When an author signs a book deal with a traditional publisher, one of the first things they may hear about is an advance. This upfront payment is one of the key features of traditional publishing, but it’s often misunderstood. In this article, we’ll break down what an advance is, how it works, and what it means for an author’s career.
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What Is an Advance?
An advance is a sum of money a publisher pays to an author before the book is published. It’s essentially a pre-payment on the royalties the author will earn from future book sales. Advances are typically paid in installments, and the author doesn’t start earning additional royalties until the advance is “earned out” (i.e., the book sells enough copies to cover the advance).
How Advances Are Paid
The way an advance is paid varies slightly depending on the publisher, but it generally follows a similar structure:
- Initial Payment: The first installment is often paid when the author signs the book deal. This could range from a few thousand dollars to several hundred thousand dollars, depending on the book’s potential, the author’s track record, and the size of the publisher.
- Second Payment: A second installment is usually paid after the manuscript is delivered and accepted by the publisher. At this stage, the manuscript is typically in its final draft form and ready for editing.
- Final Payment: The final payment is made when the book is either completed or after the book is released to the public.
For example, if a publisher offers a $30,000 advance, the payment structure might look like this:
- $10,000 on signing the deal
- $10,000 after manuscript submission
- $10,000 on publication
What Happens After the Advance?
Once the advance is paid, the author begins working on the book with the publisher’s team. However, this is not the end of the story. The advance is recouped against the royalties the author earns once the book starts selling. The key term here is earned out.
What Does “Earned Out” Mean?
The advance is recouped by the publisher from the book’s sales. For example, if the book is sold for $20, and the agreed royalty rate is 10%, the author will earn $2 for each book sold. If the publisher paid a $30,000 advance, the author will not receive further royalty payments until enough books have sold to cover that $30,000.
If the book earns $2 in royalties per sale, the author would need to sell 15,000 copies before they start receiving additional royalties. In this case, the advance is earned out when 15,000 copies are sold, and anything beyond that means the author starts to earn extra royalties.
Royalties After the Advance
After the advance is earned out, the author continues to receive royalties, typically ranging from 8% to 15% of the book’s retail price. The percentage depends on the publisher’s terms, the author’s bargaining power, and the type of deal. The author may continue earning royalties on each sale until the book is out of print or until the rights are returned.
What Happens If the Advance Isn’t Earned Out?
It’s possible that a book doesn’t sell enough copies to cover its advance. In this case, the author does not have to repay the publisher for the unearned portion of the advance. However, if a book fails to earn out, it can negatively affect the author’s future publishing opportunities. Publishers may be reluctant to sign a new deal with an author who hasn’t had a successful book in the past.
For instance, if an author receives a $50,000 advance and only sells 5,000 copies of the book, they may not earn out the advance. The author won’t owe money to the publisher, but the publisher may be less likely to offer a large advance for future books.
How Advances Affect the Author’s Career
An advance is more than just an upfront payment—it can play a major role in shaping an author’s career.
Early Career vs. Established Authors
For new authors, advances are usually smaller, often in the range of $5,000 to $25,000. These advances reflect the risk the publisher takes on when publishing an unknown author. A smaller advance may also reflect the publisher’s uncertainty about how well the book will perform.
For established authors, advances can be much larger. It’s not uncommon for bestselling authors to receive advances in the hundreds of thousands or even millions of dollars. These larger advances come with higher expectations for book sales, but they also offer the author significant financial support during the writing process.
How Advances Influence Book Deals
An advance can also influence how much creative control an author has. Authors with large advances may have more freedom in their negotiations with the publisher. For example, they may have more say in the book’s title, cover design, and marketing strategy.
On the other hand, authors with smaller advances may not have as much leverage. Publishers may be less inclined to give extensive support to a book if they aren’t confident it will generate a return on the advance.
Advances and the Author’s Earnings
While an advance offers immediate financial support, it doesn’t guarantee long-term wealth. Most authors earn far less in royalties than their advance. A $100,000 advance sounds great upfront, but unless the book sells exceptionally well, the author may only see a fraction of that amount in royalties.
For example:
- If an author gets a $100,000 advance and earns 10% royalties on a $20 book, they will need to sell 500,000 copies to earn that $100,000 back.
This means that only a small portion of an author’s total earnings comes from the initial advance. The majority of their income over time will come from royalties.
Advances and Marketing
One benefit of receiving an advance is that it often signals publisher investment in the book. Larger advances are generally tied to bigger marketing budgets. The publisher may invest more in promoting the book, arranging interviews, and securing media coverage. While an author is still responsible for part of the marketing (especially if they have a platform or social media presence), a large advance may lead to more resources being allocated to book promotion.
Is an Advance a Good Thing?
Advances have both pros and cons, and whether an advance is “good” depends on the author’s goals and financial needs. Here’s a breakdown:
Pros:
- Immediate payment: Authors don’t need to wait for royalties to start coming in—they get an upfront lump sum.
- Publisher investment: A substantial advance often means the publisher believes in the book’s potential, which can lead to better marketing and distribution.
- Financial stability: Advances can give authors the financial cushion to focus on writing without worrying about immediate income.
Cons:
- Pressure to earn out: If the book doesn’t sell as well as expected, the author may not earn additional royalties.
- Lower royalties: After the advance is earned out, the royalty percentage may be relatively low, meaning the author doesn’t earn as much per book sold.
- Risk of future deals: If a book doesn’t perform well and doesn’t earn out, it may hurt the author’s chances of receiving a large advance for future books.
Understanding the Role of Advances
In traditional publishing, an advance is an important aspect of the author’s financial and professional journey. It provides an upfront payment and a sign of the publisher’s commitment to the book, but it also carries pressure for authors to sell enough copies to earn out the advance.
Understanding how advances work can help authors make more informed decisions about their book deals. While advances can offer immediate financial support, it’s important to remember that royalties and book sales will ultimately determine an author’s long-term earnings.
As an author, carefully reviewing the terms of an advance is crucial. The right advance can give you the confidence and support to focus on your writing, but a poor deal could limit your future opportunities. Always weigh the pros and cons, and remember that an advance is just one piece of the puzzle in a successful publishing career.