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## How to Calculate Potential Book Profits

Most writers have no idea how much money they can expect when their book is published. The formula, however, is fairly straightforward. To begin with, a writer generally receives an advance. An advance is payment, in advance, based on the expected initial earnings of the book. It is a negotiable amount, but once the publisher pays this to the writer, the advance belongs to the writer whether or not the book ever sells a copy. Advances range from a few thousand dollars to over a million dollars for well-known celebrity writers. If you are an unknown writer, your advance should range from nothing to about twenty-thousand dollars in the United States. Some first time-writers negotiate more, but that is the usual range.

In order to make the writer more money than the advance, a book has to sell well. If it does, your payment as the author comes from royalties, which you can calculate using the system below. A book that sells moderately well, but is not a bestseller, may or may not make the author a few extra thousand dollars. Royalties (ranging from 4% to 8% in most cases) are generally based on the cover price of the book, but that does not include books that are discounted or remaindered. So, for the sake of argument, say you sold 20,000 full-price copies of a paperback priced at \$7 (I know it would more likely be \$6.95 but I am going to use round numbers.) If your royalty percentage were a generous 8% you would make a total of \$11,200.

Surprisingly, the publisher does not make most of the money from your book. The party that makes the most money off the sale of a book is the retailer. By the time a publisher pays all of the related expenses of publishing a book (production, distribution, salaries, promotion, etc.), they generally clear a profit of about a dollar a book for a book with sales of about 20,000. Therefore, the publisher made more than you, but not that much more and they took on all the risk. Remember, if the book never sells a copy, you still get to keep your advance.

For this reason, the market for mid-range books (under 100,000 copy sellers) is very tough, and major publishers are looking for books they expect to sell in large numbers. This is why it is hard to get a fiction book published in today’s market. A first-time author or even an author with modest previous sales is going to have a hard time finding a publisher. When they do, they can expect very little by way of promotion because the publisher expects so little return for their investment.

If you do get your book published, and you want it to sell well, be prepared to spend a great deal of your own time marketing the book. Most authors think it should be up to the publisher to promote the sale of the book, but the author is the one who really needs to be out there making phone calls to bookstores, lining up press interviews and setting up readings and signings.

## 12 Responses

1. John Hewitt

I am happy that my article could be of help to you. Good luck with your book!

2. This is such good information. As I complete my book proposal, having lived in hiding for twenty years and now free, I am comforted to know there are people like you giving your knowledge to others who know much less. Tha.

3. Thank you, John Hewitt. Kathryn Keats

4. Thank you, John. It is a story worth telling. It will help many. Kathryn Keats

5. John Hewitt

Hi Sherri,
I’m glad to hear that, despite the troubles, your book is in the black. It looks interesting:
Rebel Housewife Rules: To Heck With Domestic Bliss
John

6. Excellent info, even two years later, still relevant, still true. My book was published in 2004. Oh, if only I knew then what I know now! We were fortunate to earn back our advance (\$5K, 50/50 w/co-author from a mid-size publisher), and a little more with foreign rights), but it takes a tremendous marketing effort to keep it going. Thanks for PoeWar.com — love your site!!

7. Nhlanhla Ndlovu

Dear John

I also found your article truly eye-opening and informative. I am also a firt time writer and getting to understand the way writing and publishing work has helped me plan my writing and marketing approach even more strategically. I am sharing your article with my writing friends.

Gracious,

Nhlanhla, Cape Town SA

8. Akilah

This was extremely helpful. Being a first time author and writing is just a hobby happy to know that I need to keep writing for the love of it because money may never come!!

9. Great post – seriously informative and helpful. Thanks!

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10. I am also a beginner when it comes to writing,I also think that you should approach to my readers on a physical level.Thanks for this great post.

11. Interesting information. I would say that the publisher is not the only one taking all of the risk, as the writer has invested hundreds of hours of his/her time in the writing of the book, but I see your point. I have my first book done and ready to send off and am trying to figure out if I should try and find an agent or just go directly to publishers. Well, thanks for the info, cheers.

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12. William Mesmer

Best information I have heard to date on the subject. Thank you very much.
I am working on a book that tackles the psychological aspects of parenting in todayâ€™s society. I am banking on the fact that my family name (Mesmer) will carry a degree of notoriety.
What do you think?