Quote:
Originally Posted by nekokami
Regarding books published through a publisher, the common procedure is for the author to be paid an "advance" or a flat amount toward the potential royalties a book might earn. I've heard the amount for fiction is US$3000-5000 per book. If the amount of royalties generated by book sales ever exceeds the amount of the advance, the author gets more payments, but this isn't especially common. However, book sales drive future contracts, so by buying an author's books we can at least make it more likely that the author will be contracted for another book.
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This is all true. Each book sale is worth a certain amount to the author. For the sake of argument, imagine that Mr. A, an author, has been paid an advance of $2000 by the publisher (not unusual for a first novel). In theory, for every book he sells, he gets $1. However, because he has already received $2000, he won't be given any more cash until his sales exceed 2,000 copies. This is called 'earning out the advance' or simply, 'earning out'. Many, many books never reach this point.
The good news, from Mr. A's point of view, is that even if he fails to 'earn out', he will not have to pay back the portion of his advance that he didn't earn. The publisher's accept that this is their risk.