How Do Authors Get Paid?

There’s a bit of a discussion floating around the internet lately as to whether authors get paid when books are bought through charity shops, second-hand book shops etc…and how readers feel about that.

The short answer to that question is: No, we don’t get paid when readers buy second hand books. 

So how do I feel about it? Hmm… that’s a complicated answer.

As an author: I cringe. The work an author puts into their novel isn’t rewarded when people buy books this way.

As a reader: These places are a great place to find new authors. But when I buy a book through a second-hand bookshop or a charity shop – and I do – I always post a review on Goodreads and/or Amazon afterwards. I do this because any review, good or bad, helps the author gain traction through the sales channels they use. As the old adage goes, ‘Any publicity is better than nothing at all.’

We want to support the charity selling the book, but we want to keep food on our own table too.

So how do authors get paid?

Royalities – Traditionally Published

For those who publish through the larger publishers like Simon and Schuster, Little, Brown and Co., Harper Collins, etc, it is a long and arduous process. Authors have to first submit their manuscripts through a literary agent, who then pitches the manuscript to publishers.

When a publisher accepts the contract, which may take months or even years, the contract may or may not include an advance. The publisher determines how many copies will be printed based on how many copies they believe will sell. New authors may not receive an advance at all and, if they do, it may only be a few hundred dollars. Famous authors, such as Nora Roberts and Kristen Hannah, may receive five, six, sometimes seven figure advances. An advance is not free money, but rather money that is earned. The author does not receive any additional royalties until the amount of the advance is reached.

With the traditional route, an author’s royalties will be anywhere from 5-10% of the recommended retail price of the book. And that royalty may depend on where the book is sold. Some contracts may stipulate lower royalties for discount markets (like Walmart or Big W) and a higher royalty for high-end bookshops (like Barnes and Noble or indie bookshops). The author may receive their royalty cheque once a quarter or it may be once a year, depending again on the contract terms.

The traditional publisher owns the rights of the book for the contracted period of time, which may be three to five years.

Royalities – Hybrid Published

It’s still a long process for Hybrid publishers, but the author pays the publisher money up front to publish their novel. Yes, you read that correctly.  The AUTHOR pays the PUBLISHER to publish their book. The publisher owns the rights of the book for anywhere between one to five years, and the author doesn’t get paid until after a six-month holding period when the book is published. Royalty payments from there vary. They may arrive quarterly. They may be annually. It’s all dependent on the hybrid publisher.

Do you see the red flags with the Hybrid model? I do. My advice? Run. Run away as fast as you can from a Hybrid publisher.  An author should never pay what can be thousands of dollars to have their book published.

If you’re tempted to go the Hybrid route because it’s ‘easier’ and find yourself too nervous to take a different route, I urge you to do more research. I’ve heard of authors paying thousands of dollars to a hybrid publisher only to find themselves ghosted, wondering where it all went so wrong If self-publishing is attractive to you, there is information everywhere on self-publishing and it’s really not as daunting as it seems.

Which brings me to…

Royalities – Self-Published

This is my area of expertise.

Self-published authors do not get advances. They manage all parts of the publishing process themselves which is one of the main reasons authors like to self-publish. They keep control of their book, as well as the rights. Self-published authors receive royalties on a monthly basis, with a delay of about three months on the sale. eBooks bring in more royalties than print books, so you may find a lot of self-published authors only offer that format. (Did you know you can buy my books, directly from my website?)

Most self-published authors will publish on Amazon via Amazon Kindle Direct Publishing (KDP) at a minimum. It’s by far the most accessible for most writers. But if authors want to sell their books in bookshops, they need to go through a distributor like IngramSpark. There are are other distributors, depending on locale, but IngramSpark is the largest distributor in the world, and the one most bookshops purchase through.

Yes, the royalties are higher than Hybrid and Traditional publishers, as there is no middleman, but this is where I burst the bubble. The amount self-published authors receive is not significantly more, especially since printing and distribution costs have dramatically increased over the last few years. As much as we would love to increase the price of our books to cover these increased costs, that puts us out of market range. The printing and distribution costs make up the majority of the fixed expenses we incur, but there are other costs to factor in: editing, proofreading, cover design, copywriting, typesetting, marketing, advertising, and publicity. You don’t want to know what I make on an hourly basis right now.

Other ways authors make money

Because we can’t rely solely on book sales as our only means of income, authors have to get creative in other ways. 

Public Lending Rights
Who doesn’t love the library?! I’d be lost without mine.

Libraries buy the copies of books to put on their shelves. They do not get these for free.  The books are purchased either from local bookshops, or through distributors.
Authors can get paid when you borrow a novel from the library IF the author signed up to receive this payment (it’s not automatic). These payments are paid to the author and publisher annually.

There are two very important points to be made here – and this is where you can help.

1. Authors and publishers do not get paid for eBooks or audiobooks, only print books.
2. Authors (and publishers) are only paid if they have a certain number of books in the library system, and if their book was borrowed a sufficient number of times. That means, if the book you want is not showing in your local library, request they order it in. 

Special Events

Some authors can make money through special events, like writer’s festivals or library tours. This isn’t common, but the more popular authors do get paid appearance fees. The Australian Society of Authors recommend authors get paid over $300 for interviews, over $200 for a panel discussion and almost a $1000 for workshops, but I have not met an author yet in the self-publishing world given this type of respect.

Writing Classes/Workshops

Some authors may create writing classes or host workshops on their own and publicise these in their local communities. There is significant time and effort that go into these, and they aren’t profitable timewise, but if it helps to pay the bills, we will happily share our knowledge. I’ve known a few authors who do this to supplement their income.

Freelance Writing/Selling Short Stories

Many writers work freelance. They may write for magazines, websites etc. Others sell short stories and sell them as part of anthologies or direct from their website.

Affiliate Sales

The dreaded commission. I have these on my blog because it’s a way to earn a passive income.  Any time someone signs up for a writing/publishing/marketing tool like Scrivener, Vellum or StoryOrigin via my website, I get a small commission. But for all of these, we’re talking pennies. Certainly not enough to buy a cup of coffee.  Which brings me to… 

Patreon, Buy Me A Coffee etc…
Services like these give readers a simple way to support their favourite authors to keep them writing.

Some authors offer Patreon to their readers and deliver behind the scenes insight into their writing in exchange for sponsorship.

You’ll see ‘Buy Me A Coffee’ on my webpage as a way for readers to ‘tip the author’ as my blog posts share (hopefully useful) information without making any income from them.

A reality check about how much author’s make.

Last financial year, I sold about 1100 books. I’m hoping to double that number this financial year. But if you break that figure down, factoring in I work six days a week, seven hours a day, I make less minimum wage – AND that doesn’t account for expenses.

A 2015 survey* of Australian authors conducted by Macquarie University revealed that the average Aussie author earns less than $13,000 per year from their writing. I wish!  But the fact is, most authors earn less than the minimum wage. *A new survey was conducted in early 2022, results are pending.

I can hear that question screaming in your head: So why do publish books at all?

Here’s the easy answer: Because we LOVE what we do.

How you can help an author:

• I am fully aware that buying new books is a privilege, especially considering books in Australia can retail for $30 or more for a paperback. Joining your local library is a great way to save money and discover new authors.
• Consider borrowing from your library instead of buying from a second-hand shop.
  If there’s a book at the second hand/charity shop that you love, one you can’t resist, take the time to write a review of the book afterwards. You can share your thoughts on Amazon or on Goodreads. Goodreads is the largest free website for readers, and you can find some amazing recommendations there. Reviews do not have to be long. Two sentences work just as well as two paragraphs.
• Share the book on social media.
• Tell a friend or suggest it for a book club.
• Buy new books from new authors and borrow the blockbusters.
• Sign up for your favourite author’s newsletter. You may receive some special promos, gain information on a new release, or even learn a fun new fact. By having a strong following, this allows the author to gain more credibility with bookstores, as well as with podcasters and magazines etc for interviews.
• Pre-order books. Authors do not get paid more for pre-orders. They are set up only to create interest. If the author sells a high number of books before the day of release, that may bump the book up into the best-selling category, which garners more interest.
• The more books are seen online (and become popular), the more likely bookshops will order more books. That’s why authors love readers who share the books they read on-line and social media influencers. #Bookstagram is a serious business and if a popular ‘bookstagrammer’ touts our book, that helps increase book sales.

Here are some other ideas:  31 Ways to Support Authors in a Month