The most common question I get after 'How do you find the time?' and 'Why do you write?' is 'How much do you make?'. Some people think it's rude to ask about money, whatever, if you have any specific questions, go ahead and ask. Let's face it, all of us write for the money, at least in part. So, here's a breakdown of how it comes to you.
ADVANCE-- A pre-payment of expected royalties. Obviously, this is great--you get paid when the publisher accepts your book, sweet! It's also a sign of the publishers expectations, they expect to make MUCH more than whatever your advance is which means the pressure's on. If your book doesn't sell enough for you to have earned your advance, you'll be expected to pay it back and you will likely never publish with that publisher again. In the LDS market, advances are rare.
ROYALTIES--This is the standard payment method. It is a percentage of the book price but will vary from one publisher to another. Typically, a traditional publisher will pay 12%, 10% or 8% and it will either be retail or wholesale. All of these factors make a big different. For example if your contract outlines that you receive 10% wholesale and your book's wholesale price is $10 (wholesale equals about 60% of the retail price) then you make $1 a book. It doesn't seem THAT different than if you made 12%, but if you sell 1000 books, the difference is $200 in royalties. If instead you made 8% of retail $16.66 (note to self, do math before you write blog) that's $1.33 per book and $330 dollars more if you sold 1000 books. Keep in mind that the royalty will change in regards to any promotional prices of the books. For instance some publishers have a lower royalty on books sold in the first ninety days, other's will sell at a discount to some buyers and if you make 10% on wholesale, and the wholesale price to a specific buyer is only $6 instead of $10, you'll make 60 cents instead of your dollar. I once showed on my statement that my publisher had sold 200 copies of one of my older books for about $2 each. Since I was paid 10% on wholesale I made about $12.
PAYMENT SCHEDULE--If you receive royalty payments the schedule will vary from one publisher to another. Some pay monthly, some pay quarterly, bi-annually, annually or even every two years for some books. My first five books were published by a publisher that pays every month, but six months in arrears, so I get paid in May for books sold in October and multiple titles are paid in one check. If any of my titles are returned in that same month, it's subtracted out of my royalty. If my royalties are not more than $50, I don't get a check that month and won't get one until the months add up to more than $50.
My two most recent books are paid twice a year based on sales for the first half of the year and the second half of the year. If my book comes out in May (which both have) sometime in August I get paid for the sales between release and June 30, then come February, I get paid for sales between July 1 and December 31.
For me, I get smaller checks every month, and larger checks twice a year--in time to pay off Christmas and summer vacation. However, it was only a year ago that I was breaking even with my editing, paper, ink, conferences, promotion, and postage expenses. For the first six years of my career I had a hobby that paid for itself, and maybe a pair of shoes now and then.
When you get your contract, be sure to study the terms of royalties so you know what to expect. I know several authors read this blog, if you have anything to add/correct please leave it in the comment trail
Have a lovely