There are three kinds of publishing: traditional (or trade) publishing, self publishing, and vanity publishing.
Nearly 100% of the books you see in Barnes & Noble have been traditionally published. These are books that were produced by an imprint of a publisher such as Penguin Random House, Simon & Schuster, HarperCollins Publishers, Macmillian U.S., or Hachette Book Group. (These publishers, by the way, are known as “The Big 5.”) There are also many small traditional publishers.
- Most traditional publishers accept queries only from agents. Some small publishers allow writers to query them directly.
- Traditional publishing is VERY competitive. Agents accept only a fraction of 1% of submissions as new clients. Of those, only a percentage will actually be sold to publishers.
- Traditional publishing is the professional stage. No one cares how old you are; you will not get a special break because you’re young and precocious. They care ONLY if you have written something that will make money. Agents and editors will not hold your hand, stroke your ego, or soft-pedal their criticism. It’s a tough, tough industry.
- Upfront costs: NOTHING (ever!). Nor do you have purchase copies of your book on the back end.
- The publisher assumes all financial risk. The publisher pays for editing, cover design, basic marketing, printing, and distribution. If the book fails to sell, the publisher loses money, not the author.
- Authors are paid in “royalties.” This is a percentage of the revenue for each book sold. Some publishers pay a percentage of the retail price; others pay a percentage of the price the book was actually sold for.
- The royalty amount varies according to the type of book and the number sold. Hardcover, trade paperback, mass market paperback, and ebooks have completely different royalty percentages.
Example: Book A pays 10% of retail on each hardcover book sold. The book sells 500 hardcover copies at $20 each for a total of $10,000 in revenue. The author receives $1000.
- Some publishers pay an “advance.” An advance is an “Advance on Royalties.” This is just what it sounds like — it’s an advance of the amount the publisher expects the book to earn in royalties. If the book does not sell, you do NOT pay back the advance. If the book accrues more royalties than the advance, then you will receive the additional money as royalty payments.
Example: Book B pays 7% of retail on each trade paperback book sold. The publisher pays the author a $1000 advance. In the first year, the book sells 1000 copies at $10 each for a total of $10,000 in revenue. The author earns 7%, or $700. Because the advance was $1000, the author does NOT receive additional money.
The next year, the book sells an additional 1000 copies. Now the book has earned a total of $1400 in royalties, which is more than the advance. This is called “earning out.” The author will receive the amount OVER the amount of the advance, or $400.
In the third year, the book sells 1000 more copies. Because the book has earned out, the author will receive all of the royalties earned.
Remember, had the book NOT sold many copies, the author would NOT have had to return the advance.
I’ll go a lot deeper into traditional publishing later in later posts. Now let’s look at self publishing.