If you’re a traditionally published author or hoping to be one someday, you’ve probably heard of “earning out.” What does earning out mean, anyway?
The “advance” your publisher pays you is an advance on your future royalties. Every time someone buys a copy of your book, you earn a percentage of the money from that sale in the form of royalties. When the amount you’ve earned in this way equals the advance your publisher paid you, you’ve earned out — and the royalties start being paid directly to you on a regular basis. Hopefully.
Sooner or later, every debut group starts talking about earning out. My debut group, 2024-Ever, was no exception. When the discussion came up one day, people in the group started doing math to figure out how many copies they’d need to sell to earn out. The server quickly filled up with shocked and crying-laughter emojis. The numbers seemed ludicrous, especially for the authors with advances in the six figures. A few people started quietly panicking over whether they’d ever hit the numbers they were seeing, and if they didn’t, how long it would take before publishing declared them a failure. Some people decided the math was beyond them entirely and they would just have to live without knowing “their number.”
When I created the “When Do I Earn Out?” calculator, it was with two goals in mind: to automate the math so I wouldn’t have to do it again, and to make it easy for my fellow authors who didn’t want to do math at all. But it quickly became more than that.
Creating the calculator helped solidify a truth I hadn’t really believed before: that you don’t have to earn out to be a sound investment for your publisher. As I later learned from a literary agent on Twitter, a general rule of thumb is that your publisher starts making a profit when you’ve earned out 50% of your advance. My tool makes it easy to see roughly when that happens; it even calculates a ballpark estimate of your publisher’s gross revenue (not profit) based on the number of sales you input to the calculator.
I whipped up the first version of the webpage in a couple of hours and sent a link to the 2024-Evers, hoping other people would find it useful, too. After I got a few positive responses, I posted it on Twitter. I had about a thousand followers at the time, most of them aspiring writers, and I thought a few people would bookmark it and have it come in handy down the line.
Within a few hours, the post had almost half a million views and Roxane Gay had retweeted it, calling it “the most useful app ever created for writers.” (Can I put that on the cover of my book? Or my gravestone?)
The work wasn’t over. I’d asked for feedback and was overwhelmed by the flurry of questions and suggestions that were pouring in. I was making fixes as people were pointing them out, adding new input boxes and deploying changes every few minutes. I’ve been an industry software engineer for five years, but I’ve never iterated on an application in real time with so many eyes watching before. It was thrilling and terrifying, and it left me with a hunger to do more useful things with tech for the publishing community. I’m still figuring out where to apply that hunger next. (If you have ideas for book-related calculations you’d like to see automated, let me know!)
People have been telling me the tool is empowering, that seeing the numbers helped them make sense of the frustrating opacity of the publishing industry. Others, like Publishers Weekly, have called the tool depressing. To me, data is what you make of it. I’m grateful for all the fascinating discussion the calculator has spawned on social media and I hope the transparency train doesn’t end here.
You can access the “When Do I Earn Out?” calculator at its fancy new domain, www.thepublishingcalculator.com. Play around with the tool and decide for yourself if it’s empowering or depressing. Above all, I hope you find it useful.
If you’d like to support me, a debut author who has yet to prove I’m a sound investment to my publisher, consider checking out my book and adding it on Goodreads. MAGEBIKE COURIER is an adult fantasy novel that was pitched to my publisher as “Mad Max: Fury Road with magic motorcycles and sapphic romance.” It’s coming out in 2024 and at some point in the future, I’d really like to earn out my advance.
