Understanding Advances

Ah, advances. The word conjures images of signing bonuses and the keys to new boats, cars, and houses.

Ahem.

Back in reality, such things don't happen. Oh, sure, we hear about some Christian authors getting six, seven, and even eight-figure advances. But most of us will be lucky to hit five-figure advances.

For a first-time author publishing with a medium-to-large-sized Christian publishing company, you're looking at something in the $7,50012,000 range for an advance.

It's important to understand, too, that an advance is really a loan against future earnings. So if you get an $8,000 advance, when your book comes out you won't see any royalty checks until the publisher has made back that $8,000 from the cut of the royalties that would've come to you.

Once (or, I should say, if) they make that money back, you'll start getting a periodic royalty check.

But don't go buy the chalet just yet. After all eight of my books have been out several years now, I can tell you that I've not received more than $2,000 royalty. That's total. For all the books combined.

In fact, only one of those books even broke even. That's why I said "if" above. This means that 7 of those 8 undersold expectations.

See, publishers make lots of gambles when they decide to do a book. (Most people don't realize that publishing is essentially gambling and speculative investing, but that's a discussion for another day.) One of those gambles is that they'll make back in book sales whatever amount they give the author in advances. If they think they're not going to sell many copies of your book, they'll offer a lower advance.

Agents and authors sometimes press the publishing company to give a much bigger advance than the company is wanting. The thinking here is that if the publishing company is putting up that much money, they'll be doubly motivated to go out there and sell it that much harder. Whereas with a lower advance, the thinking goes, the publisher won't be very inclined to sell it that hard.

I don't know what's true on that. I do know that most books do not make back their advances, high or low.

I hope you're hearing me now. Most books do not sell enough units to break even. Most publishing companies, at least in the Christian industry, are operating at a loss about 92% of the time. It's those few blockbusters that float everything else.

Advances are almost always paid in two or three portions. The first portion you'll probably get upon signing of the contract. The next one (or ones) will come at some trigger point, like when you turn in the rough draft or when you turn in the completed draft (at the end of the editorial process) or when the book is released.

One more thing about advances: don't worry if your book doesn't make back its advance. As I've said, it's a common situation. They won't make you pay it back. Publishers see it (rightfully) as a poor estimate they made. They guessed too high and weren't able to create the sales energy they needed to sell enough units to break even. No biggie.

Hope that sheds some light on the subject of advances.