Below shows the relationships between author, publisher and editor.
1. Relationship between author and publisher
The publisher of a work might receive a percentage calculated on a wholesale or a specific price and or a fixed amount on each book that is sold.
Publishers, at times, reduced the risk of this type of arrangement, by agreeing only to pay this after a certain amount of copies had sold.
Publishers made publication arrangements, and authors covered all expenses (today the practice of authors paying for their publications is often called vanity publishing, and is looked down upon by many publishers, even though it may have been a common and accepted practice in the past).
Publishers would receive a percentage on the sale of every copy of a book, and the author would receive the rest of the money made.
2. Relationship between author and editor
The relationship between the author and the editor, often the author’s only liaison to the publishing company, is often characterized as the site of tension.
For the author to reach his or her audience, the work usually must attract the attention of the editor. The idea of the author as the sole meaning-maker of necessity changes to include the influences of the editor and the publisher in order to engage the audience in writing as a social act.
Good relationships between authors and editors are largely found to be the product of an awareness of writing as a social act, and an effort to create a balance wherein the authority over the text is negotiated among all of the positions in the industry, so that the meaning is effectively carried from the meaning-maker to the readership.
A standard contract for an author will usually include provision for payment in the form of an advance and royalties. An advance is a lump sum paid in advance of publication.
An advance must be earned out before royalties are payable. And advance may be paid in two lump sums: the first payment on contract signing, and the second on delivery of the completed manuscript or on publication.
An author’s contract may specify, for example, that they will earn 10% of the retail price of each book sold. Some contracts specify a scale of royalties payable (for example, where royalties start at 10% for the first 10,000 sales, but then increase to a higher percentage rate at higher sale thresholds).
An author’s book must earn out their advance before any further royalties are paid.
For example, if an author is paid a modest advance of $2000.00, and their royalty rate is 10% of a book priced at $20.00 – that is, $2.00 per book – the book will need to sell 1000 copies before any further payment will be made. Publishers typically withhold payment of a percentage of royalties earned against returns.
In some countries, authors also earn income from a government scheme such as the ELR (Educational Lending Right) and PLR (Public Lending Right) schemes in Australia. Under these schemes, authors are paid a fee for the number of copies of their books in educational and/or public libraries.
These days, many authors supplement their income from book sales with public speaking engagements, school visits, residencies, grants, and teaching positions.
Ghostwriters, technical writers, and textbooks writers are typically paid in a different way: usually a set fee or a per word rate rather than on a percentage of sales.