When I was a newly minted writer first querying I had dreams of huge royalty checks (who doesn’t at first?) but then I landed my first agent and I was slapped with reality. Publishers (the Big 6 certainly, and most small presses as well) take 90% of your royalties. Oh yes, really. You’re left with 10% off the price of a net sale, then your agent gets 15% off that before you ever even see it.
Here’s an example: Let’s say your book’s retail price is $17.99 (typical price for a YA hardback new release). Wait though, you don’t get the royalties off that price. Your publisher offers the retailer a discount, usually at least 45% to 55%, which brings your net price down to $9.89 best case scenario. That’s why you see books marked down so far, because the retailer can afford it. Then you get 10% of that, about .99 cents. Wait again! Your agent gets 15% of that .99 cents, leaving you .84 cents off the sale of a hardback book priced at $17.99. Think I’m wrong, ask any of your traditionally published friends. They’ll tell you. I was floored when my agent told me that was how it worked.
The one saving grace to all of this is that most of us don’t write for the money, we write because it’s what we love to do. Still, it would be nice if publishers stopped giving such ridiculously deep discounts to retailers and stopped taking the lion’s share of an author’s profits. I won’t hold my breath on that one though.