Quote:
Originally Posted by DMcCunney
The CEO of Thomas Nelson had me chuckling bitterly not that long ago, wondering why no one was upset at all the authors ripping off publishers because their books didn't earn out their advances?
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Publishers can still make a profit on books that don't earn-out their advance.
Say: Advance of £5,000
Say RRP of £15, with 10% royalty
Print run of 5,000, costing £15,000
Final sales of 3,000, at 50% wholesale margin. The unsold 2,000 copies are remaindered at half printing cost - £3,000 or £1.50 each.
Author royalties: £4500, didn't quite earn-out.
Publisher income: £22,500 + £3,000 = £25,500
Publisher costs: £5,000 + £15,000 = £20,000
Publisher's profit: £5,500
(These figures are made up, but aren't far off what might actually happen.)