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.

The Directory of Book Trade People quietly slipped past its first birthday on Sunday. When I launched the directory, I never could have imagined how it would grow. I don’t know how many listings were in the directory originally — certainly it was less than 75, maybe even as few as 50. Today there are 836 entries in 21 different categories, and more being added all the time.

Thank you to everyone who has used, tweeted, recommended, blogged, talked about, added to, edited and otherwise helped this directory develop into the resource it is now.

For the last several months, I’ve been mulling over ways to improve it, but I’d love to hear your take. What can we do to make the directory more helpful and easier to use?

I was initially excited about the Twitter List feature that was unveiled this past fall. I had planned to turn each category into a separate list. That plan fizzled when I discovered that Twitter limits both the number of lists you can have, as well as the number of people within each list. So for now, the directory continues to exist here, on our website, in its original form.

One thing you may not know is that we created some direct URLs to make referencing and linking to the directory easier. Typing in www.BookTradeDirectory.com takes you straight to the list. The companion directory of book authors on Twitter can be found at www.AuthorsWhoTweet.com. (That directory celebrates its first birthday in February, and is up to 539 entries.)

So tell us what you’d like to see for the Book Trade Directory in 2010. We at Highspot are looking forward to another year of connections!