Before the internet, traditional publishing a book was the main way to get your book out into the world. Today, many aspiring authors have decided to bypass the gate keepers and go the self-publishing route.
Traditional publishing means that your book is published by an established publishing house. The largest publishers are the “Big 4” publishers: Penguin Random House, Hachette Livre, HarperCollins, Macmillan Publishers, and Simon & Schuster (acquired by PRH in 2020). However, there are about 15 more reputable publishers today.
By going the traditional publishing route, you will have a team of professionals take care of the book design, sales, marketing, editing, ghostwriting (optional), and various other processes of the publishing world.
There are lots of cooks in the traditional publishing kitchen. But the meal has a higher chance of tasting good in the end. Then again, how many big budget movies have you seen that were absolute bombs?
The other alternative is self-publishing. This requires you to do everything yourself. If not, you have to recruit people to help you create the book, market the book, and then sell the book.
Due to huge platforms like Amazon and Createspace, it is easier to distribute a book than ever before. However, selling a book is also more competitive than ever before. If you don’t sell your book on your own platform, you also cannot control the price.
My Experience With Traditional Publishing & Self-Publishing
I have never traditionally published a book. The first reason why is because I stopped trying in 2011. For one year, I pitched a book idea to a dozen literary agents with no luck.
To get a book deal, it usually takes signing with a literary agent first. The agent then pitches your book to established publishing companies. Literary agents often have connections that can help open doors. A literary agent also generally earns 15% from your book advance.
Not one to take “no” for an answer, I decided to self-publish my book on Financial Samurai a year later in 2012. The book is called, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye.
My wife, father, and I did everything from writing and editing the book, to designing the cover, to registering the book with the Library of Congress. It took a tremendous amount of self-motivation and effort!
Today, my self-published book generates between $40,000 – $50,000 a year in passive income. The book gets updated every couple of years.
If I had the discipline, I would have published at least two more books in a broader niche since 2012. However, self-publishing a 200-page book takes a gargantuan effort I was not ready to take up again.
A Traditional Publishing Opportunity Presents Itself
10 years later, I finally have an opportunity to traditionally publish a book. Noah, an acquisitions editor from Portfolio Books, an imprint of Penguin Random House reached out with an enticing proposal.
An imprint is a publishing arm within a publishing organization. The imprint, Portfolio Books, focuses on the non-fiction genre and has authors such as Simon Sinek, Cal Newport, Seth Godin, Sophia Amoruso, Scott Galloway, Emily Chang, and General Stanley McChrystal.
Given I couldn’t even get a literary agent to try and pitch a proposal to a publishing house, this turn of events is quite a surprise. Perhaps gutting things out long enough really does bring about unforeseen opportunities. I’m honored Portfolio Books would even consider me.
Given I’ve got a decision to make, let’s go through the pros and cons of traditional publishing. I hope my thought process will help you if you find yourself facing the same dilemma as well.
Main Benefits Of Traditional Publishing
1) You have a team of experienced professionals helping you.
Similar to trying to get a PhD, many people quit or take forever to finish a book. Even if they finish a book, it may not be very good. One of the benefits of traditional publishing is the support network.
A great team draws upon their experience to help increase your book’s chances of becoming a success. Perhaps you get to network with fellow imprint authors as well.
2) You may gain more respect.
Publishing a book with a major publishing house may boost your reputation. Suddenly, you gain a little more status and prestige as a published author.
As a published author, you might get opportunities to speak at conferences when they come back. You might even get invited to fancy soirees at a billionaire’s home as a featured guest. TV studios might want to interview you too.
As a result, your network will grow if you take advantage of new opportunities. It becomes a virtuous cycle.
3) You make your loved ones proud.
Is there anything better than making the people you care about proud? Your parents may be thrilled to receive a signed copy of your book. They may brag to their friends about how their son or daughter is a published author. This will give them a sense of pride.
If you have children, your children can show off your book in English class. They might even ask you to come in to speak to their classmates. To make your parents and children proud might very well be the greatest feeling ever.
4) You will make some money.
The publisher will cover all upfront costs and typically pay you a book advance. If you earn out your advance through enough book sales, you will also earn royalty payments.
If your book becomes an unlikely international bestseller, you could earn millions of dollars a year. Your book will also likely turn into a TV series or movie if it ever becomes that popular.
5) Your children might benefit.
Being a published author may help your children get into competitive private grade school or college. It’s a stretch, but a possibility.
Private schools aren’t just looking for rich families to donate lots of money. Private schools are also looking for families with diverse backgrounds in the arts.
After all, a school’s main purpose is to teach various subjects. If you write a book that teaches something, you are already a part of the family of teachers. Having a parent as a published author is an asset to the school community.
If you subscribe to the Legacy retirement philosophy, a traditionally published book is in alignment, especially if it is a helpful one.
6) You gain a sense of accomplishment.
Creating a new product from start to finish is an extremely rewarding experience. The harder the project, the greater the satisfaction once complete. Once you publish a book, nobody can ever take the accomplishment away.
In Maslow’s Hierarchy Of Needs, self-actualization (including creative activities) is at the top of the pyramid. If you are a serious writer, perhaps traditionally publishing a book might provide the greatest joy.
The feeling might be akin to an athlete training all his life to finally qualify for the Olympics. Even if the athlete can’t place on the podium, just getting to compete is the greatest feeling. Just don’t get a silver medal. I hear that’s quite tormenting!
7) You get to help more people.
Perhaps the biggest benefit of traditionally publishing a book is getting to help more people. Traditional publishing offers another way to reach more people beyond a blog, a podcast, radio, Youtube, or TV.
Books can make us laugh when we are in a dark place. Books can also provide us with the knowledge and confidence to achieve our goals. To maximize a book’s impact, authors should explore every avenue of distribution, including traditional publishing.
How Much Can You Make Traditionally Publishing A Book?
Given Financial Samurai is a personal finance site, let’s discuss how much an author can make traditionally publishing a book.
There’s a reason why the stereotype “starving writer” exists. It’s hard to make a lot of money publishing a book. People in the arts know it’s tough to make money doing anything creative, which is one of the reasons why there is a tight community.
I hardly made any money on Financial Samurai for the first couple of years. Thankfully, I had a full-time job to pay the bills. You really need to love to write if you want to be a professional writer.
That said, like any venture, the money-making potential is unlimited if you create a great product and market it brilliantly.
The Book Advance
Most traditional authors earn a book advance. An advance is a signing bonus that’s negotiated and paid to the author before the book is published.
A book advance is paid against future royalty earnings. This means that for every dollar you receive in an advance, you must earn a dollar from book sales before you start receiving any additional royalty payments.
The average book advance for a first-time author is less than $20,000. Some literary agents peg the number closer to $10,000. $10,000 – $20,000 for a first-time author doesn’t sound too shabby, if you can get it all up front. But that’s usually not the case.
A book advance is often paid in two, three, or even four equal installments. In other words, you might only get 1/3rd of your book advance upon signing, 1/3rd after submitting a final draft, and 1/3rd after the book is published 1-2 years later.
In the example of a $20,000 book deal paid in thirds, expect to receive $6,667 for each installment before tax. At $6,667 an installment, you would need to get three book deals a year just to be at the Federal Poverty Level Limit for 2021!
Therefore, you may want to negotiate as high of a book advance as possible. However, there are consequences for going too high as I will discuss below.
In addition to earning a book advance, there are royalty payments an author might earn as well. An author earns royalties, a minority percentage of book sales, after enough copies are sold to cover the book advance. You probably think that an author will surely make a lot of money on the back end, but you would be wrong.
Unfortunately, roughly 70% of traditionally published books don’t sell enough copies to cover the author’s book advance. In other words, 70% of the time, the book advance is the most an author will ever earn from his or her book.
Let’s say your book sells 15,000 copies in one year, enough to make it on many bestseller lists. You negotiate a book advance of $60,000 and royalty payment for each book of $2.
You would only start receiving a royalty of $2/book after you sell 30,000 books ($60,000 / $2). Therefore, you won’t receive royalties until the second year, at the earliest since you “only” sold 15,000 copies the first year.
The downside to receiving a high book advance is that if the book doesn’t sell sufficient copies to justify the advance, the publisher may be reluctant to give you a second book deal. If you are like most savvy wealth-builders, your goal as an author is to continue getting book deals for as long as possible.
The upside of receiving an advance is that it’s guaranteed. So long as you follow your contract’s guidelines, even if your book doesn’t sell enough to earn back the advance, you don’t have to return the balance to the publisher.
A Book Publisher Is Like A Venture Capitalist
A book publisher is like an investor. Some of its investments are in early-stage startups (first-time authors). Some of its investments are in Series C or later round private companies (up-and-coming authors). Meanwhile, some of its investments are in mature companies (established authors with a platform).
A publisher knows most of its book deals will break even or lose money. But the books that hit will hit it big and contribute to the majority of its profits.
Take a look at this chart that highlights how much some of the most popular writers made between June 2017 and June 2018. Some big money is at stake!
And interestingly, all of the authors come from similar backgrounds. Therefore, if a book publisher doesn’t care about diversity and is just focused on profits, there is an archetype author to pursue.
How Hard Is It To Get A Book Deal?
Supposedly, only around 1% of writers who submit manuscripts get book deals. In a more focused survey, roughly 25% of professional writers who submitted manuscript got published. Then there’s one story of a woman who has spent 10 years trying to get a book deal.
To sign a book deal with a traditional publisher, you often first need to get a literary agent. The literary agent might only select a handful of manuscripts out of hundreds viewed. Then, the literary agent has to try and sell your manuscript to a publishing house, which also sees hundreds, if not thousands of pitches.
Despite the difficulty of getting a book deal, the 1% figure seems way too low. Around 300,000 books are traditionally published each year in America alone. Therefore, it’s hard to imagine 30 million manuscripts being written and pitched each year in this country.
If you want to traditionally publish a book, you certainly have a chance! I will estimate the odds of getting published is closer to 10% – 25% if you are serious about becoming an author.
Conversely, you have a 100% chance of self-publishing your book if you really want to.
The Downsides Of Traditional Publishing
Now that I’ve shared with you the positives of traditionally publishing a book, let’s look at the downsides.
1) Time and effort.
Too bad creating something great doesn’t usually come easy. Despite having a team to help you get your book created, you still have to spend hours and hours writing and revising the book.
If you are a parent with a couple young kids to care for during a pandemic, your time might already be stretched too thin. Every minute you spend writing your book is one less minute spent on doing something else. Always consider your opportunity cost when writing a book.
2) You may lose creative control.
Having many cooks in the kitchen might mean that you can’t write exactly what you want. One of the reasons why blogging is so fun is because I don’t have an editor. I can write what I want, whenever I want.
In a way, a traditional author is like being an executive at a firm who still has a boss. While being a blogger is like being an early retiree with absolute freedom.
3) You may sell yourself short.
Depending on how you, your literary agent, or your lawyer negotiate your contract, you may sell yourself short. There are TV options, international translation rights, book club rights to consider.
If your book ends up taking off, you may not gain as much as you think due to poor negotiations. The book advance and royalty percentage is just one part of a book deal.
You’ve also got to weigh the potential opportunity cost of not self-publishing. For example, if I traditionally published my severance negotiation book in 2012, I would not have received between $20,000 – $50,000 a year in passive income from the book since.
As long as I continue to update my severance negotiation book and keep Financial Samurai running, the self-published book should continue to generate at least $30,000 a year.
4) The book might be a flop.
Even with all the help and support from a traditional publisher, your book still might not be any good. As a result, instead of feeling proud of your book, you might feel embarrassed.
Happiness is about meeting or beating expectations. If you are satisfied with just having your book published by a traditional publisher, then you will be most content. If you won’t be satisfied until your book becomes a NYT Bestseller, then you may be setting yourself up for disappointment.
To Traditionally Publish A Book Or Not?
Now that I’ve shared with you the pros and cons of traditional publishing, I’ve got a decision to make. Do I accept the offer from Portfolio Books, a Penguin Random House imprint, or do I continue doing my own thing?
On the one hand, it would be helpful to go through the entire experience of traditionally publishing a book. I could then help other readers navigate the traditional publishing maze through subsequent posts. It would also be fun to bring readers on this journey and help create this book together with your input!
I’m also driven to make my parents and my children proud. I never had much encouragement growing up. It’s a cultural thing where bringing home a 95% test score in an Asian household meant being asked, “What happened to the other 5%?”
If I can traditionally publish a book, perhaps I might inspire my children to do hard things as well. One of the worries jobless FIRE parents have is demotivating their children due to a lack of work. Once the book is published, I can always point to my book if my children ever think I’m slacking off too much!
On the other hand, mainly thanks to the pandemic, I’m tired as hell. Earning money from a traditional book is nice. I did say my plan is to make as much money as comfortably possible before I re-retire by 2022. However, writing a book can be very uncomfortable.
My family should have enough to live a good lifestyle already thanks to our passive income and online income. With our almost 4-year-old not going to preschool until August 2021, at the earliest, we’ve got our hands full take care of him and a 14-month-old.
A Longshot To Glory
As someone who is not a public figure, who doesn’t enjoy the limelight, and who doesn’t work at a large media company, the odds are heavily stacked against us to write a bestseller.
In comparison, I have one friend who works at one of the largest media companies in the world. Not only is he a great writer, but he can also write an instant bestseller partly because he can utilize his huge platform that was founded in 1851. He also has colleagues and friends at similar platforms who can help promote his work.
We’ve got none of that folks!
We’re like first-generation immigrants with no connections, battling against the odds. All we’ve got is our grit to try and make a name for ourselves one day. Then maybe, we can earn enough to provide for our families in this cruel and inequitable world.
Perhaps just getting a book deal from a Big 5 publisher is good enough for the soul. It’s kind of like getting an acceptance letter from a target university and then not going due to cost. But then again, we might always wonder what if…
What would you do? If you are a traditionally published author I’d love to hear your thoughts about the process. What would you have done differently? What other tips do you have for aspiring authors who want to go the traditional publishing route?
Regardless of the outcome, I want to thank Noah, Niki, and Adrian from Portfolio Books for believing in me. Not many have in the past, which is why I really appreciate it!