What kind of royalties should I expect?

Major publishers pay royalties of 10% on retail. For example, if your book sells in bookstores for $20, you would get $2. In the case of a picture book, the illustrator and author would split the royalties, which are usually 5% for the author and 5% for the illustrator. Sometimes the split is different if one or the other is a "big name," and the publisher is counting on that person's name to sell more copies of the book.

If the publisher is small, it may pay royalties of 10% on net (the amount the publisher receives from bookstores or other accounts), rather than retail. If possible, try to get a little higher rate than 10% if the publisher is paying royalties on net.

You should also try for an escalation clause, so that if the publisher sells more copies, you get paid more. You might ask for 12.5% royalties if the publisher sells more than 20,000 copies of your book.

If you are a member of the Society of Children's Book Writers & Illustrators, you can compare the terms of your contract with the model contract that SCBWI offers to its members. If you are a member of the Author's Guild, you can also check their model contract (though it's more geared to writers of adult books). You can also hire an intellectual property attorney to go over your contract. And finally, if you have an agent, your agent will advise you about royalties and get the best terms for you.