How do advances and royalties work?

How do advances and royalties work?

The way publishing contracts work is that you're paid in advance and the advance is money that is non-refundable. Unlike the music business, there are no marketing costs attached to it. The advance is money that is in your pocket, as long as you deliver the book that you are promised to deliver, if you haven't completed the book. You are paid £10,000, for example, and then you are given some royalties. The royalties are on the books sold. If you get 10% of a £10 book, that's £1 per book and you've been paid a £10,000 advance. You have to earn out £10,000 to break even. Once those 10,000 books at £1 each have earned out, every single book you sell from that point on will go to you at 10%. That is how royalties work in publishing. An advance is just an advance against future royalties.