How do book advances work? I’m about to reveal all!

The first thing to know is that there are essentially five levels of outcomes with book sales: 0, 10k, 25k, 50k, and over 100k.

Zero (or 2k or 4k) means you didn’t find your audience. Ten thousand means you found your tribe.

Twenty-five thousand means the bottom of the bestseller list and an audience bigger than the niche you aimed for. Fifty thousand might hit #1 or #2, and everyone is talking about it. Over 100,000 units means that people who only bought one book this bought your book.

If you make about $4 per hardcover/ebook, that means there are five level of advances, right? $0, $40k, $100k, $200k, and $400k? Not exactly. Only about 5% of books earn out, so we build that overspending into the P&L. So it’s more like $25k, $75k, $150k, $300k, and over $500k.

Not to mention that if you can get an auction going, someone is going to think you’re headed for the sales tier higher than anyone else, and you get an advance higher than your likely level. Either way, don’t plan on seeing any money beyond the advance.

So why would five law professors sell books for $50k and then the sixth one sells her memoir about cancer for $250k? Because the first look likely to max out a niche, and the last one looked to some editor like books that hit #1 sometimes.

And! The higher advance, the more we break it up. $500,000, after the agent’s cut, might end up as $85k a year for five years.