I thought about having some witty, clever title to this until I realized that this was going to be a business post. So I decided to go with a serious title. Well, as serious as I can be, at least.

I’ve been talking with a few people lately about the advantages (and disadvantages) of being traditionally published. The biggest disadvantage, of course, is the delay between turning in your novel and it being published. Mitigating circumstances aside (missing a deadline, etc.), it’s not a fast path to getting your book out there. You’re also reliant on bookstores even agreeing to carry your book, which may or may not sell (marketing helps; word of mouth is better), and at the mercy of bookstore employees putting it out onto shelves (I’ve heard cashiers brag about how they don’t even stick books of authors they don’t like out on the shelves at all, then return it after 30 days).

On the other hand… being able to swing by multiple store locations over the course of a weekend to sign all their stock of your books they have is a pretty awesome feeling (The Cordova Invades Utah Stealth Signing Tour of 2023 was a HUGE success). Plus, despite what some would have you think, there is something people like about going into actual bookshops to buy books, and discovering new authors as well.

Now, I’m unlikely to stop being a hybrid author anytime soon (hybrids are rare and mythical creatures who successfully straddle both the traditionally published and indie worlds), but I’m not going to talk about those today. No, today I’m focusing on one of the most commonly misunderstood pitfalls a traditionally published author comes across — earn out versus sell through.

First, some context on what those two things are.

Let’s start with earn out. Basically, earn out is earning out your advance against the projected book sales. Basically, it’s what the publishing house thinks they will pay out for royalties at a minimum, oftentimes negotiated by an agent (but not always). If the publisher has a huge plan to push your book, get their marketing behind it, or you have a proven track record of hitting the bestseller list regularly (not the New York Times bestseller list, since that one isn’t accurate but purely subjective and opinion-based), you (or more often, your agent) can push for a bigger advance. Some bestselling authors prefer smaller advances because it means they will earn out their advance faster.

While being a peripheral bestselling author myself (my coauthor got me on that list), I prefer smaller advances because it means I earn out faster. So let’s say you get a $10,000 advance (I picked a round number for simplicity purposes… most new authors see maybe $5,000 — $9,000 advances, maybe) and it’s priced at $28 (yay! you got a hardcover release!). They printed 8,000 copies (they don’t think it’s going to be a blockbuster, but it’s a respectable amount). So if you sell roughly 1,200 copies (assuming your payout is $2.80 per book sold, or 10%) and 6,000 ebooks (let’s assume a payout of $2.50 per ebook sold, or 25% of a $9.99 ebook) you’ve earned out your advance and will see royalty checks in the future. Congratulations, you are a success!

…well, kind of.

While it’s true you’ve earned out that advance, publishers are going to look at your sell through and can reasonably argue that you actually failed. Wait, what? Why? It makes no sense, right? Well, they look at the bigger picture. Because while ebook sales are nice, the whole reason you went traditional publishing in the first place was to sell print copies in bookstores. And you, my friend, have a very crappy sell through percentage.

So what is sell through? Sell through is the percentage of the print books you sell versus what was actually printed. So while above you earned out your advance, what you sold in print sucks. And most traditional publishers haven’t moved past this mental mindset yet when it comes to determining who is a success or not. While 1,200 print books is reasonably decent for sales of a new and unknown author, they printed 8,000 copies. You didn’t even sell 25% of your printed books, i.e., your sell through. If they decide to continue to publish you (or the series) your next print run will definitely be lower.

This will also limit just how many copies get into bookstores because the distributor won’t be carrying as many of your books. Many publishers look at authors with a 65% sell through rate as a “success.” Some might settle for 50%. Now, not all publishers are like this. Some are willing to settle for less that 50% sell through if they’re at the beginning of a new series. They know it takes a long time for series to gain steam these days, especially with some of the bigger authors out there not finishing their series. Readers don’t have confidence in authors to give a new series a chance initially.

But that’s a different discussion for another day.

So while they’re sitting on 6,800 copies of your print book in their warehouses, that storage costs money and space (space that can be used for a massive bestselling author who they can barely keep the print book in stock). It also cost to print 8,000 copies of your print book in the first place, as well as costs which don’t count against that advance of yours (gross revenue versus actual profit are two very different things, so keep that in mind in the future… there will be a pop quiz at the end–I kid, I kid).

For your next book, they give you another $10,000 advance (remember to pay your f***ing taxes!). Nice. Your next book they print 3,000 copies (uh… that sucks, but hey, they’re still printing it). It’s harder to find in stores, so people go to their old standby, Amazon, to buy the print copy. Not horrible, but it also means other distributors will have a harder time getting your book for their stores. Your ebook sales are still strong (let’s go! 3,000 sales, which means half of your initial readers stuck with you) and you moved about 1,000 print sales (hey, you kept 80% of your print readers… hell yeah!).

Now instead of having a crappy sell through percentage of 15% like your first book, your sell through is now at 33%. Still not great, but better than the first. However, your ebook sales are at 50% of the first book, which means you didn’t earn out that $10,000 advance for the second book. Now you’re saddled with a crappy sell through for two books, and you’ve shown you can’t even earn out your advances (their argument, not mine). This is usually when editors at publishing houses make the decision to either drop the author and series, or give it a go for one more book.

A second book, however, will also increase sales in book 1, so it’s not the end of the world. Still, it’s very unlikely at this point that first book is going to crack the 50% sell through plateau (unless something unusual happens), so now you’ve “got a rep” as being a difficult sell. I’ve seen this happen to quite a few of my friends over the years. It’s rough to watch them struggle to figure out what they did wrong.

Nine times out of ten, it’s not the author’s fault at all. It’s just this really bizarre industry that uses magic math to figure crap out.

My most recent advance was miniscule. I did that by design. I have no issues or worries about earning out my advance, no. I have a good track record of doing that. No, what I did was take a smaller advance so my publisher can use that extra money to do more marketing. I know the print run is going to be larger than what I’ve had before, so I really want to ensure that the sell through is above 50%. To do that, I need marketing, word of mouth, and get my book in the freaking bookstores in the first place. I need people to buy the print book (buying the ebook is cool, too… the royalty payout percentage for ebooks is higher than print) because of the sell through. With that, not only will my publisher look at my sell through and think “we have a hit on our hands,” other publishers will be open to projects from me in the future as well. It’ll give me a degree of flexibility I wouldn’t have had with a sell through percentage of two books at 20% (using our example from earlier).

And in this business, flexibility is the new name of the game.

Speaking of print books, have you pre-ordered your copy of Jason’s upcoming novel from Baen Books, MOUNTAIN OF FIRE?

When the lights went out, humanity died. But from darkness came hope.

The surviving students at St. Dominic’s Preparatory School for Girls have had it rough since the H7D3 virus virtually wiped out human civilization. Between rampaging hordes of zombies and wannabe tinpot dictators, the only thing holding them together is the iron will of the school’s lone surviving nun, Sister Ann. They know how to survive, but rebuilding isn’t only about surviving—it’s about rising up.

As more survivors start to seek asylum at the isolated school, it becomes readily apparent that the school can be the anvil from which humanity is reforged. To achieve this, though, the survivors must rely on one another to rebuild. The flames of life will be fanned, and the sparks from every strike of the hammer will provide light in the darkness.

But it will not be easy.

From atop the mountain of fire, this beacon of hope must spread—or humanity will die quietly in the long, final night.