I'm off to bed in a bit, but I thought it would be extremely prudent of me to draw your attention to the fabulous Lynne Viehl's royalty statement.
Here is my disclaimer: I have never read anything by Ms. Viehl. I'm sure her books are lovely; I just haven't gotten around to them. But I think she's simply smashing and fabulous because she posted her royalty statement online. I'm not saying that all authors should do this; certainly, you are and should be entitled to your privacy about your income and how many books are sold.
But for the many, many aspiring authors out there, Ms. Viehl has done them a great service by putting this up.
I will now dissect it for you, briefly, since Ms. Viehl did a good job of doing so already on her blog. Follow along in the jpeg. =)
US Regular Sales is 74,893 copies. This number denotes the number of books SHIPPED to booksellers in the United States during the royalty period.
US Regular Sales--Discount 61% is 11 copies. This number is the number of books that were sold by the publisher at a discount. I don't know what the discount is for, but you can see that Ms. Viehl receives less royalties on them. US Regular Sales have an 8% royalty rate, while US Regular Sales--Discount 61% has a 6% royalty rate. This is standard publishing contract stuff. The discounted copies could have been bought by Ms. Viehl, or been remainders, or been bought through a publisher-discount program.
US Regular Returns is 16,305 copies. This number denotes the number of books that the US booksellers RETURNED to Penguin. Doing rough math, this means that the booksellers returned, for money back from Penguin, a total of 21.77% of the books they ordered. They either overestimated, or the more likely case, is that since the books are mass-market, they simply cleared them off the shelves after a pre-determined period of time (usually three months).
For every book returned, as you can see on the royalty statement, the publisher did not pay Ms. Viehl any money. This makes sense from an accounting standpoint, since the publisher had to pay the booksellers back the money they had purchased the book with, and therefore didn't really "sell" it.
The Export Sales and Returns work in a similar manner to the US Sales and Returns. They should be explanatory to you, using the information in the above paragraphs. Note the different royalty rates for international sales. Also, a standard part of publishing contracts.
Now, we get to the really fun part of the royalty statement, which is Reserve Against Returns. The publisher is not currently paying Ms. Viehl for 21,140 copies of the title. This means they are holding back money earned from 28.23% of the total copies they shipped to booksellers. The reasons for this are many, but the primary one is this: publishers are pessimistic, and they expect those books to eventually be returned by booksellers. They therefore hold money against them (the reserve), and will adjust future royalty statements to reflect any returns made from that pool of books. In the best case scenario, the booksellers won't return any copies, and Ms. Viehl will eventually get that $13,512.69. In the worst case scenario, the booksellers will return all those copies, and Ms. Viehl won't see that particular portion of the money.
Finally, you see the BOOKSPAN subsidiary right sale, which reflects the $1500 that Ms. Viehl and the publisher were paid for sublicensing the novel to a book club. The split for the money is 50% to the publisher and 50% to Ms. Viehl; this is also dictated in her contract.
And that's about it, folks. Ms. Viehl explains how much money she earned in the original blog post.
That was fun, wasn't it? =)