I regularly get some basic questions on writing and publishing, so I've culled a dozen to help those who are just getting started. All of these are actual questions I've received recently, though I'm not going to attach names to them since they've come in from more than one source.
"What is an advance?" — An advance against royalties is money paid by the publisher to the author prior to publication of the book. If you're doing a novel with Pocket, for example, they might offer you a contract that pays you $2000 upon signing the deal, another $2000 when you turn it in, and a final $2000 when your book releases. That means you're basically in the red $6000 — so with every book sold, you are credited with the earned royalty. (If you're earning $1 per book, and they sell one book, you're now in the red $5999. Make sense?) Advances aren't based on how much the editor likes you, but on how many copies the publisher expects to sell.
"What does it mean when a book 'earns out'?" — Go back to my previous answer… let's say you're in the red $6000, and you're earning $1 per book. When the publisher sells six thousand copies, you will have earned back your advance. That's when your book has "earned out" — that is, it's earned back its advance. You're now making money on each book sold, and the publisher will keep a record of that and send you a check twice a year for the money earned.
"My book didn't earn out the advance. Do I need to pay the unearned balance back?" — Nope. First, your contract doesn't call for you to do so. Second, an unearned advance does not mean the publisher lost money (even though they make it sound that way sometimes). Think of it this way… if your book sold for $12.99, and you made a dollar on it, where did the rest of the money go? A chunk went to the retailer. The rest goes to the publisher. If they're paying you a 15% royalty on net, the publisher is keeping the other 85%. The majority of books don't earn out, and publishers are still in business, so that should tell you what you need to know.
"What is a fair advance?" — That's an impossible question to answer. I've seen authors do deals for no advance, and I signed an author to the single largest one-book advance in CBA history. Both authors were happy. Who can say what "fair" is? Some authors are starting their careers doing small genre books for $1500, then graduating to $5000 and $6000 deals. Others are signing $15,000 deals right off the bat. (If you're doing better than that, you're way ahead of most people who are early in their careers.) My advice is to think "time-to-value." Is the amount you're being paid fair, in your mind, to the time you're spending on it? If not, consider if you are (1) at the start of your career, and therefore paying your dues, or (2) in need of a change in plan so that you're making more money, or (3) an arrogant putz who overvalues his time.
"What is a standard royalty?" – Most general market contracts will pay you 10% of the retail price of your hardcover book on the first 5000 copies sold, 12.5% on the next 5000 copies sold, and 15% thereafter. Most trade paper books will pay you 7.5%. Mass market is less. In CBA circles it's harder to gauge, since they (1) pay on net receipts instead of the retail price, and (2) are willing to negotiate more on royalties.
"What is 'CBA' and 'ABA'?" – CBA is officially the acronym for the Christian Booksellers Association, a group of religious retailers. But in the real world it is used to refer to the realm of religious publishing — therefore people will say things like, "Is this safe for CBA?" when discussing a controversial book. ABA is the outdated acronym for the American Booksellers Association, but again it's frequently used to differentiate the reading world that is simply "not CBA." (I should add that I most frequently hear it these days when talking with CBA types — someone will say, "I think that's an ABA book." Few people outside of CBA use the term that way. They're more apt to say, "I think that's a general market book.)
"What does it mean when you say an author wrote a genre novel?" — Technically you could probably argue that every novel is a "genre novel." But in the nomenclature of publishing, a genre novel is a work of fiction that shares themes, values, stories, characters, and settings that appeal to readers familiar with similar books. So "cozy mysteries" are a genre, and "historical romance" is a genre, as are "westerns," "detective," "horror," and "sci-fi." Two things to keep in mind about all genre fiction: First, each genre has clear conventions or rules (for example, "the mystery will get solved" or "the heroine will meet the hero early in the book"). Second, each genre is clearly marketed to its unique readership (for example, the cover of a western will clearly feature guns and horses).
"What is narrative nonfiction?" -- The use of fiction techniques to tell a nonfiction story. The genre really began with Truman Capote's In Cold Blood, which reads like a contemporary police novel even though the story is true. Other good examples would include Sebastian Junger's The Perfect Storm and John Krakauer's In Thin Air. There's no mystery to Junger's book — the reader knows it's the story about a swordfishing boat that went missing off the Grand Banks during a terrible Nor-easter. But the story is told linearly, with background on the boat, the sailors, the town, the fishing industry, even the science of weather forecasting and the physics of waves. The fact that it's true makes it all that more interesting.
"When you use the term 'over-the-transom,' what does that mean?" – Unsolicited manuscripts that come into an agent's office or that are dropped on an editor's desk are referred to as having come in "over the transom." Even though almost nobody has a transom any more. We also refer to the stack of unsoliciteds as "the slush pile," as well as other, earthier terms that my mom wouldn't want me to use in a public forum like this.
"What does 'requested materials' refer to?" – Let's say you meet an editor at a writers' conference, pitch your book to her, and she asks you to send her your proposal. That envelope can be marked "requested materials," so that it doesn't get tossed in the slush pile.
"What do you mean when you say something is a 'trade' book?" — Again, that's just publishing lingo for a book that is aimed at the lay reader, rather than a professional in an industry.
"What is a 'vanity' or 'subsidy' publisher?" – Most commercial publishers will offer you a contract, edit and produce your book, distribute and market it, and pay you a royalty for each copy sold. You do not pay them to do it — they are in business to create and sell books, so they actually pay you for making money off your creative thinking. A vanity press charges you a fee to produce your book. They come in all shapes and sizes, may or may not edit your book, market it, or assist with distribution. I've noticed some companies are now using the term "custom publishing," since that
doesn't have the same baggage as "vanity publishing." That may be fair in the new economy — some of the custom publishers (like Winepress Publishing) works with busy speakers who make more creating their own books by selling them in the back of the room than they would make working with a royalty publisher.
Back to writing conferences in the near future…