Revenue Streams For Authors - Earn Income In Multiple Ways
Learn about the different sources of income authors use to build their careers.
I feel like, at this point, it’s relatively obvious to say that most authors aren’t just authors. They’re also public speakers and bloggers and teachers and freelancers and all kinds of things. But why? Wouldn’t it make more sense not to divide your focus like that? What’s the point of giving a ton of things less attention - doesn’t that affect the quality of your writing?
Actually, it’s quite the opposite. Most authors benefit amazingly from having multiple revenue streams that they draw from. Here’s why you might consider picking up a few more ways of making money alongside your books.
Why have multiple revenue streams?
To put it as bluntly as possible: it’s extremely difficult to survive on book royalties alone unless you happen to be very, very lucky. (Or have a massive backlist, built a loyal fanbase, and have savvy marketing skills. And that sort of business takes years to build.) Royalties are a volatile income source that depends largely on market whims, the royalty percentage Amazon and other retailers take (Laterpress takes 0% of your direct sales), and contract specifications. If you’re entirely at the mercy of your book sales, then your whole life - your home, car, food budget, and more - could depend on whether or not a particular marketing strategy happens to land well with your target audience. As much as we don’t like to think about it, authors need to remember that creative careers are rarely stable and even more rarely profitable from the get-go.
Having multiple sources of revenue means you aren’t putting all of your eggs in one basket, like you are with just a single revenue stream. Each stream is a building block helping you work toward financial independence. Whether or not your book sells, you need to have a way to support yourself, and opening up other lines of income can help ensure that you actually have the ability to write without having to worry about the money behind it. This can make it significantly easier to actually be as creative as you need to be to write a book.
Types of revenue streams
Let’s take a second here to quickly define revenue streams, just so that we’re all on the same page.
A revenue stream is a method you have in place for bringing in money. It might be a particular service you provide or a good that you sell, or it might be a small suite of responsibilities that you have under one employer or client.
There are two different types of revenue streams: active and passive. An active revenue stream is one that requires you to work on it constantly, while a passive revenue stream lets you make something once and profit from it over and over again. There are a couple of options that don’t really fall under either category neatly, but we’ll get to those in a minute.
The thing about active income is that you’re limited in the number of active streams you can have by the literal time in the day that you can commit to it. Because active streams require your commitment to make money, it’s a good idea to limit yourself to only one or two at a time.
Of course, the most common source of income for a writer is a day job - meaning, a regular 9-to-5 that you work outside of your time spent writing on your next project. These jobs don’t have to be connected to writing at all; you might daylight as a real estate agent, handle IT at Microsoft, be a customer service rep, barista, insurance agent, lawyer, or any other job for which you’ve got the right qualifications. Having a day job is a good way of making sure that you have a reliable, consistent source of income to support your writing habit.
The downside of having a day job is that it cuts in significantly to your time, so you won’t be able to dedicate as much time to your writing and author business as you might like. Not only does this mean you’ll have less time to actually write your books, but it can also be especially frustrating if you’ve got a job with strict hours or limited flexibility in terms of taking time off, as it can mean you have to work around significant hurdles to commit time to author events like signings, book tours, conferences, and other sales opportunities.
If you do look for a day job while you’re writing, you might consider looking for a position with flexible hours, or even a part-time job. This will allow you to dedicate time every day to writing. Just be sure that whatever job you have gives you adequate pay for the hours you work, so that you’re not sacrificing your quality of life to write. You deserve to be paid a living wage, after all.
The alternative to a day job, or sometimes the addition to it, is doing freelance work (hey, look, that’s my job!). Freelance work is work done on a contract basis with a company; you’re hired for a limited time to do a specific job. As a freelancer, you’re not a permanent employee of any one company; instead, you can pick and choose what clients you want to work with and what services you want to offer.
The great thing about freelance work is that you can use your writing skills to do it. Good at making convincing arguments and persuasive pieces? Copywriting might be worth a try. Got an eye for details and a good sense of how a piece should sound? Editing might be a good choice. Published a few successful ebooks already and did the formatting yourself? You might offer formatting services. Consider checking out sites like Fiverr, Upwork, and Freelancer to get ideas for services you can offer and set up profiles through which to offer them.
Unfortunately, freelancing isn’t as consistent and reliable as a day job, so you’ll have to approach it as running your own business - because essentially, that’s what you’re doing. It’s easy to get bogged down and overwhelmed by the number of clients you’re serving and the paperwork that goes into it, so come up with a business plan and make sure that you’re staying on top of your time to get the most out of every contract you pick up. Freelancers need to build a customer base big enough to keep work incoming, and be on the lookout for new customers who would benefit from their services.
Public speaking and performance
A lot of authors also participate in public speaking events and performances as part of their marketing plan for their books; this counts as another revenue stream! These events can include seminars, readings, and conference spots, and usually tie in with whatever your book is about. If you’ve got a solid plan and a script ready to go, and you know you’re good in front of people, then even as a first-time speaker, you might charge as much as $1,000 for a one-day event depending on the size of the venue and the popularity of the event itself (even if the event is just you!). This type of revenue is commonly referred to as service revenue, as you have provided a service to someone (speaking) instead of selling a physical product (a book).
Of course, public speaking isn’t for everyone. It’s incredibly difficult to get up the nerve to go in front of a room full of people and speak to them, let alone read or talk about your own work. Public speaking can make a lot of people extremely uncomfortable or even terrified, which not only stresses you out but also, from a business perspective, means that your audience isn’t getting everything they need out of the performance.
Still, if you’re confident and well-rehearsed, public speaking can be a lucrative stream, especially for nonfiction writers. Take some time to research your ideal audience; almost all nonfiction niches, and many fiction ones as well, have conferences, conventions, and other events that are looking for speakers throughout the year. Once you’ve done that, you’ll want to craft a speech and pitch to the events - Scribe Media has a great guide for that here.
Sponsorship is a new revenue stream to try if you’ve already got an established audience. Basically, some companies will pay people with audiences to promote their products in blogs or social media posts. While the exact numbers for sponsorship change based on the company, the customer segments they’re using you to target, and the size of your audience, it’s a well-known fact that many modern influencers make their livings through revenue models primarily built on advertising fees brought in through corporate sponsorships.
Advertising revenue isn’t exactly stable either. For one, you’re beholden to the company in almost all aspects of whatever you post. Yes, you’re making the content, but the company paying you has to approve every aspect of it, and may request multiple revisions before they decide it’s good to go live - or they may simply decide it shouldn’t go live and withdraw the sponsorship. You’ll also need to keep up a good public image; any scandal or misinterpretation could mean the loss of your sponsorships.
To get sponsorships, you’ll want to first focus on building up your online presence. You’ll want to have enough followers on any of your social media, podcasts, YouTube, etc. to qualify for their business profiles. (For example, you need at least 1,000 followers on TikTok to have full access to its business features for influencers.) If you have a blog, you’ll want to be able to prove that you are receiving competitive traffic and consistently high hits on each post. So, keeping track of your analytics is a must.
If you don’t want to wait to be approached, you can seek out brands that suit your niche. You can reach out to brands via their press or business emails (or sometimes their influencer-specific contacts) to ask about affiliate programs and sponsorships. Some companies also have public applications you can fill out to apply.
Passive income is where you can really up your safety cushion in terms of money. Because you can basically just set it and forget it, if you take the time to create a really good passive income stream, you can benefit from it for years after it’s made available to the public, all without lifting a finger.
Books and other works
So, of course, one stream of income for authors is their books - this is considered a passive stream because, once your book is published, you’ll continue receiving royalties from sales as long as it’s in print without having to touch the book again. That doesn’t mean there isn’t work that goes into having a book out - you still have to market it! - but it does mean that you don’t have to rewrite the book for every sale. This is known as transaction-based revenue. A customer pays for your book, and you make a royalty.
You may also sell different versions of your book. Having a variety of formats - ebook, paperback, hardback, audiobook, large print, etc. - can mean tapping into a market that might otherwise be unavailable to you, which means you have more opportunities for revenue generation.
Books aren’t the only thing you can create to sell over and over again, though! Many authors put together companion pieces, workbooks, courses, merchandise, and other pieces of work that they can sell alongside their books as additional revenue streams. Courses especially are profitable for authors; creating a repeatable curriculum that you can post to places like Udemy, Teachable, or other online learning platforms is a great way to both increase the value of your book and brand and earn some extra income directly from your knowledge and experience.
Additionally, you can sell things that aren’t related to your books at all. If you’ve got an eye for design, you might open an ecommerce shop on Etsy or Redbubble and sell from there.
Affiliate income and advertising
If you’re already creating content regularly on your blog and social media (as you well should be to promote your brand as an author and build your platform) and you’ve got a pretty good following, you might be able to make some decent money by monetizing that space. You can either choose to run advertisements or make affiliate income.
Advertisements on your blog would appear either between posts, in the middle of posts, or in the sidebar of your website. You can typically run things like Google AdSense or a similar program that allows advertisers to buy that space from you on either a set budget or a pay-per-click model, depending on the popularity of your blog.
Affiliate marketing is a bit different; an affiliate is partnered with a company and provided a special link or code through which their followers can purchase from the company. When a purchase is made through that link or using that code, the affiliate gets a percentage of the profits from that sale. The exact percentage will vary from program to program, but is often quite generous (as high as 30% or more) and may include recurring payments for subscriptions.
All you have to do as an affiliate is include your link on your website or social media and promote the product to encourage sales. That being said, it’s always a good idea to disclose that you’re an affiliate - some people may feel deceived if they discover that you’re profiting from a product you promote after the fact.
Crowdfunding and subscription services
There are a few streams of income that don’t fully fit the bill of either passive or active or that somewhat fit into both categories. These are streams that require work but are also recurring or relatively consistent without you having to provide constant updates.
One example of this is crowdfunding. Crowdfunding is the process of asking your audience to fund a project before production of it begins. The goal is to ensure that creators have the resources they need to see a project to completion from the very beginning; ideally, a “backer” (someone who’s put money into the project) is guaranteed a product when the project hits its funding goal and the creator is guaranteed the resources they need to make that project happen. If you have a large audience base, you may choose to crowdfund your books to help you cover costs while writing and cover the costs of publication such as editing, formatting, design, and printing. Unsurprisingly, this is often referred to as project revenue, as you are bringing in funds for a specific project (like a complete book.)
Brandon Sanderson did this effectively with his Kickstarter campaign to fund the writing and release of four new novels in 2023 - his campaign raised more than $40,000,000 in just one month! Sanderson celebrated this successful campaign by donating much of the excess funding to more than 300 independent literary projects on Kickstarter.
You might also choose to set up a membership service or patron system, such as through Patreon. On this system, people can sign up to pay a subscription fee for exclusive perks such as member-only content, early access to and special discounts for sales and promotions, and events such as livestreams or signings. Many creators make a significant portion of their living through subscriptions, which can allow them to focus on their creative projects more effectively by dedicating a certain amount of time each month to creating these perks. Laterpress gives authors an option to create an annual author subscription, or subscriptions to specific collections of books.
Forming a business model
Having all of those different revenue streams is great, but it can also be a pain in the everything trying to track down and keep all of the paperwork for each stream on file for tax season. Because of this, you’ll want to create a business plan and establish what your business model is going to look like, adjusting it every time you add a new stream. Coming at it with a plan means that you have a set idea of how all of the streams work together.
Establishing a business plan
Before you open up any of your income streams, you’ll want to sit down and create a business plan. This means doing extensive research on what kind of business you want to establish, the people you’ll be working with and for, and exactly what it is you’ll be doing for them. You should also come up with some key performance indicators (KPIs) for yourself, so you have goals and ways to measure the success of each revenue stream.
A business plan for an author might be set up like this:
- Executive summary - an overview of your business’s name, employees (in this case, probably just you), products and/or services, and location.
- Company description - basically, your business’s resume; why are you qualified to do what you do?
- Market analysis - who is your target audience and who is your ideal client? What problem or problems are you solving with your product/service?
- Legal structure - this is where you decide if you’re a Sole Proprietorship or LLC.
- Service outline - this is where you describe each of your income streams in detail and how much of your income you’d ideally like to make from each one.
You can find more information about setting up a business plan on the US Small Business Administration website. When you first start, all of the numbers you put into your plan - expected income from each stream, percentage income, etc. - will be estimates. Be sure to come back to your plan as you build your business up and review those estimates to make sure they’re as accurate as possible.
Having a business plan means that you’ve got a reference and a set of goals for your business, which makes it easier to grow and earn more as you go. Speaking of…
It takes time to build a business
It’s important to realize that, in all reality, you probably won’t have your income split up exactly how you want it to be right from the very beginning. You may want the majority of your money to come from book sales, but if your book is new or your platform is still relatively small, then it probably won’t be your top breadwinner. Instead, most of your income might come from freelance work or a day job.
It takes time to establish your platform and grow each of your individual income streams into something sustainable, and that’s okay. As long as you’re prepared to be in it for the long haul and you don’t give up when you’re bringing in less than you want to in your first year, you can set yourself up to build an author and writing business that’s exactly what you want it to be.
To help you keep things in perspective, try to set reasonable goals for your revenue streams. Set a target for your total income - enough to cover your needs, wants, and savings plus padding - and celebrate if you hit that goal with any combination of streams. From there, set goals for each stream individually; maybe you want to work with ten freelance clients this month, finish the course you’re writing so you can publish it, and make 50 book sales. Celebrate hitting those smaller goals while making sure you hit your monthly income goal as well. By breaking down your goals into manageable, specific steps, you can build your business without getting overwhelmed by the sheer number of things to do.
Beyond that, remember to take time off from all of your work. Put your active income down for a few days and don’t check your passive income. Let yourself decompress when you can and remember that good things come to those who are patient enough to keep trying.
Having multiple revenue streams as an author can help you build up your income and your platform, especially when your books are new or not as popular as you would like. It gives you the freedom to focus on building and the stability and resources to do so - you’re not totally at the mercy of publishers and readers if you’ve got other ways of putting food on the table.
No matter how you choose to structure your streams, remember that having multiple revenue sources doesn’t make you any less of a real or proper author. You don’t have to rely solely on your books and you don’t need to suffer if the market decides to shrink. Having income streams across the board is a great way to have a stable professional writing career.