How Do Authors Make Money? Self-Published vs Traditional Authors
In 2022, the Authors Guild reported that the median author income for full-time authors from their books was $10,000 in 2022, and their total median earnings from their book and other author-related income combined was $20,000. That means that for the first time, authors make as much money from non-book sources as they did from writing books!
Basically, authors make money through royalties, advance payments, and other writing skills. Let's break it all down.
For an aspiring author, the question of how to make money often comes up. Authors need cash to fund their notebook collections and TBR piles, of course.
There are various ways authors can earn income in both the traditional publishing and self-publishing worlds.
First, it is important to consider the different types of publishing options available to authors. One option is self-publishing. Pros: you retain control over your work and typically get higher royalties from ebook and print book sales. Cons: no huge force behind you to help you succeed.
The other option is traditional publishing, which involves working with a publishing company that will handle the production, distribution, and promotion of the book. Pros: You get an advance payment – great! Plus, the publishing house normally gives you an editor, a design team, and some marketing help. Cons: Lower royalties, plus you have to actually be accepted by one first.
Additionally, authors are typically good writers – no surprise there. Since book sales sometimes don't cover a full-time wage, some authors use their writing skills in various ways, such as freelance writing gigs, teaching, and applying for grants, among others. It is important for writers to explore multiple revenue streams to maximize their income potential and sustain their writing careers.
Traditional Publishing
Securing a Publisher
Publishers play a crucial role in the traditional publishing process, as they provide the resources and expertise needed for a book to succeed. As an author, my primary responsibility is to write a high-quality manuscript and submit it to potential publishers. Established authors usually have a better chance of securing a publishing deal due to their proven track records.
Role of Literary Agents
In my experience, having a literary agent can make a significant difference in the traditional publishing process. Literary agents are professionals who represent authors and negotiate with publishers on their behalf, helping secure favorable deals. They can also provide valuable advice on improving my manuscript and navigate the complex contracts and rights associated with publishing.
Understanding Advances
When a publisher decides they like your book writing, they usually offer you an advance payment. This is a sum of money given to you before the book is published, essentially representing the publisher's confidence in your manuscript's potential success.
Advances can range from a few thousand dollars for a first-time book author to several hundred thousand dollars for established authors with multiple books (looking at the James Pattersons of the writing world). It's important to note that you'll need to earn back this advance through your book's sales before you can start collecting future royalties.
Payment Rate and Royalties
In addition to advances, as an author, you receive royalties from my book's sales once you've earned out your advance.
Royalty rates differ depending on factors such as the format of the book (e.g., ebook, paperback, or audiobook), the retailer, and the pricing of the book. For example, self-published authors' royalties can reach up to 70% for ebooks, while traditionally published authors might receive 5-18% royalties once they "earn out" their advance.
Distribution and Reach
One of the most significant advantages of traditional publishing is the extensive distribution and reach offered by publishers. They often have connections with major retailers and a well-established network of distributors, making it more likely for a book to be prominently displayed in bookstores and purchased by readers. This wider distribution can lead to increased sales and greater visibility for your work, further establishing your reputation as an author.
Examples of Successful Traditionally Published Authors
Stephen King, James Patterson, and Colleen Hoover are some of today's most successful authors. Their author income reaches the millions, and I imagine each book advance is in the six figures.
Read→ How much do best selling authors make?
Self-Publishing
Understanding Self-Publishing
In recent years, self-publishing has become increasingly popular among authors looking to take control of their work and earnings. By choosing to self-publish, you bypass traditional publishing houses and directly reach my target audience. This allows you to potentially earn up to 70% in royalties for your ebooks, as opposed to 5-18% through traditional means.
The Indie Authors Revolution
Indie authors are part of a growing community that not only supports each other but also shares valuable knowledge and resources. This movement has also given rise to platforms like Amazon Kindle Direct Publishing and Smashwords, which provide authors with the tools they need to publish their works and reach readers. Indie authors are increasingly successful, with some earning over $10,000 per month.
Genre Impact on Earnings
The genre of your book also has an impact on your potential earnings in the self-publishing world. Certain genres, like romance, mystery, and science fiction, have proven to be more lucrative than others. This is because these genres typically have larger and more dedicated reading communities.
Marketing Efforts and Reach
In the self-publishing landscape, you must take the lead in marketing your books. This includes utilizing social media, author websites, email lists, and other promotional tools. These marketing efforts are crucial in order to drive book sales and increase your reach. Investing time and resources in marketing not only helps you reach your target audience but also establishes your brand as an author.
In conclusion, self-publishing has many benefits, including control over my work and potentially higher earnings. By understanding the different facets of self-publishing and putting in the necessary marketing effort, you have the opportunity to reach a wide audience and maximize my success as an author.
Examples of successful self published authors
It's very hard to find data on book sales for best-selling self published authors, because when they get to that stage, pub houses normally snap them up. But imagine a self published author like Tricia O'Malley has sold 3,000,000 books and netted ~70% of the profits of her books, an average one of which sells for around $12.99 through Amazon KDP. That would earn her $9.1 per book, or $27,300,000 overall.
Earnings from Book Sales
Calculating Book Sales
No matter if you're a fiction author or a nonfiction author, you make money primarily through book sales. It's essential to understand how many copies you need to sell to earn a substantial income. A critical factor in calculating your earnings is the retail price of the book minus any discounts or fees. Then, factor in my royalty rate to determine how much you can potentially earn per book.
Printing Costs Influence
You also need to account for printing costs when determining the profits I make from selling books. For example, if my book has high production costs (e.g., color images, high-quality paper), this can reduce my overall earnings.
An indie author especially need to consider this aspect as you manage printing costs. A traditionally published author will probably be told a final figure from the publishing house, which won't be subject to negotiation.
Royalty Earnings Vs Advance Payment
One of the ways authors make money writing books is through royalty earnings. At a traditional publisher, royalties typically range from 10% to 15% of the book's revenue after printing costs, typically higher for more successful authors. They're higher (think more like 30-70%) for self-pubbed authors.
Alternatively, advance payment is another way traditional authors can earn money. An advance is an upfront payment from a publisher, and this amount is typically based on the publisher's estimation of your book's sales potential. It's essential to note that advance payments must be "earned out" through book sales before you start receiving royalty payments.
Overall, earnings from book sales rely on a combination of factors, including book sales, royalties, advance payment, and printing costs.
Alternate Earning Possibilities
The sad truth is that especially for traditionally published authors,a. full-time living from books is nothing but a pipe dream. Traditionally published authors earned more in 2022 from nonbook writing-related income than book-related income ($5,000 vs. $7,400), while self-published authors earned more from book income.
As an author, you should always looking for new ways to expand your income streams by using your writing skill beyond just writing books.
Professional Speaking Opportunities
One of the avenues many writers have found beneficial is professional speaking opportunities. By sharing expertise with others through conferences, workshops, and seminars, you can not only generate additional income but also increase visibility and credibility in the industry.
These engagements can come in various formats, such as keynote presentations, panel discussions, and workshops. They allow you to connect with fellow authors, aspiring writers, and those interested in the topics you cover in my books.
Ghostwriting Projects
Another option to consider is taking on ghostwriting projects. I do this a lot as a freelance writer.
As a ghostwriter, I am hired by clients to write content on their behalf, usually in their voice, and without any credit to my name. These projects can range from articles and blog posts to entire books, depending on the client's needs. Ghostwriting is a very lucrative aspect of my writing career, as it provides a steady stream of work, allowing me to utilize my writing skills while maintaining a flexible schedule.
Career as a Copywriter
Lastly, becoming a copywriter is another way to make money as a professional writer without relying solely on book sales. As a copywriter, I write compelling marketing and advertising copy for a variety of clients. This type of writing focuses on promoting products, services, or ideas, and requires a different skill set than writing books.
Establishing an Author Platform
Nowadays, it seems like any hot TikTok influencer can publish a book and get a book deal within the publishing industry. That is not a coincidence.
Traditional publishing houses especially are looking for authors than can market themselves, though I will note that not many of these have turned into a bestselling author. As an indie author, you also need to have a platform to market and sell your books.
Importance of Author Platform
An author platform is crucial for any writer looking to succeed in today's competitive market. It allows you to showcase your work and engage with your target audience, which in turn helps in building your personal brand as an author.
A great example is the author of Iron Widow, Xiran Jay Zhou who is very popular and active on TikTok. That is how she got her book deal.
Building an author platform involves creating a website, blogging consistently, building an email list, and leveraging social media in the digital book world, as well as other offline avenues such as libraries.
Author Earnings
Earning Potential and Full-Time Income
As an author, the potential for earnings varies significantly depending on factors such as the publishing route chosen, genre, marketing efforts, and the overall quality of the work. Some authors make millions, while others struggle to earn a full-time income. The average salary for authors is $43,603 per year. However, this number doesn't paint the full picture, as author earnings can have a wide range.
Understanding Author Earnings
To gain a better understanding of author earnings, it's essential to consider the various income streams authors have access to, including:
Book sales: The primary source of income for a published author, at least indie ones, is the sale of their books, whether it's physical copies, ebooks, or audiobooks.
Advances: For traditionally published authors, advances are payments they receive early in the process. These advances are then recouped by the publisher through the sale of the book, after which authors begin earning royalties.
Royalties: Authors receive a percentage of each book sale, known as royalties. Royalty rates vary depending on factors such as the publishing path chosen, the format of the book, and the sales channel.
Subsidiary rights: Authors can also earn money through the sale of subsidiary rights, such as translations, media adaptations (film, TV, etc.), and merchandising.
Public speaking and events: Many authors make additional income through public speaking engagements, workshops, and book signings, using their expertise and author platform to generate revenue. This is how many trad authors are making more money nowadays.
In conclusion, author earnings vary depending on the publishing route chosen, genre, marketing efforts, and the overall quality of the work. However, with dedication and strategic planning, authors can maximize their earning potential and even turn their passion for writing into a full-time career.
Final thoughts on how authors make money
In my head, authors live in remote coastal cottages, typing on typewriters to the sound of a salty ocean spray. Maybe they write the next Great American Novel and become an instant bestseller.
But the truth is most authors make money the same way the rest of us do: grinding. Lucky ones get big advances and a higher royalty rate, or develop a big enough following on social media to become a successful author that way.
