PS on top: I found some posts by other smart folk like agent Mandy Hubbard and author Jim C. Hines - if you want to like, double or triple-reinforce the point I'm making. But I'd already started typing by the time I saw those soooo... here you go. And this post started life as a comment on an SCBWI message board thread, if it looks familiar to you, that's why. Thanks, SCBWI, for so often giving me blog post ideas! ;-)
One of the questions I dread most at conferences is, "how much money do books make?" I have a sort of pat answer I usually give, whilst eye-rolling. Something along the lines of "somewhere between $1 and $1,000,000." or "I dunno, how long is a piece of string?"
But let's get real. Many new authors will probably be offered $4-8,000 on a debut picture book text-only to a normal mid-sized traditional publisher. $5-12,000 on a chapter book. $8-20,000 on a middle grade novel. $12-30,000 on a YA. I'm talking average - yes, some will be higher, some lower, and no I haven't done an official poll, but I bet I'm right.
These numbers will be much lower for small presses (and probably much MUCH lower for digital publishers or startups). The numbers will be higher for extremely commercial books with great crossover potential, or for an author who is well-known, or if there is lots of competition for a title or it is "hot" in some way. (The numbers may also be different depending on what rights you sell.) Still, these would be what I'd consider to be unexceptional starting offers. Nothing to get mad about, just, you know. Normal.
Yet we all know of people who got paid a lot more than that.... so what about THEM? Well, first of all, I'd say they are outliers. Yes, I have certainly had awesome six-figure debut sales. But they consist of maybe -- 10% of deals. Most are Normal. On the high side of what I quoted above, perhaps, when all the negotiating is done, but still, not megabucks.
SHUT UP JENNIFER! SHUT UP! THIS IS DAYDREAM TIME!
OK fine. Cue the mystical bossa nova music and IMAGINE IF YOU WILL:
You're a new author - maybe you don't even have an agent yet, but you are actively querying, reading all kinds of Publishers Weekly deal announcements, and dreaming of the day your very own manuscript will go on submission and sell, too.
These magic words echo in your daydreams.... six-figure deal. SIX-FIGURE DEAL! With that kind of money, you could quit your day job, pay for your kid's college tuition in cash AND afford to supersize them fries, possibly from the comfort of your Mercedes-Benz. CHA-CHING, AM I RIGHT? Soon you'll be in a beach house, smiling gently whilst typing away on your latest brilliant novel. Everything is clean and inexplicably made of white linen or similar and somebody has brought you a cup of tea and there's a cool ocean breeze that also somehow smells of chocolate chip cookies and all the cares of your old life behind you--
Not so fast, Hoss. Here comes the dream-shatterer. *music screeches off*
COMMISSION: If you got a six-figure deal, you probably have an agent, too. Your agent will take 15% of your income (possibly 20-25% in the case of foreign income or film deals). This is money worth spending, because without your agent, you would have probably had a lot less dough in the first place, or nothing at all. And your agent is protecting your interests and guiding you in the long-term. OK, fine. But don't forget about --
TAXES: Even if you have a day-job, when you get paid for writing, you are also self-employed. A freelancer. As a writer and US Citizen, you have to pay both Income Tax AND Self-Employment Tax on everything you make writing. Does that suck? Hell yes it does. Sorry. You can expect to pay about 30% of your writing income in taxes. Possibly more.
ETA while we're on this topic - As a freelancer, you will also be expected to pay taxes 4x a year rather than just in April. (This is good in a way - less painful to write four medium-sized checks than one huge one... but bad in another way - like, you have to have enough money 4x per year. And remember. UGH) (One day I'll do a blog post just about this, aren't you lucky!)
Also: I might sound like a broken record on this one, but seriously, if you are going to be a career writer, TREAT YO' SELF to a good accountant who knows a lot about artists and freelancers. They will save you much money and angst in the long run, and, your accountant's fee is tax-deductible.
EXPENSES: As I said, you're self-employed. All the fun stuff like office supplies, a new laptop, travel to some conference or bookstore, HEALTH INSURANCE, etc? Probably coming straight out of your pocket. The good news is, anything related to your writing job, including said office supplies, your office space, travel for research or promo, and other self-promotional stuff, is tax deductible, at least in part, so keep good records. The bad news is, well, you have to pay for it in the first place, "tax deductible" doesn't mean free. (As far as insurance, unless you're lucky enough to have a great day job or a spouse who can provide, well... thanks, Obama. Seriously... thanks, and God bless you, Sir.)
PAYOUTS: Most book deals in the US kids book world are structured so the payments are split into 2 or 3 parts. (Many huge deals and books in the grownup world are divided even more than that!) So you get one part on signing, one part on delivery and acceptance (D+A) of the final manuscript, and sometimes one (often smaller) part on publication.
SO LET'S CRUNCH THE NUMBERS. If you luck out and get a "six figure deal" from a good American publisher today, assuming all works according to schedule in a perfect world, and your agent doesn't have to chase down any money for you, and your publisher doesn't go under, and your editor gets notes to you in time, and you have no crises ... your deal (including taxes but not including expenses) might look something like this:
March 2015: Make the deal! Yay! It's a nice one. 2 books for $100,000 total! Welcome to the six-figure club! :D
April/May 2015: Your agent gets contracts and negotiates!
June 2015: PAYMENT - on-signing, 20k each book, 40k total - minus 15% for agent, and let's be generous and say 25% for taxes because of that great accountant: $24,000 total
November/December 2015: Book 1 Due (for publication Winter 2017)
January 2016: PAYMENT - D+A book 1, 20k - minus 15% for agent, 25% for taxes: $12,000 total
November/December 2016: Book 2 Due (for publication Winter 2018)
January 2017: PAYMENT - - D+A book 2, 20k - minus 15% for agent, 25% for taxes: $12,000 total
February 2017: Book 1 Publication
March 2017: PAYMENT - On-Pub Book 1, 10k - minus 15% and 25%, $6,000 total
February 2018: Book 2 Publication
March 2018: PAYMENT - On-Pub Book 2, 10k - minus 15% and 25%, $6,000 total
So you didn't make 100k, actually, you made 60k (or less), spread out over the course of four years, and probably at least one of those years you get... not much. In this example, $24k in 2015, $12k in 2016, $18k in 2017, $6k in 2018.
I mean, you know, that's not NOTHING, it's a great deal for most kids books... but it's not exactly "bathe in champagne" time. You'd make as much or more working minimum wage at the Gap for four years.
SO, what to do?
The single best thing you can do for your career is KEEP WRITING GREAT BOOKS. Seriously. Keep writing. Success builds. Books in print, books that continue selling, may make you money for years to come. A nice fat ADVANCE is great, but ideally you'll earn out your advance and collect royalty checks for the rest of your life.
But earning out and seeing more $ probably won't happen until after the book has been released, and sometimes it doesn't happen till LONG after... and can never be counted on to happen at all. So that means that you probably won't see a non-Advance check on these particular books until late 2017 at the very earliest - probably, in reality, not until sometime in 2018. Meantime, you'll be dead of starvation. So yes. Don't quit your dayjob. Or do, and WRITE MORE BOOKS!
I could go on and on but I think that's enough out of me - maybe "how to quit your day job" can be another blog post for another day. What about you, any thoughts on this or further questions?