P&Ls and how books make (or don't) money

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Profit & Loss/Profitability & Liability: How Books Make (or Don't Make!) Money

A basic outline of what happens when an editor buys a book and wants to publish it. This is very much a basic look at publishing and publishing finance, with some explanation of terms commonly used by the marketing and sales departments.

Comments

Re: On Editor Compensation

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The answers all depend on which publishing company one works for and how profitable the book is.

In general, if an editor has profitable books, that editor will see the profits reflected in the P&L done for the editor at the end of the year by the finance department. It shows the profitablity of all the editor's books, and adds them all together to show the editor how much money the company spent on that editor's books, and how much money the books made for the company. If you make the company money, you generally will get a good performance review and a raise of some kind.

Editors are not "entitled" to anything like a bonus -- i.e., most of us do not have it written into our "contract" with the publisher that we get bonuses when books we edit do well.

Some editors might. Most editors are just hired and fired and given performance reviews, and sometimes get a couple thousand dollars in bonus for books that do well. That's not often, though.

I think I read somewhere that the kid who acquired The DaVinci Code got a $2000 bonus.

...and, IMO, the biggest disincentive to an editor for choosing unprofitable books is that every single book builds an editor's reputation -- every single successful book builds a good reputation, and the unsuccessful ones build a bad reputation, and an editor with a good reputation has a lot more freedom, and can actually use the good reputation to get more house support for his/her books.

Re: On Editor Compensation

[(Anonymous)]

Thanks so much. I appreciate the information. :)