Monday, December 04, 2006

Don't Sweat the Royalties.

Other Things Are More Important: Book royalties are a nifty idea, just because they are a way for a publisher to share a book's success with the author. Which is as it should be. However, while nice, royalties aren't that nice. Here's why:
  • You won't get that cash "advance": Okay, you might, but probably not if a) the publisher doesn't give advances and b) if you are a first-time (published) author. If you do get an advance, keep in mind that you are getting an "advance" against royalties owed to you down the road. This will delay any further payments made to you.
  • You won't see any money for a long time: Maybe three years, maybe never. Your contract will tell you how and when your royalties should be paid. This varies with the publisher. However, royalties are paid on books sold, and this will be calculated according to periods of time, a quarter to a full calendar year, and then made payable on some schedule. In other words, your royalties for sales in calendar year 2007 might not become payable until July of the following year. In addition, your contract might even absolve the publisher from paying cash royalties at all under some conditions--for example, if your project does not make a profit. In this case, you won't see any cash royalties (see below for other options).
  • Your royalty percentage doesn't matter: Okay, of course it matters. Just not as much as you think it does. The reality is that a smart publisher can only afford to give you so much of the pie. Think about it. If your publisher goofs and gives you a royalty share that is so high she loses money on the sale of every book, she quickly will stop selling your book (or go out of business, in debt to you). On the other hand, if he gives you a stingy royalty, so much so that he makes a terrific profit on the sale of each book, he will be more likely to work hard selling your book. Which is best for you? The stingier publisher.
In practice, this means that you shouldn't worry too much about the royalty terms your publisher gives you--assuming the publisher is a good fit for other reasons. Here are four things that are more important:
  • Get a good deal on books you purchase: You should get something comparable to a bookstore discount, 40% on orders of small quantities with an increasing discount for larger orders. Try to get a discount for large orders of at least 50%. If you're buying copies right off of the first press run, you might be able to negotiate an even even deeper discount.
  • Get an advance in copies of your book: While most publishers will not give you an advance against royalties in cash, they will usually be happy to give you advance against the estimated royalties for a year in the form of copies of your book. Usually, the value of these books will be calculated according to the discount schedule you negotiated above. This is a win-win deal. Your publisher makes out because she is eliminating some of her long-term liability (your royalties) with books that she might have printed at $2.00 a book and given to you as a royalty at a value of $10.00 a book. You make out because you are getting a book worth $10.00 to you--but without paying any cash at all--that you can turn around and sell at a retial price of, say, $20.00. If you can sell your books, you've just doubled your royalty. Like I said, it's win-win.
  • Get the right to buy books against royalties: Related to the above, make sure you can always buy books against royalties owed, even if not otherwise payable in cash. It's a good deal.
  • Make sure you get your rights back: Publishers do not keep in print books that do not sell at a certain level. To protect yourself from a book going out of print, make sure you can get your rights back if a book is taken out of print. In many cases, you might not be able to get all rights to revert to you. However, you should be able to guarantee that you can continue to print an edition of your own in the event the publisher discontinues the book.
The Publishing Pro, LLC.

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