Challenge,  On Writing,  publishing

The Math

Of Indie vs Traditional…

You always know when I am going to do math, it will not be pretty. But a number of things happened in the last week that I figured it was time. First off, dealing with that myth of it costing so much to do an indie book.

And second today a viral post from a traditional writer who got six figure deals and was whining that no one told her what would really happen (even though I am 100% sure she would have never listened.)

So with those two in mind, let’s play a math game. With other important factors involved.

Now you can be angry at me because I am going to make one assumption. I am going to assume the traditionally published writer is horrid at business and doesn’t know taxes, while the indie writer understands taxes and business. (That seems to be a very safe assumption from my observation and the viral post today.)

So hang on, here goes…


The Deal… $120,000 for two books. (A good deal, not normal, but not unusual either. Notice the author will call it a six-figure deal.) This all happens a great deal in genre books for like $5,000 per book. But for this going with the six-figure deal.

The Loss… Author loses all copyrights and the books and all control of the books for the life of the copyright.

Payments… Four payments per book, spread over four years for the two books. Eight payments total sent through the agent.

Agent Fee off the top of each payment… 15%

State and Fed taxes since author does not understand business…. 40%

So author, for six figure book deal will get the following to live on, basically…

$60,000 per book divided by 4 payments per book equals $15,000 per payment.

Agent takes 15% leaving $12,750 per payment.

Taxes take 40% leaving $7,650 per payment. (As I said, the author does not understand how to save on taxes.)

Assume payments are signing, turn-in, acceptance, and publication, one book published per year.

So first year author gets 2 signing payments and a turn-in payment. $22,950 for the three payments in year one.

Second year author gets acceptance of book 1 and maybe turn-in of book two.  Maybe. So two payments of $15,300 total for the year.

Third year author gets publication of book one, acceptance of book two for another $15,300 total.

Fourth year author gets publication of book two. $7,650 total.

Years Five through Year Twenty, author gets nothing.

So author cash flow looks like this for this fantastic six-figure deal.

Year One… $22,950
Year Two… $15,300
Year Three… $15,300
Year Four… $7,650
Years Five through Twenty… $0.00

Total usable income over twenty years… $61,200

The only hope this author has of continuing on is if he/she can sell another deal and double up on some of those years of payments with two more books. The author will make no royalties because the books will never “earn out” and have little to no overseas sales, most of which were included in the advance. Audio also included in the advance.

In other words, there will be no extra money.

But selling two more books before the author gets dropped might happen and help a few of those years. But if normal, the author above will be done with publishing after year four and out.

What do I mean by “earn out” in traditional publishing. It means making enough sales to pay back the $60,000 advance at the author rate. Traditional writers get from 6% to 12% of book price per sale depending on the state. And anything sold at a discount the author will get less or nothing. All of this is in a standard traditional contract.

So being generous in a couple ways, lets say the traditional publisher prices the electronic book correctly (big if) at $6.99 electronic and the author at 10% would then get about 70 cents per sale. (They earn less on paper and hardback per sale.) To earn even $30,000 (half of the advance back) the book would have to sell about 43,000 books. That would hit every bestseller list at that number. To only earn half of the advance back.

Chances are these books would sell in the 20,000 copy level, at best, including paper. (Yes, publisher makes money at that sales level, author gets nothing more.)

And note: Chances of an author getting another one or two book deal at the same amount is slight. Traditional publishing is not set up that way. Most authors are two books and out. A few really lucky ones get four books. You have to hit the lottery to keep going longer than that in traditional except maybe at low genre numbers.

Traditional publishing these days is not after books that sell, but in most cases just the IP. All accounting stuff. If they end up with books that hit the lottery, so much the better, but they win even when an author loses.

And once the books are published, the author has lost them completely, remember. The publisher owns them and all IP for the life of the copyright and since the sales did not earn out, what few sales that trickle in over the years of coming neglect will just go to that black hole.

To live on this six-figure deal, the writer better be teaching college.


Only fair way to compare this is two books for an indie writer. Even though an indie writer has no traditional publishing delays, let me try. But the assumption is that the indie writer will be writing at speed, maybe four books per year, has no agent, and is good with taxes and has learned how to shelter money.

The Deal… Author puts the two books out in the same series, spaced three months apart. Author puts them wide, meaning around the world, to as many places possible to sell the book. Author also does trade paper through Amazon Print and Ingram Spark and hardback edition through Ingram Spark.

Cost… Around $300 per book, so $600 total costs for the two books. Author retains all copyright to the book. And all control.

Payments… Monthly from many, many places, starting two months after the book is published.

Author gets from electronic book sales around 70% for the most part. Paper and hardback sales vary in the 10% to 20% range depending.

So now I have to make a couple of assumptions. Indie author is going to continue to write and put out books regularly for readers. (Traditional writers are stopped by their publishers.)

Also going to make some general sales assumptions.

First Year… Both books published, both sell well around the world, both sell about 500 copies each electronic over the entire year. In all channels. Or about 42 books each per month through all channels.

$6.99 cover price.  Author makes $4.89 per sale. Each book sells 500, so each book makes $2,445 so the two books make for the author the first year about $4,890.

NOTE: To indie authors, this will look like nothing is coming in. They call this “coffee money” since only about $400 comes in per month and that is divided into a half-dozen payments from different sources over the month, some payments only $50, some over a hundred bucks. This looks like failure to beginning indie writers and many quit writing even before they add it up at the end of the year. (Smart indie writers though see the good side of this trickle that adds up.)

Second Year... If the author keeps putting out more books in the series, the first two books would make about the same. $4,890.

Third Year... Repeat

Fourth Year… Repeat

BUT… NOT INCLUDING A TON OF OTHER SALES CHANNELS… The above was only for electronic. Both books would be in paper and audio. Sales would trickle there. Both books have translation possibilities. Both books have bundle income and BookBub and direct sales and so much more, not counting all the chances at licensing.

(Traditional publishers do none of that and the author would get none of it even if they did because it would go against the huge advance.)

Remember, the indie author has retained all copyright and all control. Traditional writer has (for an advance payment) given away all copyright and all control.

So say you redo your covers every few years in the series, keep the books active, the series active and selling.

Years Five through Twenty… Each book in just electronic goes along at the 500 copy rate per year AVERAGE, never really catching on, never falling much, staying around the average because the series is being tended and kept up.

So over those 16 years the author would make another $78,000 approximately ON JUST THOSE TWO BOOKS. Not counting paper, audio, hardback, and all the other licensing stuff. Or new markets that will come along.

So indie author will make around $98,000 on those two books over the same twenty years. Minimum.

Again, to be clear, that is minimum. And author retain all rights, all control, and all other money.

So traditional writer sells a great six-figure deal for two books and over twenty years makes about $61,000 to spend and still no hope of getting the books back or making another cent from them.

Indie writer has made on just the basic, coffee-money level of sales on the two books over the same twenty years at least $98,000 and is still earning.


Indie writer would make that same amount on the next two books written the first year while the traditional writer was waiting for rewrite notes from their editor on their first book and approval on an outline for the second book.

And in the second year indie writer would write four more books while the traditional writer was writing the second contract book and waiting for checks and rewrites.

So in the first two years, the traditional writer wrote two books and made a finite $61,000 on the six figure deal.

Those two years the indie writer will write eight books and make upwards of $400,000 real, useable money on the eight novels with the potential of so much more.

Wonder why so many of us ran from traditional publishing to indie???









  • Harvey Stanbrough

    Dean, thanks for this. Great post. And thanks for all you’ve taught me personally over the past five years.

    Being one who enjoys taking responsibility for my own success or failure, sometimes I’m hard-headed. But even your advice to not attempt to teach WITD finally sank in. You simply can’t help those who don’t want to help themselves. Now I’m happily working on my 8th novel of the year (I went into a cocoon for a month and a half) and already excited about upcoming projects, including more about licensing.

  • Scott


    I love math posts and use it frequently when I encourage other writers to start and maintain their writing.

    But I do have a question. In your post, you write “both sell about 500 copies each electronic over the entire year. In all channels. Or about 42 books each per month through all channels.”


    How do we earn upwards of 42 copies per month? That’s the age-old discoverability question. Is it advertising? Because wouldn’t that eat away at the overall per book cost? So, do we take the $300 cost to get the book readied and published wide and add in some advertising money? If so, is it best to have a monthly advertising budget? I do all the other things relatively well, but the advertising, the letting readers know the books are out there to reach that 42 per month, that proves to be the most daunting thing. Thanks.

    • dwsmith

      Scott, you take a deep breath, put them out, ignore all the idiots about advertising and who are in a hurry to make a few bucks, and write. Let your books build. They will average over time far above the 42 per month if you do that, just write, get them out, and let it build. Tell your friends, put it on your web site, that sort of thing, but just let it build naturally. It will happen if you keep working on being a better storyteller at the same time.

      • Missy

        This was interesting to read until I got to the indie author section. I’m an indie with a completed series of 5 Epic YA fantasy books, published over 5 years (About 450 pages average per book). Everyone I know knows about them. Book 1 ranks about 100k overall consistently on Amazon. I put a lot of stock in the let-it-build mentality, and I advertise regularly through AMS, book barbarian, etc. I have never sold 42 books in a month. I have never been able to land a bookbub, even though book 1 has over 100 4-5 star reviews. So, take it with a grain of salt. I’ve been loyal to KDP select since I started, but I’m releasing my next book wide. Hopefully that will help with sales throughout the series. I consider myself successful because of what I have accomplished, even if my sales don’t come close to what’s listed above as “coffee money”. But I’m in it for the joy of writing, and not so much for the $$, so maybe that’s the real difference.

        • dwsmith

          Missy, only five books and in Select are your problems, plus one book a year in this modern world builds up no reader royalty. Thus the low sales. Just keep writing and let them build and get them out of that graveyard of Kindle Select and get the wide.

  • Kristi N.

    *blink* Writing at pulp speed one for one year, the “coffee money” would exceed my monthly take home pay from the day job after 25 years in the field. Dean, on another subject, any chance of a lecture on the business end of managing series? I hear some people say it’s best to power through and end one series before you start another, and others who write in whichever series they want whenever. Is there a sweet spot for bringing out x books in a series per year to keep it active? Or is it more of a finesse thing that comes from experience?

    • dwsmith

      Oh, hell, Kristi, anyone says they know the answer to that is full of crap. And you should never be making the decision on what to write with marketing in mind. Write what you want, when you want.

      Kris has seven or eight series, all still going, and she adds onto them when she feels like writing something in that series. I have the same number, never know what I am going to write, and why would I wrap anything up? All my books stand alone. But are still in series.

      So your thinking is wrong. Write what you want, ignore marketing.

      • Kristi N.

        Never have I been so glad to be wrong. (Big sigh of relief.) I’ve been pushing slowly up the grade to Pulp Speed One, and this last time I finished a book and asked myself “Where do you want to go next?” It felt better than the fretting of looking back at some series and thinking I should write another book there because it had been a while. And the subconscious didn’t want to, so I haven’t. Thank you!

      • Kate Pavelle

        I had been trying to “wrap up a series” on a schedule and failed forward, i.e. I have 6 books out, but not the 9 originally planned. I was even planning to kill off a character to get rid of a book, but then my designer made me a cover so heart-wrenching, it sparked ideas and now he just might live.
        EXCEPT, I’m not writing the series now. I’m writing other stuff.
        Last Spring in Vegas, we had one of those workshop lunches and this issue of series and burnout came up. Dean told me to write whatever I want and not worry about it. True words, that. Doing that Great Challenge of one story a week got me out of my funk. Some of the stories are tie-ins to one of my series, some are stand-alones, but there is no pressure other than finishing one a week. I get to write whatever I want for the first time since I started writing fan fiction! It’s actually fun, lots of fun.
        After a hiatus of many months, I feel I’ll be finishing a Book 7 before the year is out, but only if I feel like it 🙂 Thanks, Dean. Burnout management is a thing, and it has a lot to do with how hard it sometimes is to separate Writing Brain from Business Brain.

        • dwsmith

          Well done, Kate, giving your creative brain permission to go play. Amazing how burnout doesn’t happen when you are not forcing things.

  • Glen Sprigg

    This is unrelated to the math topic (which I totally get; indie all the way!), and I haven’t gotten through the entirety of your archives (OCD is my special friend), so I wasn’t sure if this has been talked about before. If it has been, just let me know roughly when it was posted and I’ll go back and find it myself.

    What is a first reader, exactly? Is it someone you hire to read the story first, someone who does pre-copyediting, or what? I’ve seen the term on several posts, but it’s only defined by inference in the posts I’ve read. How important is a first reader, as opposed to just having a copyeditor?

    • dwsmith

      First readers are usually just a spouse or friend who reads it for reader sake. Meaning if they like it, find a few typos, that sort of thing. A copyeditor finds typos, nothing more. But they are good at it, supposedly. They don’t rewrite you, just find typos. First reader is someone you trust to read the story. Often for no reason. Copyeditors are needed to fix typos that you miss.

  • allynh

    Sadly, ten years from now, you will be making the same post because people will still be enamored by the concept of being published by Trad publishers.

  • Cora

    It’s simple, straightforward, grade-school math. It’s not rocket science. Why don’t people listen to you? What possible nefarious agenda could you have?

    Sadly, I found the article and it appeared she was looking for everyone around her to look after her interests. You need to take responsibility for your own career. I’ve always known that (read carefully every contract I’ve ever signed) but you really brought that home to me as well Dean. So thanks.

  • Teri Babcock

    What strikes me is that people are already earning that same kind of money just writing short fiction. Interesting because writers who want to go trad always seem to think short fiction is a dead end.

    • dwsmith

      Thought I made that clear. I was assuming, that since indie authors have to learn business, they would also learn how to deal with taxes, and for writers who understand taxes, we pay very little, all legally. Traditional writers have no clue about business, so would just pay the tax and never bother to learn how to use money correctly. That is why I didn’t use taxes in indie authors.

      • JH

        I understand your reasoning, but you are also stating that “regular authors make 61′ over 20 years” vs “indie authors making 98′ over the same 20 years”, but the figure for the indie authors should be closer to 58′ IF you use the same tax percentage.
        You also do state “minimum 98′”, so this should give “minimum 58′” for the tax-paying indie authors.
        Then both you and I know there are a lot of legal ways to minimize the amount of tax you have to pay, but that is a little bit beside the point (or a separate point in the same argument).

        I am still in favour of publishing independently, but a lot of the people reading your advice are the same people being frightened by the “it is so expensive to publish independently” information out there.
        We do not help the indie authors by giving a too positive slant on indie publishing either.

        • dwsmith

          JH, if you are paying taxes as an indie author, you are doing a ton of things wrong in business. Sorry, truth. So why would I assume authors, indie authors are going to be stupid????

          Traditional authors it is built into the equation because they sign the contracts that give away all copyright, all ownership, and all control. And they hire agents who they give all their money to and all the paperwork without even bothering to do a background check. So being stupid goes with the territory. But I refuse to believe that indie authors who are smarter in business can’t learn taxes and not give away a third of their money or more.

          So I stand by what I said. If you are paying taxes to governments on your income as an indie author, you are doing a ton of things wrong. Get learning and save the money.

          • Sean

            Dean, this statement:

            “…if you are paying taxes as an indie author, you are doing a ton of things wrong in business.”

            …is obviously hugely of interest to anyone getting started in the business. Can you point us towards a resource you recommend (for U.S. authors) who are just starting out and want to set up our business correctly for this?

            I’m sure it’s not simple, but most of us are happy to spend both time and money on anything that’s a good return.

            And if there’s a resource you or Kris or WMG has created on this topic, feel free to plug it!

            If the advice is basically just “hire a good tax attorney” that’s perfectly fair too, but some guidelines on what to look for would be greatly appreciated.

            Thanks for taking the time to put this info out and have this discussion!

          • dwsmith

            Learning business, taxes, and corporations is one of the best returns a writer can get at any point in their career, from getting refunds early on because of business expenses allowing you to get some of your day-job taxes back to later on making sure you legally pay as few taxes as possible.

            NoLo Press has a few good books on business deductions. I just did a business Pop-Up that has some basics. We have some business lectures as well. And there has to be a zillion books on running small businesses.

            So just about everywhere.

        • Loyd Jenkins

          To piggy back on Dean’s answer, when I say I make XX a year, that is before taxes. If you are going to bring up taxes on one, do it for both.

          Also, while the tax rate is higher, so are the write offs. You have to learn to be a business owner. Like Dean says. *wink*

  • DeAnna

    Thank you for this post! It’s super-informative. I’m curious about the $300 cost per indie book, though. Does that include editing and cover art?

    • dwsmith

      DeAnna, a number of posts back I did costs. Basically it assumes a copyedit (about $250 for a normal novel from someone from your library or local college), a dollar to ten dollars for a piece of art, and you have spent the time to learn how to do your own covers. The rest was the price of the top programs like InDesign and Vellum per book.

  • Bob Mayer

    I don’t believe one gives up copyright in a trad deal. Copyright is always in an author’s name unless one has encountered a shady deal. At least all the trad deals I did, I kept the copyright. We give up rights. There is a slight possibility, depending on how the contract is written, that those rights might revert, although thresholds have gotten ridiculously low, especially given ebooks. I view a trad deal as essentially signing the book away to a publisher forever. And unless the career heads upward (rare) having the utter frustration of watching that published do nothing with the book while not reverting.

    However, while I agree with the math, there is a flaw. It’s assuming that a newbie, indie author can generate those kinds of numbers with a first title and subsequent. Which is almost unheard of. The publisher does actually print books and put them in stores. At that advance level its possible the publisher might have tossed out some co-op money which is essentially the only money worth it for publicity from a publisher, although I’ve gotten similar advances and received zilch.

    Honestly, these days, I think a newbie author, unless they are the world’s greatest marketing guru, would be better off trying to get an agent and get trad published, while at the same time busting ass to write more books and go hybrid as fast as possible. The market is simply too saturated to stand out as a new indie. The reality is any trad author who is midlist had better be hybrid right now or else they stand to have an abrupt, rude awakening, especially if B&N goes the way of other bookstore chains, despite the new ownership.

    I think Chuck Wendig had a pretty good take on the article. My problem with it is she acts like she gambled the money away. She lived on that money. What she did was make poor choices on how to spend it and, most importantly, pissed away her time, which is our most important asset.

    She also mentions her awards once too many. We used to joke among the faculty at Maui that they give awards to literary writers and checks to genre writers.

    • dwsmith

      Bob, wow, when was the last time you saw a traditional publishing contract offered to a standard writer. I see them all the time because writers send them to me and Kris and the contracts flat buy all rights for the life of the copyright. It does not say “all rights” but if you understand contracts, that is the upshot. And sure, in legal nitpicking, you are the author still, but you have contracted away all the use of the book. And as you said, they will do nothing with it after the book has “spoiled” in the publisher’s mind. But the publisher must retain it for IP reasons on spreadsheets.

      Bob, why are you pushing the myth of indie authors can’t get in stores???? I am sure you know better. Any indie author can get books into any store any traditional publisher, or mid-sized publisher can get into. It is not magic fairy dust. I was just in B&N and there were numbers of smaller indie presses in there. I have no idea why, since it is not cost effective, a money-losing operation. I could easily get WMG books into stores and B&N and other chains, but why the hell would I spend that kind of time and money to get into the channels?? Or spend the vast amount of money it takes to advertise to bookstore buyers. It is possible, completely, just not worth indie publisher’s time and energy. This is 2019, after all, not 1990.

      And I let your comment through with that horrid advice to get an agent and publisher because of who you are. You are telling beginning writers to not bother to learn the business, but instead go get scammed by agents who they do not know. Holy shit, Bob, I am disappointed. I really thought you were a champion of writers, not someone who sends them into scams to waste years of writing.

      And saturated? Yup, takes a writer to learn craft better to stand out. Write better stories. Oh, no, a writer has to work at their trade. Wow, what a horse-shit excuse to do nothing.

      So a new writer writes one book, spends a year trying to find an agent, gets scary lucky finding an agent, spends another year rewriting it for the stupid agent, then another year selling it. And say they get lucky and actually sell it for a six-figure deal. More years go by.

      In four years that traditional writer will have written maybe two books, maybe. And has an agent who will steal from them and a publisher who will drop them. Yeah, good advice, Bob. (snort)

      A slow indie writer would be on book sixteen in the same amount of time and making money.

      Bob, what happened to you? Have you not been following the new world?

  • Stefon Mears

    Why, Dean, how kind of you to assume both trad books come out, when you know full well that if trad book one sells below “expectations,” author gets dropped and will be lucky to see any payments at all for book two…

    • dwsmith

      Oh, yeah, you are right, I was being nice. But shhh!!! Traditional authors don’t want to hear that even though they have a six-figure two-book contract, the second book might be cancelled. “That’s just not possible!!” Luckily the woman in the article that started all this wasn’t told that possibility. (grin)

  • allynh

    Oh, that’s odd. Now that there is a better hint about who you guys are talking about I can see the background.

    When I first read the “The Math” post I went googling for some event that was going viral, book deal gone wrong, major public fiasco, etc…

    • Chris Lowry

      Here is what I like the most about this. 500 copies a year, per book. That s less than 50 a month.
      Even if a writer says they don’t know and don’t want to learn how to market, 50 books a month is a doable number. One point something sales per day over multiple channels.
      I’m not trying to downplay cover, blurb and most important, story.
      But 50 ebooks a month per title seems to be in anyone’s wheelhouse, especially if they get the writing right and find their readers who like the story.
      I like the way you break it down to highlight the long tail possibilities for sales over the 20 year span, because if a person continues to put out those 2 books per year, especially in a connected series, it can multiply the income possibilities and drive more readers into the series every time a new book is released.
      Thanks for this.