So to kinda piggyback on what the question is to our published writers, and what the answers have been…
Was it worth it?
I mean that mostly mentally/philosophically…Even though you didn’t make money, is it nice knowing that someone somewhere bought your book? And that you’ve actually been published?
Yes, it was worth it. It was what I always wanted to do, and I did it.
Definitely worth it. It great to know that people want to pay you for your work, and that people are willing to read it. It’s something I dreamed of doing since I was a kid, and I’m delighted that I could have some small success doing it.
Hell, I’ve been writing some half-assed amateur fics the last couple months, and random internet praise alone is enough to keep me doing it.
Of course it’s worth it.
I’m a writer. That is my identity. Me. Writer. There is no separation between the two. So of course it’s worth it.
No, it’s not worth it. In almost any other field, the same amount of effort pays off enormously better. It gratified my ego enormously at one time, but the financial pains are enormous. And I have not quit my day job, though it holds little or no interest for me other than as a source of money.
I was surprised to hear in an interview a couple of years ago that John Sandford, author of about a jillion Lucas Davenport Prey crime novels plus numerous other successful books, makes around $250,000 a year. I know that doesn’t really answer the OP but it does answer the title of the thread, at least when it comes to this established and successful author.
Another question for the professionals. Does it effect your royalties when booksellers sell your books at a discount? Do you get less from an Amazon sale that’s 30% off than you do from a retail sale at full price? What about sales through book clubs?
Someone can probably correct me if I’m wrong, but from what I know of book retail it doesn’t affect royalties. Each individual bookstore purchases its supply from a distributor, typically at 50% of the cover price. That money is what goes back to the publisher after the distributor takes its own cut. The publisher doles out the royalty, then keeps the rest. If the retailer opts to discount its copies after purchasing them from the distributor, that’s entirely up to the retailer, and the discount is going to come entirely out of its share without affecting the rest of the chain.
I don’t honestly know about books sold at a discount. In some cases sales to book clubs are lump sums, although one of my foreign sales to a book club (or that included a book club, I’m not really sure) got me the only actual royalty checks I’ve ever had. There was a lump sum involved too, but it wasn’t much.
A normal book contract is many pages long because it has clauses for every conceivable contingency. These clauses are more or less standard throughout the industry, but the exact numbers can be negotiated - well, everything can be negotiated and is by an author with sufficient power.
Generally, royalties are calculated off the list price of the book. As Bosstone says, booksellers buy them wholesale. The standard discount is 40% but the really big players - WalMart, Costco, Amazon - usually get that down to 50% and I’ve heard of 55%. It doesn’t matter what they sell them for after that. Amazon paid $8.00 for Lady Gaga’s new album and sold it for $0.99. She got her cut out of the $8.00 and Amazon wrote off the losses to promotion.
Everything after that either comes at a standard discount - book clubs are calculated at 50% of list price - or as percentages of subrights sales - as when a foreign language edition is sold for x amount of money. Movie sales, audio books sales, electronic sales, all sorts of things. Braille and similar rights are free by convention.
All books are returnable by the bookseller. Those are charged against royalties (what’s known as a reserve clause). I’ve had a book out since 1992 and returns are still dribbling in. My royalty statements have turned negative, but nobody will ask me for the $1.23 back.
Remainders are a separate process. They are sold in bulk for about a dollar each to jobbers who them resell them. Authors see not a penny.
Almost everything in publishing is the legacy of what the industry used to be like in the Depression when the system was set up. You don’t have to tell us it makes no sense.
To clarify, the author gets paid a percentage of the cover price as set by the publisher (it’s printed on the book). If the publisher discounts it to the bookstore, the author gets just as much money. Same if the bookstore discounts it.
Royalties are calculated at <cover price> X <author’s royalty rate> X (<number of units in bookstores> - (<returns> + <reserve>)). Publishers don’t really know how many copies of a book sells; they just know how many they shipped and how many came back. The reserve is a rough estimate as to how many will come back in the future. The reserve drops over time as the book goes out of print.
I realized a line of mine might not be read properly.
When I say my royalties have turned negative, that means that during any particular six-month reporting period I may sell 2 books but have 3 returned. That shows as a negative dollar amount.
It doesn’t mean that total returns exceeded total sales. That happens a lot, though. There are paperbacks who see 70% or 80% of the print run returned. That’s why publishers hold back royalties as a reserve, so that authors aren’t put into the position of having to return thousands of dollars.
My royalties total handily exceeded my advance, thanks mostly to a number of foreign language sales. I was a millionaire in Polish zlotys. That’s sounded great until I learned that the conversion rate at the time was 11,000 zlotys to the dollar. But, hey, seven digits are seven digits for bragging rights.
Are you sure about that? And is it standard? Between Amazon’s “daily deals” priced at less than $4.00, and the large numbers of MP3 albums they sell for $5.00 or $7.99 each, I can’t imagine all of these things being loss leaders for them.
We’ve covered this in other threads. Amazon did it as a promotion for their new cloud system. They sold over 400,000 albums at $0.99, which is how the album sold over a million in the first week. That generated a billion headlines, and any search of Google News will find a multitude of articles on this.
It’s absolutely not standard, and probably was a stupid idea. Sales of the album plummeted the second week and sales of singles from the album have been weak because they had all been cannibalized by selling the album at the price of a single. And every other store is furious at Amazon. I doubt you will see anybody doing this again.
But it’s not at all different in concept from the price war between them and WalMart a couple of years ago, when they used a couple of hardback bestsellers as loss leaders at $9.99 and $9.98. They can afford to lose a few million to entice customers in, hoping they’ll spend more elsewhere in the store.
And if the author discounts their royalty percentage to the publisher, well. That’s their fault. 
Isn’t there some 5,000 year old clay tablet from ancient Babylon that decries the degenerate days the unknown author lives in, lamenting that “children no longer obey their parents, and every man wants to write a book”? (On the other hand… He wrote that! And it’s still being read and talked about!)