Oct 30 2008
My first actual book royalty payment!
I was very surprised this morning when I did one of my periodic checks of my bank account balance. There was more money in there than should have been the case. Like most people, most of the time the only money going into my checking account is from my paycheck. Those transactions aside, generally the flow is one way – out. The non-paycheck inflows are relatively rare and generally either intentional deposits or ones that are expect (tax refund, etc.). The one that hit today was rather unexpected.
It was a royalty payment for my book, The Essentials of Trading.
Now you might be wondering why I would be surprised to receive a royalty payment, but you see it’s the first one I’ve ever gotten. That’s right, two and a half years after it was published I have finally seen my first royalties (not that we’re talking big bucks here, mind you). Are you surprised to hear that?
Publishers generally pay authors an advance for their book. Being a new author in a genre that isn’t prone to generating blockbuster type of sales, my advance wasn’t anything dazzling (think 4 figures). Before the author starts receiving any payments the royalties first have to make back that advance. On top of that, the author gets charged for a number of things like indexing and review copies, which also have to be paid for out of the royalties before the author gets a penny.
The bottom line is that I’ve sold thousands of books and have now had the book published in German and Chinese (or at least the agreements put in place), and have only just now reached the point where my royalties have made back the advance and costs.
Ahhh, the glory and rewards of authorship! 
Here are some other posts which might interest you:
- Advice for a Fellow Trading Book Author
- I’m in big, big trouble!
- Book Review: Reward Systems by Steve Kerr
- Don’t use content without attribution
- Me And David Faber are Birds of an Authorial Feather
Hi John,
Looks like you were caught in that age-old publishing formula called the “Reserve for Returns”. A publisher can under almost any contract retain author earnings to cover future returns of the book. The catch is that the publisher almost always retains well in excess of what is actually needed, consequently, two and a half years later you start to see payments, small but better than nothing. Understanding the financial terms of the contract and what the reserve really means can help authors. Better would be to be able to check those reserves twice a year and be in a position to challenge them. That’s what we do.
Best,
Jerry
Jerry – Believe me, I watch all the details. The reserve is definitely on there, rising and falling with the level of sales. That was certainly part of the equation, but only a minor one in the grand scheme. It just took time to work off the advances and expenses charged against my account. Alas, my book hasn’t sold quite as well as Harry Potter.
Congratulations on your first royalty!