Rekka:44:53 Right. You could actually make more in your royalties after the advance than you make on the advance. One hopes that that's what's going to happen and you need a publisher who's interested in selling your book for the long run versus a publisher who's going to give it three weeks of attention after the release date and then move on.
Rekka:45:10 If you have a publisher who is, you know, far more interested in, um, you know, using their back catalog for most of their income, then that's going to be a longer term game and you can -
Kaelyn:45:26 And they'll want to market your book and make sure people still buy it. Yeah. Um, so, you know, just it's another, read the contract, be aware, but you know, decide what's important to you. There's no right or wrong answer there. It's just a matter of, like Rekka said, decide what your goal is, like what you want for this book. And don't be afraid to talk about money.
Kaelyn:45:48 It's, you know, we set in the beginning of the episode, it's taboo. It's, you know, I think almost perceived as rude
Rekka:45:56 Or if I care about money than am I really a creative person?
Rekka:46:01 And well, I don't care if you feel like a creative person while you're negotiating a contract. Frankly -
Kaelyn:46:08 You should be the embodiment of Rockefeller at that.
Kaelyn:46:12 Go in there and be horrible.
Rekka:46:13 And because your publisher may love books, but they're running a business. The bookstores love books, but they're running a business. The distributors love books, but they're running a business. You write books, but you're running a business.
Kaelyn:46:25 You as the author, you are your business, you are your own brand and advertising. You come along with this book. So don't be afraid to ask about these things. It's not insulting you're not - to be honest with you, on my end, when people ask me about it, I get relieved because now granted I work in finance, I work in business. So like we're very used to, you know, money talk. And it is funny because I go into like contract negotiations with clients, like it's talked about -
Rekka:46:59 Nobody's afraid.
Kaelyn:46:59 It's talked about like it's nothing. And it's like, look, I'm not saying, you know, you have to go in there with like the negotiator hat and mustache on, but -
Rekka:47:07 Is there a negotiator hat and a mustache?
Kaelyn:47:09 Oh yeah. I wear them to every meeting I go to.
Rekka:47:12 We'll post a photo of that on Instagram.
Kaelyn:47:17 But don't be afraid to talk about it and ask questions because also I know on my end that a lot of people that I'm working with, this might be the first time that they're kind of addressing this sort thing. And there's nothing wrong with not knowing. Your publisher is your partner. They're not there to take advantage of you. They're not going to lie.
Rekka:47:36 They shouldn't, you know.
Kaelyn:47:37 But they won't lie to you and give you bad information about these things. Don't be afraid to ask questions and don't be afraid to say, listen, I don't understand this. I don't want there to be a problem down the line and don't be afraid to talk about money. You are your product. You should get paid for what you've created.
Kaelyn:47:58 So, um, on that note, I think that's a good, good last.
Kaelyn:48:03 Sentiment to leave on.
Rekka:48:04 And there's a lot of stuff. There's a lot of contract topics that we didn't get too far into because we do want to have at least one future episode on contracts.
Kaelyn:48:12 Yeah, just contracts.
Rekka:48:14 And so that will be where we'll do a deeper dive into where maybe you can look for opportunities to ensure that you're going to get as much as possible. But that's a whole other.
Kaelyn:48:26 That's a whole other episode. So anyway, so how are we doing on time?
Rekka:48:31 We're, we're way over.
Kaelyn:48:33 Um, so anyway, that's the money up at the dreaded money episode everyone got through. We're all still alive.
Rekka:48:38 We all love getting paid. So I don't know why we have to say that. It's all dreaded. It's -
Kaelyn:48:43 But it is. I mean, it's, you know, but you beloved listener, um, I hope you're so alive and listening and if you're not, I hope you have as queued up on autoplay [laughs].
Rekka:48:54 Um, so hopefully before you passed away, he left this rating and review.
Kaelyn:48:59 Yeah. So anyway, thanks for listening again. Uh, you know, you can find us on the socials as usual.
Rekka:49:05 Yep. Yeah, we are @WMBcast on Twitter and Instagram. We are at WMBcast.com or WeMakeBookspodcasts.com, and uh, whatever survives Apple's transfer away from iTunes. Please leave us a rating.
Kaelyn:49:22 Yeah, this is going to be scary.
Rekka:49:23 I don't really know.
Kaelyn:49:24 I know. We don't know what's happening.
Rekka:49:25 Is the algorithm going to change?
Kaelyn:49:27 They've been very, they've not been putting information about what's going to happen.
Rekka:49:31 Yeah so maybe by the time this episode airs that will all have settled and you will know exactly where to go and leave us a star rating and review so that other people can find us. Assuming that the algorithm works the same way.
Kaelyn:49:43 Sure it will. And as always, you know, please reach out to us. You know, like maybe you had another question about money that uh, we didn't get to your episode.
Rekka:49:50 There's definitely more to talk about.
Kaelyn:49:52 We can, uh, do some questions. You know, one off questions in the future and you can email us or DM us.
Rekka:49:58 Yeah, the dms are always open. They're wide open to the, you can ask us questions that you're embarrassed that you don't know and that's fine. That's great stuff. We want to hear those questions. There is no topic that's too small. There's no, you know, quote unquote stupid questions. You know, just send us your questions so we can help you understand what the whole thing with publishing is, because it is a whole thing.
Kaelyn:50:22 We want to make this less scary. Yeah. Alright. Well, again, thanks everyone for listening and we'll two catch you in two weeks.
Rekka:50:29 Yeah, two weeks.