Economics

One of the most frequent questions I get from readers is:  How much money do authors receive on the sale of their books?  The answer can get complex depending on the edition, the discount, the number of copies sold, etc., but I saw the following breakdown as provided by a literary agent the other day and thought you'd enjoy getting a look at how publishing economics work:

Start with a $24.95 hardcover.

Discounts to booksellers vary, but for a rough estimate figure that the publisher receives around 50%.

Let's say the author has a 10% retail royalty, and the author has an agent who receives 15% of the author's share. This works out to (again, roughly):

$12.48 to the bookseller (50%)
$9.98 to the publisher (50% minus author/agent share)
$2.12 to the author (10% of retail minus 15%)
$0.38 to the agent (15% of 10%)

For another example, let's take a $14.95 trade paperback where the author receives 7.5% retail. That translates to:

$7.48 to the bookseller
$5.83 to the publisher
$0.95 to the author
$0.17 to the agent

Obviously, it's less for mass market paperbacks (where the retail price is normally around $7.99 -- you can do the math) and for e-books (where, depending on the retail price, the royalty is about a third of what the author would receive on a hardcover sale). 

We're only talking about new books here, of course.  Sales at used book stores make money only for the bookseller -- the publisher, author, and agent receive no compensation.  Most libraries buy their books, but a single sale at a library is a single sale, regardless of how many patrons read it.