How Writers Earn Money #1: Advances

Welcome to the first post in my new series How Writers Earn Money, an area shrouded in mystery! I’ll be sharing my own stories and those of other writers about how they manage to pay the bills while writing, beginning with advances.  

An advance is a lump sum paid by your publisher upon signing a book contract, based on predictions made by your publisher about how many copies of your book will be sold. It is an advance on future royalties, not a payment in addition to royalties. ‘Earning out’ your advance refers to receiving enough in royalties that the publisher breaks even on the advance they paid you.

Once upon a time, advances functioned as a living wage while the author wrote the book. Nowadays, in Australia, most authors would struggle to live on their advances for more than a few weeks, though this seems to be a little-known fact, as the media tends to report only on the outliers, those very rare books which receive 6 figure advances like Graeme Simsion’s The Rosie Project, or Hannah Kent’s Burial Rites. While a handful of top names might get 5 figure advances each year, the majority of Australian writers, especially those writing literary fiction and/or published by independent publishers, are lucky to get advances of $5000. And it is not at all uncommon for debut authors with small presses to receive no advance whatsoever.

My Advances

  • $1000* for my debut novel with a small independent publisher; $500 paid upon signing the contract, $500 paid upon publication
  • $500 for my 2nd novel with a different small independent publisher; also in 2 installments
  • $5,000 for the US edition of my 2nd novel, with a small, independent publisher in the US

*All figures throughout this article relate to Australian advances for hard copy & e-books, unless stated otherwise. Subsidiary (eg film/audio) rights will be covered in a later post.

Other Writers’ Advances

Damon Young, who writes philosophy and children’s picture books has received 4 advances in the last year:
  • A total of  $16,000 for overseas non-fiction in Europe and Asia
  • A total of $4,400 for local fiction
 
An informal survey of 30 self-selecting female writers, who have signed book contracts in the last 5 years, yielded the following data:

 I invited a number of writers of different genres and career stages to share the details of their advances. The figures below are not ‘benchmarks’ but are intended to show just how big the range can be when it comes to advances.   

Literary Fiction

Case study 1: Novel – Big-Six Publisher

$200,000 advance for a three-book-deal – world rights (divided into $60K/$60K/$80K)
‘My manuscript went to auction and I had multiple offers from $5k – $200k. There was (and still is!) definitely pressure from a larger advance, but it has been an incredible opportunity and I felt like the publisher put a huge amount of faith into a little-known writer. Some people turn down multiple book deals, but it felt like the right choice for me. There is a lot of guilt, too, with a bigger advance – being aware of all the incredibly high quality works out there that have received far smaller or no advances and knowing that yours is no more deserving.’
 

Case Study 2: Short Story Collections & Novel – Small, Independent Publisher

$1,000 each for 3 collections with the same small, independent publisher.
‘Given the difficulty of selling short story collections, I was happy with the amount I was advanced for my first two collections. However, because both collections were shortlisted for major literary awards, I had (naively) expected an increase for my third collection. But I wasn’t offered one, and I didn’t ask for one, because I still had the attitude that I should be grateful to be published at all. I’m also aware that my books are not bestsellers.’

$500 advance for 1st novel with a small independent publisher
‘While this is my fourth publication, it’s my first novel, and with a different publisher. Having been advanced $1,000 dollars for my short story collections, I assumed this was a standard amount for relatively unknown writers of literary fiction. I was initially a little taken aback to be offered only $500, but again I took the line that I should be grateful that a publisher wanted my book.’

Case Study 3: Novel-in-Stories 

No advance for debut contract with small, independent publisher 

‘While I didn’t get an advance, I got to choose my own freelance editor and cover designer upon acceptance, and was also given an in-house copy edit. These things meant the world to me. In addition, my publisher gave me confidence after a rough time with an initial publisher and agent both keen to profit from the book as an idea, but not so keen to support my vision as I saw it.’

Case Study 4: Literary/Speculative Fiction

No advance for debut novel contract with a small independent publisher

No advance for 2nd novel with same publisher, despite the first novel winning an award

YA/Children’s Fiction

Case Study 1: Children’s

$15,000 advance (split 50/50 w illustrator) for each book of a trilogy with an established independent publisher.

‘They were the illustrator’s first books, and I was an established adult and YA writer, but hadn’t written for this age group. The advance covered English-language rights for ANZ, print and digital. We held back other languages, audio and all adaptation rights. We’ve subsequently signed a TV series option. So far, the first two have earned out their advance.’

$10,000 advance for a 12-15,000-word book commissioned as part of a series by a big-six publisher.

‘The book moved away from the series and ended up a standalone publication, 25,000 words long.’ 

 Case study 2: YA

$12,000 advance for each book of a 2-book contract (world rights) with a big-six publisher.
NB: This was the author’s fourth novel to be contracted by the publisher, but their first for the YA market.

Commercial Fiction

Case Study 1: Psychological Suspense

$22,500 for 3rd book with a big-six publisher

$12,500 for each book of a 2-book contract with a different big-six publisher

‘I think it’s much better to have less advance and earn it out.  The offers change when sales dip – and those sales figures might be little to do with the quality of your novel. For example, between my second and third book all the Borders and Angus & Robertson stores closed. Earning more is great, but also scary if those earnings are for unwritten manuscripts, as you’ve got to hope you’ll pull it together or you’ll be paying the whole lot back!’

Case Study 2: Crime

$5,000 advance for 1st book with a small, independent publisher

$2,500 advance for each book of a subsequent 2 book contract with same publisher 

‘I have competing feelings about large advances. On the one hand, a large advance means the publisher will put money into marketing your book, on the other hand, I would worry about my ability to earn a large advance out. The marketing aspect probably applies more to the big publishers than independent ones. My publishers have pushed my books as hard as they could. In fact, they’ve done better than I expected.’

Case Study 3: Historical Romance

$15,000 advance for each book of a 2-book contract for 1st contract with a big-six publisher

$20,000 advance for each book of a 2-book for 2nd contract

‘I like to agree to an advance that I know I can earn out rather than one that terrifies me – I know I earned at least $20k for the last 2 books with them so it should be achievable for the next 2 books. I’m happy with those advances and my publisher’s commitment to me’

 

Non-Fiction

Case Study 1

$1000 advance for 1st book with a small independent publisher, split between 2 co-authors

Case Study 2

$5000 advance for 1st book with a small independent publisher 

 

 

The Fine Print

  • You do not have to pay back any portion of an advance you have not ‘earned out’ on a published book
  • In a multi-book deal, if you fail to deliver a manuscript that satisfies the publisher (e.g. it does not adhere to the expected genre), you can be asked to pay back the advance. 
  • Even if you earn out your advance, if the publisher has invested heavily in marketing in anticipation of selling even more copies, your book’s ‘bottom line’ (profit & loss) may be low or even negative, which may impact on future advances and contracts.

I hope this information was useful. Would love to hear from other writers about their own advances and whether they are different from/similar to those listed above. Also, please let me know if you have any questions about advances or any other aspect of how writers earn money, 

You Might Also Like

On (Not) Making a Living from Writing

What to Expect When You’re Expecting a Book

 

 

 
 
 
  

27 thoughts on “How Writers Earn Money #1: Advances

  1. This is brilliant, Annabel. It certainly puts my mind at ease about mine. Not too big, not too small, just right. In regards to your ‘Con’ for a large advance meaning more tax has to be paid — I am set-up as a ‘creative business’ for tax purposes, and my writing income is averaged over the past 5 financial years, on a rolling basis. I think the ATO recognises we get a spike of income every few/five years.

    1. I’ve never heard of this before, Kali. Did you set this up direct with the ATO, or through your accountant? Some years I earn so much more than others and it’s frustrating not being able to even it all out.

      1. My accountant set this up for me so it’s definitely possible. Works if you have big spikes / dips in income. Mine levelled out because I kept writing books and because some advances were paid in several stages over a year or three – so I reverted to the conventional system.

          1. This was a fewyears ago and I’m not an accountant (readers should seek their own advice etc etc) but I recall that the problem with taking the averaging option was that you could get end up paying less than the usual amount of tax in early years, but be left with substantial tax payments in later years as your income wound down. Which could be ugly if you hadn’t made provision…

            1. Of course, that makes perfect sense. How demoralising to think that not only is your income dwindling but at the same time you are hit with a big tax bill 🙁

  2. Thank you for your openness and honesty Annabel! I think all writers would agree though, they don’t do it for the money, but because they are compelled to tell a story.

    1. Absolutely. I always say this to aspiring writers: if you’re in this for fame and fortune, quit now! If you’re in it for love, it’s worth it.

  3. Another helpful article. Thanks for the mention of The Rosie Project – I’d just add that my initial (Australian) advance was WAY less – it was only when it attracted overseas interest & each overseas publisher was a separate deal – all the way from 4 figures to those headline 6 figures. GRAEME

      1. I had several Aust offers but none over 15k and I didn’t take the biggest. International offers ranged from $500 (Small country) to 7 figs on 2-Book deals (USA). BUT (1) payments for big deals are seldom all up front – could be divided into signing, manuscript delivery, hardback publication, paperback publication. And they DO reserve the right to pull out if they haven’t seen the manuscript which means they’re getting a free option, it doesn’t make commercial sense for the author IMO…

  4. Thank you, Annabel, for another informative and helpful article. There’s a huge variation in advances, isn’t there, depending on the kind of books you’re writing, and on who publishes your work. I’d also be interested to hear about writers’ experiences with the promotion of their work.

  5. So interesting, reassuring and useful, Annabel, especially with regard to second book deals. I guess it shows prizes are nice but unless they’re big ones they don’t equate to more profit for publishers or more willingness to take risks on second titles. Thanks for the time in collating and sharing this. There is another pro to getting a small advance and then outselling it … those first royalty payments are a surprise and a little confidence boost when you’ve already forgotten about the last book and are lost in the jungle of the next. Wish I’d had this article to read when signing my first contract.

    1. Yes, it is very interesting about second book deals. I naively assumed my advances would get bigger! And as you say, it is nice to get a little unexpected deposit in your account later on. Thanks for commenting and sharing.

  6. Thanks for this very interesting and eye-opening post, Annabel. Reading this makes it all seem a little pointless expecting to make a living from writing books.

    1. Yes. It’s taken me a long time to admit to myself that I’ll almost certainly never make a living from it. But in some ways it’s great to get to this point – less disappointment!

    2. I’m all over this thread now, so might as well buy in here as well. I’d say that if your goal is to write what you want to write AND make money, you’ll need a lot of luck. It depends not only on your competence, but on what the market wants at a particular time. But plenty of people make a living out of writing what others want written (journalism, adaptation, certain genre writing, ghost writing…) even though it might not be their first choice of topic / style. It’s at least writing, hones your skill, and may leave enough time to write the uncommissioned stuff that will one day take its place in winning the bread.
      Good luck…

      1. Go for it, Graeme, it’s great to have your input. I’m going to be covering some of those ways of making money in later editions of the series; it will be interesting to hear what people say about them.

  7. Great post Annabel. I have always admired your determination to bring these kinds of discussions into the light. There is not enough transparency in our industry in regards to money – unpublished writers have unrealistic expectations in regards to the return they can expect for their 2 years, 5 years or 10 years work. I guess an article about 90% of writers making no more than pin money from their writing is not very sexy. My advance for Letters to the End of Love was $6,000 – as I gave my publisher the right (for two years) to exploit my overseas rights. Nothing came of that – my novel did not sell to an overseas publisher – but at least I received quite a good advance by Australian standards. As a bookseller I was well aware that most factors are against the writer – the speed of the publishing cycle, the preference for overseas novels over Australian novels, the difficulty in any Australian novel being picked up overseas. As Graeme says, the factors that make a bestseller are largely invisible and out of the writer’s hands. I’ve always favoured the gambling analogy – we’re all horses from the same stable, we’re all given a run – one in ten thousand wins the big race. The others make enough to keep them in oats (perhaps some hay). So the writing itself has to be the main reason to continue. Most of us make our daily bread elsewhere.

    1. Thanks so much for sharing your thoughts and your own advance Yvette. You’re so right about unrealistic expectations – I truly thought I had a chance of making my fortune from writing. And it’s so heartbreaking if those are your expectations – you’re setting yourself up to feel like a failure. whereas if you know what is an industry norm, you can benchmark yourself accordingly. As you say, most of us do it for the love of writing.

  8. I’d like to add, as someone who works as a professional writer and writes fiction in my own time, is that making my living that way doesn’t pay too well, either. Obviously it’s a steady income, and more generous than that provided by writing fiction, but it’s certainly not a way to get rich! I’ve had to mix it up with other things like public relations and corporate communications, which I’m not temperamentally suited to, and which I’m rather hopeless at! I think if I had my time again, I’d get a run of the mill job and throw myself into fiction in my spare time. In my youth I was determined to make my living as a writer. And I guess to an extent I’ve succeeded. But not comfortably.

    1. Do you think your professional writing has contributed to honing your skills for creative writing? I think it has definitely had that effect for me, and has helped with other aspects of creative writing, like writing grant applications and those kind of things.

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