Generally speaking how are profits split for a published book

Generally speaking, how are profits split for a published book?


An author is rarely paid specifically on profits.
There are a couple of ways of paying an author for a book.
One is as work for hire.
In a WFH arrangement, the author is paid an agreed-upon sum for his work, often divided between signing and publication, and sometimes distributed in installments between those points.

The other is on a royalty basis.
The author gets a portion of the sales price of (more or less) every book sold.
Last I checked, 10% of the sale price was pretty common, though it can ramp up (for example, 10% up to 10,000 copies sold, 15% thereafter).
Because authors have bills to pay while they're writing a book, they usually get an advance, a sum of money paid out in anticipation of (and deducted from) royalties.
That is, the publisher fronts some of the money to the author, and doesn't pay any additional money until the royalty amount from actual sales has paid off that advance.
At that point, the book is said to have "earned out.
" But authors get that advance whether the book earns out or not, so a book which sells very badly may net more money for the author than the publisher.

That doesn't mean the publisher gets all that the author doesn't, though.
Bookstores need their cut as well.
Publishers usually sell books through a distribution network for 40-60% of cover price.
Retailers keep most of the remainder of the sale price, with a portion going to the distributor.
What this means is that a publisher may actually get about a third of the price of a book they sell.
That's more than the author gets, but with retailers, distributors, and others in the supply chain, everybody needs their cut.

Electronic distribution is different, and standards are still evolving.
Authors get higher royalties, though.


Generally speaking, profits aren't split – revenues are.

An author can expect to earn, depending on the type of book and the type of sale, 5-25% of the price received by the publisher (which will usually be the price the bookstore bought the book for, not what they sold it on for – there's a big discount involved.
) That's called a royalty.
It can also be calculated as a percentage of the RRP – the price on the back of the book, which is generally the highest price any book will ever be sold for (until you get into collectibles.
)
The publisher gets the rest of that money.
Whether that's profit or not depends on whether they've earned back their setup costs yet or not.
The whole point of the publishing business is that the publisher is taking on a lot of risk in return for most of the proceeds of selling the book, and a lot of books don't sell well enough to earn back what is spent on publishing them.

The author is usually paid an up-front advance against royalties.
So, if the publisher pays £10,000 up front, the author doesn't see any of the proceeds from sales until the book has earned more than £10,000 in royalties.
But note that if the book only sells enough copies to account for £5,000 in royalties, the author still has that £10,000 – she doesn't have to give the rest back.
And if the book sells enough copies to account for £15,000 in royalties, the author still banks £15,000 – it's just the last £5,000 comes on the back end, not up front.

The author will also have many possible 'sub-rights' in the work.
These would include the right to make audiobook editions, or to license film-makers to do films or TV, or to publish the book in foreign languages.
These can all be sold off individually by the author or agent, or they can be sold to the publisher in return for a bigger advance; the publisher will then use their resources to exploit or sub-license them as appropriate.
In the latter case, the publisher will split the proceeds with the author in proportions agreed in the publishing contract – the percentages will vary widely.


What percentage do publishers pay authors as royalties? That is a tricky question! I could say, for example, that some pay the author a 10-15% royalty (more or less) based on the book, the experience of the author, the platform they bring, the strength of their marketing plan and their financial investment in marketing, etc.
But then obviously, Stephen King or J.
K.
Rowling are going to enter into negotiations to leverage much more, right? You might also consider the question of what that percentage is based on? Retail price? Gross sales? Net profit? etc.
And what expenses or costs are being deducted?
Some publishers pay advances against royalties, others don't.
Some pay a flat amount per book, others have a sliding scale so that as the number of book sales go up, the percentage goes down.
Yet another may have a sliding scale that when sales go up, so do the percentages.
Some vanity publishers charge the author for publishing the book but then pay a higher royalty.
A trend these days is for self-published authors to pay for cover design, editing, etc.
from a “self-publishing service” in the hope of recovering their investment.
Others pay different percentages on print books and ebooks.
So, your question can't really be answered in a meaningful way in my opinion, although I am sure some will attempt to.

I am a hybrid publisher.
That's different from all that I described above.
It's a middle path between traditional publishing and self publishing.
Our royalty arrangements are and both fair and favorable for authors, however I would prefer not to give you a percentage here, but rather invite you to download a white paper that includes that information and outlines precisely how we work and how submissions are made.
2016 Relentlessly Creative Books White Paper.
pdf


The type of book will have a huge influence, but for most novels in print, the publisher gets as much of the profit than the author does much of the time — although their take is often less than the author's.
The same for most general interest non-fiction in print, rather than ebook.

For ebooks, the numbers are still in flux — especially the share of the total cost of producing an edition that should be borne by the ebook.
When the ebook becomes the primary format, authors will get as much of the profit as publishers do.

For the types of books that don't normally sell through bookstores, the numbers vary wildly, by type of book.
 

Updated: 18.06.2019 — 6:27 pm

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