Blogger: Rachelle Gardner
When an author gets a contract offer from a publisher, the first thing they want to know is, “How much?” And by that they mean, “What is the dollar amount of the advance they’re offering?”
The standard way to view advances is, the more the better. Right?
Well, maybe… maybe not.
A large advance is a good thing because it means that no matter how many copies your book sells, you’ll receive at least that much money (minus your agent commission).
If we’re taking the short view—the “take the money and run” view—then this is a good thing. If there’s a chance this might be your only book, then getting more up front is a great idea (from the author’s perspective).
If you’re taking the long view—the “I hope to make a career out of this” view—then whoa, doggie, not so fast. Let’s not focus exclusively on the biggest advance possible. Shoot for the best advance that you can reasonably expect to earn out.
If you earn out your advance and keep selling beyond that, then some great things can happen:
- You’re a star in the eyes of your publisher, and they’ll be more likely to offer you another contract.
- You’ll get checks in the mail—beyond the advance—that could turn into a nice little twice-annual revenue stream. At that point, trust me, you’ll be happy you didn’t take it all up front.
- Not to put too fine a point on things, but come tax time, you’re going to be happy as well. Paying taxes on a little income at a time (like with a smaller advance and then ongoing royalties) is easier than trying to pay taxes on a sudden large windfall.
On the other hand, if you get a large advance that will be harder to earn out, you risk some unpleasant consequences:
- You may be nervous throughout the publishing process because you feel intense pressure to sell enough copies to earn out your advance.
- If you don’t earn out, your publisher is reticent to contract you again. If they love you despite low sales numbers, they’ll contract you but probably with a lower advance.
- You won’t see any checks along with those twice-yearly royalty statements. Depressing!
- You end up paying taxes on a huge amount of money up front. Ouch.
To clarify, I’m not talking about asking for a smaller advance up front. I’m saying sometimes it’s necessary to accept an advance that’s smaller than you’d hoped, and when that happens, you can look at the upsides as I’ve outlined here.
Choosing to accept the advance the publisher offers (even if it’s smaller than you hoped) rather than trying to negotiate it higher, can also work in your favor because you may have a little more room to negotiate other points of the contract that are more important to you.
When I talk about advances, writers invariably ask me whether it’s a good idea to let a publisher know you’re willing to take a deal with no advance at all. While this can be one way to do things, especially if you’re having trouble getting a book deal and if you’re working with a smaller publisher, I don’t recommend it as a matter of course. It’s better when the publisher has made a financial commitment to your book up front (translating to more “skin in the game” as they say). And if you have an agent who has done a lot of work for you, they need to be paid, and the advance is the only payment they can count on.
A good agent will try to get you the best advance possible in your circumstances, balancing it with a reasonable expectation of what you can earn out, so that you can become a star and build a successful long-term career as a writer.
Any thoughts or questions on advances?
In publishing, shoot for the best advance you can reasonably expect to earn out. Click to Tweet.
Is a bigger advance always better? Click to Tweet.
Earning out your advance helps you look like a star in the eyes of your publisher. Click to Tweet.