Doug writes: >Say Mankiw's book retails for $40, and he gets a 15% royalty. (Dunno
the real numbers, just guessing.)<
I don't know about the %, but the book's more likely to sell for $100. (My students go on-line to avoid the retail price...)
------------------------
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
> -----Original Message-----
> From: Doug Henwood [mailto:[EMAIL PROTECTED]]
> Sent: Thursday, January 23, 2003 11:18 AM
> To: [EMAIL PROTECTED]
> Subject: [PEN-L:34076] Re: RE: Re: RE: RE: Re: tax theory/policy
>
>
> 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
>
>
