Royalty publishing (a.k.a. traditional publishing) means a publishing house signs you to a contract, gives you a nice author advance, polishes your manuscript, turns it into a book, and puts it on shelves. This model gets its name because the publishing house pays you royalties on each book sale.

But before you get stars in your eyes about author advances and royalties, there are a few things to know. Advances are just that—an advance against future royalties. If your book doesn’t sell enough the advance will be the only money you receive from your publisher. And the reality is that most authors could never live on advances alone, even if they were signed to one of the big publishing houses.

An article in a December 2008 issue of the National Post noted advances you might expect from a royalty publisher:

• $10,000 to $30,000 from bigger players, such as Random House or HarperCollins
• $5,000 to $15,000 from mid-sized houses, such as Thomas Allen & Son or Douglas & McIntyre
• $1,500 to $5,000 from smaller presses, such as Cormorant or Coach House

Ready to learn more about royalty publishing? Let’s look at the pros and cons around money, creative control, timing, sales and marketing, credibility, chances of being published, and working with agents.

Money
With royalty publishing, your financial investment is practically nil. Your publisher foots the bill for editing your manuscript, creating the cover design and layout, printing, shipping, warehousing, and other expenses. But your earnings with a royalty publisher are low. Typically, a publisher pays royalties of anywhere from 7 – 10% on the book’s retail price, and an agent takes 15% of the royalty. On a $20 book, you’d earn $1.60 per copy sold. If you sold 10,000 books, your payout would be just $16,000.

Creative Control
When you sign with a royalty publisher, they buy your print rights. As your book’s owner, your publisher has the final say in major decisions, such as the title and cover art. Your publisher also decides how long your book stays on the market and when it goes out of print. These are all decisions you many not agree with, but will have to live with.

Timing
Royalty publishing is not speedy. From pitching your book through to launching it in stores could easily take a couple of years. Timing a book release to coincide with another event, such as the launch of your new business venture, a new product, or a speaking tour, is not always possible. If you want to get your book out as quickly as possible, the royalty model may not be for you.

Sales and Marketing Support
With royalty publishing, your publisher secures distributors and gets your book into bookstores. The publisher sets pricing and discounts, negotiates with suppliers, issues invoices, and processes returns. In short, they manage the business side of selling your book. But marketing your book is another story. The bulk of most publishers’ marketing budgets go to the house’s well known and bestselling authors. The dilemma of how to become a bestselling author without marketing support is generally up to the author to resolve.

Credibility
Royalty publishing is a vetted art. Long before a book becomes a book, a team of highly specialized reader-editors has judged it worthy of being committed to print. It’s true that your publisher’s name doesn’t typically factor into a consumer’s decision to buy or read a book. However, there are people who care who your publisher is and they are people it pays to know—distributors, wholesalers, booksellers, and reviewers. Self-publishing carries something of a stigma in the traditional book trade. Being published by an established house will eliminate that particular hurdle.

Chances of Getting Published
Getting signed with a royalty publisher is tough. Budgets and staff are being slashed nearly everywhere. If you talk to editors, many will say they’re looking for fresh new voices and that they like to take chances on books. They will also say they have to be realistic. Publishing is a risky, low-margin business for the royalty houses. They might take on publishing three or four unknowns out of the multiple thousands of manuscripts they see every year. If you pursue a royalty publisher, be prepared for rejection slips.

Working with an Agent
Most of the big publishing houses have closed their doors to unsolicited manuscripts due to the incredibly high volumes they receive—according to one estimate, between 3,000 and 5,000 manuscripts per week. That means if you want to be published by one of the bigger publishing houses, you’ll definitely need an agent. While some smaller publishing houses will accept manuscripts directly from the author, a good agent’s expertise can be invaluable when it comes to negotiating a contract. We’ll talk more about finding and working with an agent in an upcoming post, so check back soon.

Royalty Publishing: The Pros
o Requires little administrative attention
o Requires little to no financial capital
o Avoids stigma often attached to self-published books

Royalty Publishing: The Cons
o Earning potential is much lower than with self-publishing
o Can take a long time
o Publisher controls the details
o Manuscript may be rejected

Next up: A look at subsidy publishing and what all the confusion is about.

Barnes & Noble just announced they are creating a distribution platform for independent authors to sell self-published books on the B&N website –- e-books only.

Smashwords allows anyone who can create a MS Word document to self-publish and distribute on nine platforms including Amazon Kindle, Barnes & Noble, Sony, Kobo, Apple, and the Smashwords site itself — e-books only.

Of course, Amazon has offered e-book distribution through the Kindle for what seems likes ages now.

So there are many ways to sell and distribute an independent book as long as it’s an e-book.

But if you want to sell a p-book –- that’s a traditional paper book — as a true self-publisher, you have limited options: your own website and Amazon. That’s about it.  Only Amazon offers a program to allow easy sales and distribution of paper books, books that still make up at least 95% of all book sales.

The Amazon program is pretty simple. For $29.95 USD per year, you can have a seller’s account on Amazon.com and your book is listed in their search engines. They won’t keep many copies in stock, so your sales need to drive their purchase orders. But they guarantee you 45% of the retail price of your book. Not great, but manageable. When you start to sell in volume (i.e., you’re shipping them cases of books rather than one or two books at a time), it starts to pay off. They pay you each month with a direct deposit to your bank account. Plus they are the largest e-tailer in the world, so there is value in the exposure you get.

Oddly, as everyone rushes to compete in the emerging digital market, they are leaving Amazon to its monopoly on p-books for the self-publisher. No one wants to challenge the mighty Amazon? Really?