Why You Should Pay Authors When You Borrow Their Books, Buy Them Used, or Purchase Them New at Deep Discount
Introduction
Authors, ideally, get paid a royalty on new book sales, usually 10-15% on a hardcover and 5-10% on a paperback. When you borrow a book or buy it used, the author gets nothing.
AE's Fair Payment Tool lets you pay an author an amount that's fair for any book you read.
It's secured by Stripe and doesn't store credit/debit cards.
Here's why you should use this tool.
1. Authors' Earnings Are Surprisingly Low
Median income for full-time authors from their books in 2022 was approximately $10,000 for traditionally-published authors and $12,800 for self-published authors.
A big reason earnings are so low is that readers get books in ways that don't pay the authors.
2. Borrowing Books Is Free Riding
~38% of books that are read are borrowed, a Pew Research Center survey found. It's worth remembering, when you borrow and read a book, you're free riding off of the author. That was cool in the past because you couldn't pay the author directly. But now, you can.
3. Authors Receive $0 on Sales of New Books at Deep Discount
When you buy a new book at deep discount (say, 50% off), it's usually a remainder or a gray market book. You probably didn't know that authors receive $0 on sales of these books.
4. Used Book Sales Cut Out Authors and Depress New Book Prices
The used book market gives you low prices and that's great. But, the writers you like gain no material benefit at all when their books are sold a second, third, or fourth time.
In a real sense, some of your savings comes straight out of the author's wallet.
Used book sales are 15% to 18% of the book market and growing, turbo-charged by tech. Amazon, Google and others make it easy to buy a pre-owned copy of virtually any title.
"More than half of consumers within the US & UK choose to buy more second-hand than new books." Used Book Sales Statistics, Dean Talbot, December 20, 2022, WORDSRATED
"In fact, global used book sales are growing at a faster pace than new book [sales], and the projections are that things will remain this way over the next decade.” Book Sales Statistics, Dimitrije Curcic, June 13, 2023, WORDSRATED
That's not all. When used books are priced far below new ones, say, $2.00 - $5.00, publishers must cut list prices to compete, which cuts royalties and devalues the authors' works.
5. Used + Borrowed Books Make Up Over 50% of Book Usage
Alas, the statement above that used books are "15% to 18% of the market" understates the problem. It refers to revenues, not the number of books sold.
Back of the envelope, assume used books sell for 40% of the price of new books, on average.
That means, per $100 in sales, used books sell 2.5 units for every new, paper book sold.
15% (of revenues) x 2.5 = 37.5%. That means ~37.5% of paper books sold are used.
Then, add books borrowed from friends and libraries (~38% of book usage).
In total, authors receive nothing for most of the books people read.
6. 75% of Books Don't Generate Royalties
~75% of books don't generate royalties because they don’t sell enough copies to "earn out" their advances. For example, Merritt Tierce (I Published My Debut Novel to Critical Acclaim—and Then I Promptly Went Broke) received no royalties while selling 12,000 books.
So, if you think an author deserves a royalty on a book, consider using the Fair Payment Tool.
Other Ways Author Income Is Held Down
Advances
An advance is a payment to an author by a publisher to see her through the hard work of writing until her manuscript is done. Lucrative advances are long gone for almost all authors. Literary agent Chip MacGregor estimates $5,000 - $20,000 for first time non-fiction authors.
Royalty Rates Are Low
Standard royalty rates* are:
Hardcover: 10%-15%
Trade paperback: 7.5%
Mass-market paperback: 5%
eBook and audiobook: 25% of net publisher receipts
Buy a new $25.00 hardcover. If the advance is paid off, the author gets $2.50 to $3.75.
Buy a new $10.00 paperback. If the advance is paid off, the author gets 50¢ or 75¢.
According to the Authors Guild, the standard e-book royalty rate is half of what it should be.
*Sources: Scribemedia, agent Mark Gottlieb, agent Chip MacGregor, author Alan Jacobson, publisher Andrew Franklin, and the Authors Guild.