What you do has to be worth more than the cost of paying you to do it. A lot more.

This is crystal clear in most industries, but gets muddied a bit in publishing. The combination of producing art, work that is in the public interest, and that which supports a healthy bottom line sometimes makes it difficult to see the basic economics.

Earlier in the year, The New York Times did a simple chart sums it up nicely. Amazon pays $13 for a book that sells for $26. After royalties to the author, printing, marketing, etc., the publisher makes around $4 to cover overhead and turn a profit.

A publisher’s overhead doesn’t just mean salaries.The overall cost of an editorial team also includes support staff, benefits, office space, phones, computers, printers, travel, and office supplies.

At the end of the day, it turns into something like an SAT question:

How many copies of how many books must sell to support how many authors and how many editors?

X copies * Y books = A salaries + B royalties + C costs + D profits

For most ad-supported sites, the equation is basically the same:

X page views * Y posts = A salaries + B freelance budget + C costs + D profits