How Does Book Publishing Work?

If you're interested in becoming a writer, you must be asking the age old question of how this industry works. People treat books as charming gifts that make grandparents happy, and children yearning for parents to read for them. It's not the lottery, but it also isn't a nine to five job, so how does this business even make money at all?


The most obvious reason why you're hesitating is why not self publish? It's available to everyone, and these companies make it so easy to fulfill your every need, many times, for free!

And our answer is that's cute. And if cute is all you're after, then you've completed your job. You can love it as a hobby, and never see it grow. Because marketing isn't cute, book tours and product placement isn't cute. And let's not get started on the amount of socializing you're going to have to do, just to socialize more for further sales. Which in the end could make you a successful writer, given that your Editor will endure the harsh times in your writing, with you -- and your Publisher would be more than happy to help you organize the events and press, on your behalf.

It's a nightmare, and some have been able to succeed in wearing all those hats, at once. In which, we commend you, dear self-publisher. We hope to see more of you, as the publishing industry endures.

For those interested in hearing about what happens on the traditional publishing side of the fence, we simplify the technicalities in this list:
  1. Your book is a product. We treat it like a product, we sell it as a product, and you, as the Author, are its spokesman. Be ready to speak.
  2. Authors are not products. Authors are celebrities. Be ready to speak.
  3. Authors sign their product over to the publisher to reprint, and make merch. In exchange, Author makes a percentage off of the sales, royalties, and (sometimes) box office/event tickets. Authors also make commission from autograph signings. 
  4. Not all Publishers pay an Advance. Advances are profits you would've made, but instead is paid forward to you, so you can have minimum wage to support yourself while you finish your book, for publication. 
  5. Some Publishers require full copyrights to your book. We request to partial copyrights, which allow you to restrict what we can and can't do. Signing over your copyrights means you are giving permission to the following:
    • Publishing ebooks
    • Publishing tradeback prints
    • Publishing hardback prints
    • Publishing translated prints
    • Publishing in braille
    • Publishing in large prints
    • Producing audiobooks
    • Producing commercials
    • Producing artwork
    • Producing 1st, 2nd, 3rd Editions, etc.
    • Selling your intellectual properties to film studios
    • Selling your intellectual properties to food companies, such as Kroger
    • And the list goes on...
  6. Authors have rights to the sales report. Demand it once every season, and you should be able to calculate how much you're supposed to earn.
  7. You can make more money by writing a series, which will build the worth of your intellectual property, and franchise the story internationally.
  8. Your Editor is your big sister, but your Publisher is your mom. It's more professional than it sounds, but these are basically your relationships in this business. As Editors will harangue you for deadlines, fight for you when you can't meet them, and fight with you to catch up to them. And Publishers will fight for your value in the industry, but will nag you constantly for perfection, all for the sake of both your futures. It's always sad when you break away from them, when you find another Publisher that will pay you more, but that's just how it goes.
  9. Movies will never compare to your books. Hollywood has done it, Studio Ghibli has done it, and half the time, the Authors are dissatisfied with the film version. But again, your book is a product. Read your contract, and reap the benefits.
  10. Write some more, and do it all again.


There are four things you should look for:
  1. Who are you giving the copyrights to.
  2. How much of your copyrights are you willing to give.
  3. How much money are you earning.
  4. Can you get more from other Publishers?
Five times out of six, the legal jargon is more dangerous than the financial. So, learn the following jargon:

  • Rights & Permission: Some Publishers need all your copyright to procure Sub-licensing. You, as an Author, have the right to give partial permission to your copyright, like no rights to Braille Hardcovers, but all rights to Braille Tradebacks given to the Publisher. This is popular with Magazine Publishers, which escalates the value of one's article the more often the article is published. There have been numerous pros and cons to this, but, ultimately, it all boils down to money. How much is that Braille Hardcover really worth to the Publisher?
  • Advances against Royalties: An advance is a large sum of payment that is given to the Author, taken from potential royalties, months ahead of book sales. This also means, until the exact amount of royalties match the advance the Author received, no royalties will be forwarded to them. Royalties are a percentage of the net profit that are forwarded to the Author instead of the Publisher, due to high rates in sales within a month or season.
  • Gross Profit vs. Net Profit: Gross Profit means the amount of profit that pays for the operation of the full production - this pays the employees, inventory, packaging and shipping, etc. Net Profit is the extra profit that's free to be spent by company, and license owners (ie Authors). Typically, the Net Profit is a small percentage, but is easily spared by the Publisher via contract. Gross is almost never accessible, even to the Publisher - especially, during returns or a loss on sales.
  • License & Sub-license: When a title or character is copyrighted, it is considered a brand. When it is trademarked, it's considered a licensed product. Licensed products are allowed to be franchised, which leads to merchandising. Publishers with Sub-licensing rights can sell your license for you, to international producers of film, food, toys, etc., which leads to worldwide tours.
  • Representations & Warranties: This means nothing is plagiarized and you own everything you are submitting to the publisher. This is liability on you, in case something goes wrong, such as a map in the novel or Sherlock Holmes integrated in your sci-fi story.


In most publications, a certain decorum is necessary to qualify for the Editor's consideration. Imagine this like a job interview. In order to quality, you have to over qualify and decide whether to accept lower pay to get your foot in the door, or argue your case as to why you should consider their offer at all.

With that said, here are the steps you'll need to learn, to proceed your career in Authorship:

What do the Publishers publish?

It may seem that Publishers will produce your book, without a doubt. But, more often than not, that fiction book Publisher produces content for an older age group, or a certain political group, or an ethnic group. Or, sometimes, the Publisher does something highly distinct, like Poetry submissions, not particularly Poems, or Vers Libre.

Read their books, their rules, and study whom they may be looking for to publish.

What script format do they want?

Some Publishers require 1.5 spacing between lines, or Courier typeface, for their consideration.

The rules for their formats are always on the submission page of their website. If they don't have one, then prepare for a whole mess of letters to prolong your answers, until you are rejected. At this point, please call the Publishing House's phone number, and ask if they received your inquiry.

Do they require a Cover Letter?

The answer is most likely is yes. When writing one, reserve an introduction about yourself on the first paragraph, including your accomplishments, where you are in your life (ie "I'm a young columnist at my highschool" or "I have been nominated for said award in this local competition").

Do they need a Preface?

If you are signed up to a large publishing company, like Penguin-Random House, you're most likely to submit a Preface to have your book considered for publication and advance. It's a sneak peek to the world you're painting - is it a romance, in a city, with Dinosaurs, what's it about? It's not a summary, so please don't give away the ending, just your writing talent.

This allows you time to finish your book for the next few months, with your manuscript holding its reservation to be published by your large publishing company.

If not, then you're writing a prologue. Either one is placed prior to your first chapter.

Are you writing a series?

This is the most attractive deal for most publishers. Series mean trademarks, trademarks lead to licensing, franchising, and a whole lot of money.

Needless to say, this is a lot of work. So, be ready for reasons why no one wants it, or why it's taking so long to produce.

Have you been published before?

Publishers love the word "exclusive". That includes world premieres, local premieres, and first edition. But, they also like money. So, if the last Publisher did all the heavy lifting, then their job is easier, and you'll be able to sell more books.

Will this Publisher have exclusive rights?

Again, "exclusive". You may have figured out how copyrights already work, but Publishers do kill for full copyright. Especially, when other Publishers are looking at your book, and want to make their own international version, in their foreign language.

How much is enough in Royalties, Sales, and Commission?

Traditionally, Authors would agree between 4% and 7% for yearly Royalties. This was justifiable because their resources would allow you to gain a living wage, and could afford the company to manufacture your book's merchandise. These are not made through sales, Royalties are made through amount of sales, which the bookshops are contracted to report. Royalties are typically taken from the Publisher's Gross Profit, and if a certain rate is met (ie 500 books sold this month, or 3k copies sold last month), the higher the Royalty rate is distributed to the Author - which traditionally is 15%-30% from the month's revenue Sale, depending on the book format (tradeback, hardcover, audiobook, etc.).

Rarely will the Author earn any money directly from the Sales. Unless they're self-published, or sell their own copies during their tour.

And as for Commissions, Authors are paid per signature of their own books, during their appearance tours. Much like headshots in Hollywood, books raise their value with their Author's signature. But, that is when the Author has fame. Otherwise, it's just good promo.

Many Authors remedy this by scheduling their tours and sales independently, so to keep all three sources of income for themselves.

Things have changed since the good old days of amateur Ebook self-publication. Disrupting the reign of the Big Five, the great conglomerates that controlled the publishing world, had a great ten year run. But, once Amazon became the monolith of all distributors, returning to the traditional Publisher's world became near impossible. Which, currently, if self-publishers wanted to scale up their operations into a full publishing house, that cut of the pie the late companies had lost are now the new Publisher's cut to keep.

As dismal as that may sound, there is still hope. For those that have learned their lesson, new ideas have sprouted, which have led to unorthodox contracts and resources. We're all experimenting. And your writing has become platinum to us, not just silver. 

Needless to say, you have options.

To learn about what improvements Azure Lorica has implemented for our book publications, read our latest posts.