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Originally Posted by Andrew H.
Sorry, no. Even cursory research will show you that 70-80% of books don't earn back their advance. This is well understood and has been the case for many years.
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Books that don't make back their advance are still usually profitable for the publishers.
The Myth of the Unearned Advance goes into details.
Quote:
Assumptions:
Advance paid to author: $10,000
Retail price: $13.00 (paperback)
Net price: $6.50 (this is what the publisher receives when they sell the book – to dealers, big box retailers, distributors, etc. )
Copies sold: 10,000
Scenario one: Author earns 14% of net for each book sold. ($6.50 net x 14% royalty x 10,000 sold)
Thus, after selling 10,000 copies the author has earned $9,100.
Leaving $900 of the advance unearned.
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Fixed costs
Editorial expense: $8,000 (includes all stages of the editorial process)
Design (typesetting/cover): $4,000
Printing and warehousing: $15,000 (the approximate cost of printing 12,000 copies)
Marketing and PR: $10,000 (an average of $1 per book)
Administrative costs: $13,000 (20% of the net revenue)
Advance paid to author: $10,000
TOTAL COSTS: $60,000
Profit for the Publisher: $5,000 (or 7.7% of revenue before tax)
or the $65,000 in revenue minus the $60,000 of total costs.
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Scenario one – (with the unearned advance still on the books) has a profit of $5,000 for the publisher.
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With those numbers, my quick calculations say the publisher loses money if they sell less than ~5400 copies. Of course, the publisher wants profit, not just expense-covering, or it's not worth printing... but they're not *losing* money, even if the author doesn't get anywhere near the advance, as long as they hit their cover-expenses level, which is substantially lower than when the advance starts to pay out.