Devine, James wrote:
strictly speaking, I'm told that a publisher's advance is not really an advance (i.e., cash on the barrel). There are all sorts of limits on it. But I have no direct knowledge and it would be interesting to hear how advances really work.Advances are technically "advances against royalties" - royalties being a fixed percentage (usually 10-15%) of a book's cover price paid to the author. But you don't get paid royalties until enough books are sold to cover the advance.
Say Mankiw's book retails for $40, and he gets a 15% royalty. (Dunno the real numbers, just guessing.) That works out to $6 per copy sold. To earn back the advance, he'd have to sell 166,667 copies. If it sold less than that, he'd get to keep the $1m. If it sold more, he'd get $6 per copy (in addition to the $1m).
Generally advances are paid in tranches - e.g. a third on signing the contract, a third on delivery of the ms., and the final third on publication. Details may vary, of course.
There's a saying in the biz that if you get paid royalties, your advance wasn't big enough.
Doug
