The Business of Writing

A reader wrote to me the other day with some very good questions. Here they are, with my answers. But bear in mind that my last novel was published in 1995, and a lot can happen in a decade.

a. Does the author receive a percentage fee?
Yes. In some cases, the author may write a novel for a flat fee, in exchange for surrendering all rights. But this is rare. In the case of a ghostwritten book, the ghostwriter usually receives the complete advance and some substantial percentage of any further revenues. So if Paris Hilton comes to you to help her break into writing fiction, your contract should be clear about this.

b. If so, it is a percentage of what number (retail shelf price, wholesale price, etc.)?
It's usually 10 percent of the list price (what the customer pays) for hardback fiction, and 4 to 8 percent of mass-market paperback fiction. So a hardback sold at $30 should earn you $3. A $9.95 paperback should earn you 40 to 75 cents.

The contract may specify that for a mass-market title, royalty rates will go up after some improbably number of sales (maybe 150,000). So copy #150,001 will earn you perhaps 99 cents. The same terms may apply in hardback sales, but with a lower number of sales.

c. If based on an ‘invisible’ number, as opposed to the visible shelf price, what are typical values for the invisible numbers or their percentage relative to the shelf price?
Publishers often sell batches of a given title to book clubs, or at some severe discount to a big-box bookseller. In such cases, the royalty is likely to be 10 percent of the net price. This can be anywhere from 40 to 60 percent of the list price.

So if the Thriller of the Month Book Club buys a thousand copies of your $30 book, it will pay something like $24 per copy, and your payment will be not $3 but $2.40.

If your book fails to sell, the publisher may hand over the excess copies to a book jobber, who may pay 25 or 50 cents per copy. The jobber will then sell them to a bookseller who will charge maybe $2-$5 per copy. You may, if your contract specifies, get a percentage of what the publisher makes from the jobber—maybe a penny or two per copy. Otherwise, you get nothing from remaindered copies.

d. What is the range of such percentages, and what are reasonable expectations for a first-time author?
The range can vary pretty widely. In some genres, the payment for a first-time author is set in stone at a low figure. Many romance publishers pay a laughable advance for the first two or three titles, and then increase the amount gradually thereafter.

But an editor with a good track record may see your first book as just the start of a profitable string of books (even though title #1 is almost sure to lose money). She may therefore pay you a more respectable fee. A friend of mine sold his first novel to a Canadian publisher for $15,000 for a hardback—which struck me as pretty good money, since my last mass-market novel, Redmagic, earned me $8,000 US and not a penny in royalties.

By the way, if your book doesn't earn out its advance, you still get to keep the money. If you fail to deliver a satisfactory manuscript, however, the publisher may demand the return of whatever he's paid you so far.

e. How do these percentages vary for hard cover and paperback books?
See above.

f. What is the “advance” paid by the publisher, how is it calculated, when is it paid?
The publisher tries to estimate how much your book will likely earn. A typical mainstream Canadian novel by a first-time author will sell maybe 800 copies, so the publisher expects to lose money. Most US mass-market paperback first novels also lose money.

But the publisher is thinking about the long term and many titles, each of them winning you a few more readers until those readers are a substantial number (who will also pay for your earlier works). But it will likely be no more than $5,000-$10,000.

Calculate the hours it took you to write the novel, and figure out your hourly wage. Also think about how many books you would have to write (and sell) to gross, say, $30,000 a year.

A first author can expect to paid in thirds: one-third on signing the contract, one-third on submission of a satisfactory manuscript (after all, you've got to revise what you sent), and one-third on publication.

The contract should specify two reporting periods a year: January-June, say, and July-December, with the report on sales (and any money) arriving within 90 days of the end of the period. So if your book is published in October, you should get a statement of its sales and earnings by April 1. (Returns are a nightmare for the publishing industry, but most publishers have no choice if they want booksellers to order titles—especially titles by unknown authors.)

Be aware that contracts may require withholding some chunk of your money "against returns"—that means the booksellers may order a thousand copies, and then return 800 of them within 90 days. So instead of making $3,000, you've really earned only $600. The publisher may therefore hang on to money owed you until all the returns are in.

g. Is the agent percentage taken on the funds paid by the publisher to the author?
CK:
The agent normally takes 15 percent off the top: A $10,000 advance means $1,500 for the agent and $8,500 for you. If your novel actually "earns out" its advance, your agent will take 15 percent of any additional earnings.

If your agent also negotiates overseas sales and translations, expect to pay the agent 20 percent of the proceeds. (Movie and TV sales are a whole different story that I don't know enough about to explain.)

h. What percentage can an author expect to pay the agent?
In the old days, it was 10 percent. Now it's 15 percent, and sometimes more. Many agents also deduct their business expenses: So if they photocopied six copies of your manuscript, and couriered them to various publishers, those costs will come out of whatever the publisher finally pays you.

i. Why would a hard cover edition be or not be published? Who makes the decision? What are the economic and time factors associated with the decision?
Publishers seem to think that hardcovers will get more reviews, and that in turn will help paperback sales. In some cases, a paperback house may arrange for a hardback house to bring out an edition of your novel for just that reason.

A hardcover doesn't really cost a whole lot more than a trade paperback (that is, a paperback printed the size of a hardback rather than in a mass-market size that fits a rack). But publishers seem to find it tedious to remainder hardbacks, so they'll stick to paperback unless they think the market will pay $30 instead of $19.95 for a trade paperback or $9.95 for a mass-market title.

j. Should the author complete the manuscript before seeking an agent, or is it best to get an agent sooner?
By all means complete the manuscript! Then the agent you approach at least knows you're capable of doing so.

k. Are agents negotiable or do they have “take it or leave it” contracts?
Some will negotiate; others will give you a detailed contract and that's that.

For a long time now, some agents have charged a "reading fee": they'll bill you for the time they take to read your manuscript, and offer you a detailed critique. It will not be kind to your ego, but it may teach you a lot. Some such agents will waive the fee if they think they might actually sell your manuscript—but you have to sign their contract, on their terms.

l. What is a typical timeline for events that follow submission of the manuscript to the agent?
"Geological" is the term that springs to mind. First, he's got to get around to reading it, and he figures it will be time wasted because you're just another damn unknown wannabe writer.

If he does read it and likes it, he may move pretty fast to sign you up. This will make you feel giddy and exhilarated. But he will then have to identify the publishers most likely to consider it, and those publishers will also consider you a waste of time. Both agent and publisher would rather invest their time in established, successful authors, after all. The agent succeeds by understanding the market and how your manuscript could prosper in it. The publisher trusts the agent's opinion if the agent has a track record of success.

A publisher who likes your story may respond quickly (within two or three months), or slowly (a year). The answer may be "Thank you for thinking of us, but we'll pass." Then you start all over again.

Some agents, and some unagented writers, will submit the same script to several publishers at once. Publishers don't like this, but they put up with it in the case of big, profitable writers. They're less likely to consider your first novel if they think those rats over at the other house are also reading it.

Again, it's just a matter of time and money: Why pay an editor to evaluate a manuscript, and offer a contract, if the agent or author is going to say "Sorry, Random is offering us ten grand more"?

Once the publisher does accept it, your manuscript has to wait in line. Publishers bring out a certain number of books every month, and each book requires editing, revision, design, cover art, and printing. These are all scheduled activities: the editor can do your book next April 4-11, and no sooner. The art director can't assign someone to do the cover until June. Etc.

This is why it's a good idea to meet your deadline. Otherwise you'll lose your place in line (as I've done once or twice), and the wait will be a year or more.

A typical novel takes about eight or nine months from acceptance to appearance on the shelves. Sometimes it can happen faster; sometimes a title may be delayed to exploit the Christmas market, or the summer market. If you're a very prolific author, you may crank out books faster than your publisher wants to bring them out: two titles a year seems to be the maximum.

I see that nonfiction books, even long and substantial ones, are now appearing with astonishing speed after the events they deal with. These appear to be surefire bestsellers that are worth the cost of researchers, extra editors, and heavy publicity.

Again, I'm talking about the publishing industry I broke into back in the 1970s; I haven't signed a contract for a novel since 1993 or thereabouts, and I may never sign another. But this is the best information I can offer.

Comments

[Dave Rea]

How do you feel about self publishing? I have written a few short fiction stories and thought about having 500 printed up and selling them at local stores. Is this feasable?

[Steve]

Thanks for this trasure trove of info and thanks also to the reader for asking such acute questions. There's too much unnecessary mystery about the whole publishing process.

[Malcolm Welshman]

Hi. My novel 'Pets in Prospect' was published last Dec in hardback by Robert Hale in the UK. Being hailed as the 'new James Herriot'. I've undertaken an intense publicity drive - 20 radio interviews, 8 newspaper and 4 magazine features to-date but feel I have been hampered by being a first time novelist and the book being hardback and therefore expensive. What it needs is to be taken up by a paperback publisher. It would really take off then. The rights would have to be be sold by Robert Hasle. How can I get the attention of a paperback house? It would seem a pity if the book sunk as all the reviews and comments on Amazon etc have been very effusive. If in paperback, it would be a big hit. And now that the initial 'just published' stage has passed how can I keep the publicity momentum going?

[Asha Bernard]

Hello,

A publishing company in India has accepted my first novel. But they want me to buy about 300 copies out of the 1000 they will be printing.
They say since they are a small company, they also would like me to contribute a small percentage of the printing cost.

I haven't signed any contract yet. And I do not have an agent either.What do you think about this scenario?

thank you

Asha B

[Crawford Kilian]

Hi, Asha--

I don't think much of it. You're dealing with a vanity publisher. In some cases that's OK, and a number of online publishers in the US are very clear that you pay the costs and they do the distributing.

If your publisher in India thinks he can make a profit off the sale of 700 copies, if only you buy 300, more likely he figures the profit will come from your 300 purchases. In your shoes, I would turn this publisher down.

[Asha Bernard]

Thank you for the reply.

Asha