How Much Money Does An Author Make?

How much money does an author make?
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How much can an author make? That question comes up a lot and the answer varies greatly — like, from about $0 (or even losing money) to millions of dollars. But understanding a bit about how authors are paid can help with gaining some insight into what the book bottom line can be.

The author's investment in his or her own book

Authors spend many long hours researching, developing, writing, and re-writing their books — and there is a cost associated with time.  Some books require an actual monetary investment by the author — for example, in travel for research or, in the case of cookbook authors, money spent on ingredients for recipe testing and the cost of photographing food.

The type of book the author writes affects the income potential. Novel or non-fiction? Current (and easily dated) or evergreen (and a perennial backlist selection). A fictional character whose adventures run to many books or a non-fiction topic that "backlists" increases the income potential for an author.

Advances and royalties for "traditionally published" authors

Authors who make a deal with one of the Big Five book publishing houses or some of the larger independent publishing houses are generally paid a percentage royalty for each book sold and are given an advance against those royalties upfront, before publication date. This is negotiated by the agent and/or author and then made a contractual obligation.

The amount of the advance is dependent on a number of factors including but not limited to: the author's publishing and sales track records, how "hot" the topic of the book is, a general feeling on the part of the editor / publisher and others involved in the process of how special and appealing and salable the book is when taken in its entirety (ex. writing, story, flow, etc), and very importantly, the author's platform/s.

For example, Lena Dunham is the creator/writer/star of the hit HBO show, Girls (television platform) with a Twitter (social media platform) following numbering nearly two million.  She was reported to have received a $3.5 million or so advance for her memoir-ish book, likely because:

  • Dunham had a track record as a proven writer (TV not books, but...)
  • The show and Dunham herself were lightning rods for all sorts of publicity.
  • There were millions of dedicated Girls watchers and Twitter followers were probably fascinated enough by Dunham to buy her highly personal musings.

And, given the book's longevity on the bestseller list, the publisher's investment paid off.

How much money do self-published authors make?

It's fair to say that most self-published authors do not break even with their publishing costs — this is based on the fact that the average self-published author sells less than 200 copies and likely laid out at least some cash to publish in the first place — for example, in freelance editorial services.

That said, a self-published author who produces a high-quality book knows the market for the book and how to reach that market, and puts the required resources into doing so has a good chance of seeing some returns on their author investment.  

In some cases, self-published authors whose books get sales traction can parlay that (if he/she wants) into a book deal with a traditional book publisher.

Amanda Hocking is a paranormal romance author who made millions of dollars selling her self-published e-books and then went on to get a multi-million dollar book deal from St. Martin's Press.

Donna "Faz" Fasano wrote for traditional publishers and then became an indie author. As an indie author, she was a shrewd marketer, made a good living and eventually returned to being traditionally published. In her Q&A, she was very forthcoming about the financial aspects of self publishing.