I just went back and read through the comments on Charlie Stross’ writers life post and found this gem by S.M. Stirling. I’ve quoted the whole thing, but I encourage you to read all the comments on the thread. They are funny, enlightening, and inspirational – and that’s just about all the other quotes by Stirling, everyone else had amazing things to add too. 😉
The economics of book publishing are tricky. Costs per copy go down tremendously as copies sold increase.
Now that it’s so much cheaper to reprint than it used to be (typesetting costs have plunged) this is even more true than it used to be, since you can respond quickly to reorders and don’t need to do as big an initial run, so there’s less risk of being stuck with a mass of unsold books.
After a certain point, it’s all gravy.
If a book sells 2500 copies, the publisher is barely breaking even, if that. That’s about $67,000 in receipts for a hardcover; subtract fixed overhead like editorial salaries, distribution costs, typesetting and printing costs, the cost of the cover art, the miserable $5000 or so they paid the poor schmuck who wrote it, and there’s not much left.
If it sells 30,000 copies, gross receipts suddenly go up to well over $800,000 but costs are up only modestly from the ones for the 2500 copy book. The author’s cut is now at the six-figure level and the publisher ain’t hurting either.
You become one of their major profit centers. At this point, they discover that they loved you all along; your calls are returned, you get consulted about the cover, they send you on expensive tours, the dinner your editor takes you to is suddenly $250-per-head even before they pop that bottle of Brut Champagne de la Grande Dame, and they start spending advertising money.
Oh, and they get anxious about you defecting to another house, scramble to lock you into multi-book contracts, and they put your advances up without even being asked.
And that’s at a mere 30K copies sold, about 35,000 shipped if you’ve got good sell-through.
Robert Jordan, by way of contrast, averages around 300,000 copies.