Last week I forgot to mention an excellent website on publishing children’s books: http://www.underdown.org/. It’s the website of Harold Underdown who wrote the Idiots’ Guide that I’ve praised several times.

This week we’re taking another detour into the world of publishing. Next week we’ll be back to writing.

On October 10, 2010, Jill wrote …I spotted you saying again about being able to become a full-time author. What exactly does it take to do that? Publishing a lot of books and having your name be well known? I guess I am just wondering because that has been my dream for a long time and I just don’t know how to go about doing that!

I’ll tell you my story and then talk about how writers get paid. I hope that those of you who have publishing experience will weigh in with more information and clarification. I know how my income works, but I’m not an agent and there are ins and outs that I’m unaware of. This is a huge subject, and I’ll only graze the surface.

When I quit my job, I had just turned fifty and Ella Enchanted, my first published book, had been out for six months but had not yet won the Newbery Honor. I was working for New York State government and had been for twenty-seven years. I was due to collect a small pension in five years, a pension that would have grown bigger if I’d stayed on. My husband and I met with a financial planner to see if we could make it through the hiatus. The planner thought we could, and while we were meeting, the mail arrived with an offer from my editor for a three-book contract for what became The Princess Tales. I decided to make the leap. Still, I’m security-conscious, and I was scared. A beloved friend, a free-lance technical writer as well as a writer of young-adult novels, promised to teach me technical writing if things didn’t work out. That gave me an added comfort level.

Two months after I quit, Ella Enchanted won the Newbery Honor, and I felt even more at ease. No matter what happened, income from Ella would supplement my pension.

People have given up their jobs to write with a lot less in the way of resources than I had. Obviously the decision depends on your responsibilities and your tolerance for uncertain income. All worked out well for me. Sometimes I wish I hadn’t stuck so long with my government job, which I loved at the beginning but enjoyed less later on. Even before I began to write I might have had a more interesting career if I’d taken more chances. Still I am that security-conscious person and in spite of the advantage of hindsight, I might not have acted differently.

That’s how I did it. Now here’s an overview of a book writer’s income today. The industry is changing quickly, so some of what I say may be different in a few years.

When an agent takes you on, you usually sign an agreement that spells out your relationship, particularly how to terminate your association and her percentage of your writing earnings. If you do separate later on, she will continue to receive that percentage on those books for which she negotiated the contract. If royalties go on for decades after termination, she’ll keep getting paid for decades. That’s the deal, standard across publishing. Even if you don’t sign an agreement and just move forward on a handshake (as I did), the rules still apply.

When a publisher buys your book (Hooray!), it doesn’t buy your words in every circumstance forever, unless the deal is a “work for hire.” More about that later. The publisher buys specific rights, maybe the right to publish the book in English around the world or only in North America. Which rights it buys are part of the contract negotiation. The rights that you retain you can sell elsewhere. Which rights you reserve often depend on your agent and her agency. If the agency has a foreign-rights division or a film division, for example, you may retain those rights so the agency can market them and you will get a higher percentage of the earnings. This seems like a definite benefit – but the publisher may be better than the agent at selling foreign rights, for instance, and more sales means more money. You never know; you just have to choose.

If the deal is a work for hire, the publisher does buy your words forever in all situations. You don’t own the copyright; the publisher does. Usually you get paid and that’s it. This is perfectly legal. It’s all spelled out in the contract.

That’s all I’m going to say about work-for-hire contracts because I have limited experience with them. My Never Land fairy books are a hybrid form of work for hire.

In other contracts, not work for hire, the first money you get is the advance, which may come in stages, a portion when you sign the contract, another when the editor accepts your revision, and the last on publication. The size of the advance varies widely. For a first book it may be only a few thousand dollars. In some circumstances there may be no advance, only royalties.

There may be a clause that says that if the book wins an award like the Newbery or the National Book Award you will get an additional advance.

The advance, alas, is not a gift. You have to earn it back out of your royalties, so onto royalties, which are the percentages you receive for the sale of each book. For Ella Enchanted my royalty for hardcover books sold “through ordinary channels of trade,” which means bookstores and online retailers, was 10% of the retail price on the first 20,000 copies sold and 12.5% on copies after that. For paperbacks it was 6% on the first 250,000 copies and 8% after that. There are other royalty rates for other situations, but the ones I just named are the biggies. Your percentages will improve as your career grows, but the publisher will always receive the lion’s share. (A mega writing star may be an exception. I have no idea what percentage J.K. Rowling commands.)

(I’m omitting e-books, because they’re in flux at the present.)

If you have an agent, the publisher sends your royalty check to her. She takes her cut and then passes the balance on to you. I believe standard agent rates are 15%, but some agents’ rates may be higher or lower.

Royalties are paid twice a year, usually in October and April, which means no weekly paycheck, and you won’t get anything until the publisher recovers your advance. Plus, you can’t anticipate how much the royalty check will be because you don’t know how sales are doing. Your editor may be willing to give you an idea of how your book is faring, but you won’t know numbers until the royalty statement arrives. Sales are affected by factors way out of an author’s control, like the economy or school and library budgets or demographics (there’s a population boom or bust in the age range your book is meant for).

Your U.S. book sale may not be your only source of income, however. There may be sales of subsidiary rights. If, for example, a book club wants to publish an edition of your book, you’ll split the revenue from that with your hardcover publisher. I don’t know how it works if your publisher has its own book club. If your agent sells an audio version, you’ll get an advance for it (probably smaller than the book advance) and royalties. Likewise for foreign sales.

If your book is optioned for a movie, you’ll be paid for the option, usually a small sum. If the movie is made, you’ll be paid a lot more, and you’ll probably have a very good year financially.

Your head is swimming. Your eyes are rolling back in their sockets. Basically, your book revenue comes twice a year plus advances, which aren’t tied to the calendar.

If your book does well online and in the book stores, those other sales (audio, foreign, book club, and more) are likely to follow. If not, generally not. It can be scary.  But an editor who loves your writing will fight for your future books. A publisher that believes in you will stay with you for a few books even if sales are disappointing in hopes that your work will catch on.

Two more sources of income for kids’ book writers are speaking at conferences and visiting schools, both of which will pay you an honorarium. These are worth pursuing not only for the money, but also because they’ll boost your sales and build your readership. I haven’t done this, but I believe you can make proposals to some teacher-and-librarian conferences and to writers’ conferences for sessions on subjects you’re qualified to lecture about (topics concerning writing, books, teaching, literacy). When you start doing school visits you won’t be able to charge much, but as you gain experience you can raise your rate. For some authors speaking engagements, especially school visits, are the biggest source of their income. You have to be on the road a great deal, but, boy, you learn geography!

You don’t have to pay your literary agent any part of the honorarium, but if you use a booking agent, you’ll have to pay him a percentage. I don’t use one, so I don’t know what the going rate is. For beginners, I’d guess that a booking agent may be worthwhile, because he’ll know about speaking engagements that you won’t and he’ll send some your way. Your publisher will also have a school and library person who may be able to offer you some opportunities, and you don’t have to pay this person. If you’d like to visit schools and speak at conferences, be sure to let your editor know. Publishers are happy if you’re willing to get out to promote your books.

If your writing career goes very well, you’ll be able to tell when you’re ready to shift over to full-time writing. Many writers never can, and there’s no shame in writing part-time and supplementing other earnings with writing income. Luck plays a big part in success, and some terrific writers never get to write full time.

This may have been too much information. Here are two prompts:

•    Your main character gets a big bump in her allowance. At first she thinks this is all good, but she doesn’t handle the new status quo well. Maybe she has a brother who hasn’t gotten any more. Maybe she now receives more than her friends. Maybe she suspects her parents’ motive for the increase. Or anything else. Make trouble. Write the scene.

•    Two characters have gone trick or treating, separately or together, doesn’t matter. Doesn’t matter if they know each other.  They each go home after collecting more goodies than ever before. Write a scene for each, showing how they deal with their candy wealth. Create internal and external conflict, different for each.

Have fun, and save what you write!