Advances/Royalties

When a publisher buys the rights to a manuscript, it pays for the purchase with a contract agreeing to pay royalties, a percentage of the book’s sales, for the life of the book.

The publisher agrees to cover all the expenses of book publication (but not marketing). There are two important components to the calculation of royalties. First is the royalty rate, which is the percentage to be paid.

Second, is the base, which is how the sales number is calculated, and on which the royalty rate will be applied. The base is usually net sales – the actual dollars paid for the books, not the retail price.

Finally, there is a percentage for returns that may come later, which the publisher holds out, usually about 20% of the royalties owed.

An advance is an upfront payment of the expected royalties that the publisher expects to ultimately pay for the book. It is not an extra payment, as many authors think.

Royalties are paid once, twice or four times a year. The publisher holds back a percentage of the sales, in case additional returns come in.

Tanyab 08:12, 5 December 2008 (UTC) | www.publishing-store.com