Tuesday, May 15, 2007

Contract Issue: Buying Your Books from Your Publisher

Making Your Contract Work For You, Not Against You: If you find a publisher for your book, you should be able to buy that book from your publisher at a substantial discount. Typically, the publisher will offer you something like a "trade discount," which is to say a price that your publisher would sell books to resellers. In fact, you are a reseller, perhaps your publisher's best one for your book. The more books you buy at this rate, the better it is for your publisher. For this reason, smart publishers will encourage you to buy more books at a time by giving you deeper and deeper discounts (within reason) the more books you buy. Your discounts should be stated plainly in your contract, as a percentage of the list price or something equally direct. Look for discounts on the order of 40% off the price (or 60% of the list price, same thing) for buying a handful of books to 50% or even more for buying hundreds of books at a time. Do not accept a contract that refers to a generality like the right to buy copies at a "wholesale price" without any specifics. We've heard of such things, where publishers turn around and make the authors buy books at maybe a 10% discount, the same one they give their own internet buyers. Most publishers aren't this dumb, but apparently some are. (Note: One of the downsides of On-Demand Publishing is that the discounts to authors don't come anywhere close to what I'm talking about above.)

Two other suggestions:
  • First, consider asking your publisher if you can commit to buying a large quantity of books (1000 or more) off of a press run. If your publisher is agreeable, you'll get your deepest discount this way.
  • Second, get the right to buy books against your royalties. If you aren't getting a cash advance against royalties--more typical than getting one--ask to get an advance in the form of books. Of course, this will reduce (or eliminate) your cash royalties down the road. On the other hand, if you can sell your books, this is financially advantageous. Here's how it works. Let's say you have accumulated $1000.00 in royalties payable somewhere down the road. Let's say you have the right to buy your book, which has a $20.00 list price, at a not-all-that-generous 40% discount or $12.00 each. Your publisher lets you take 83 books worth $996.00 at your discount (83 times $12.00) against your royalties owed. You turn around and sell those books at the list price, thus your $996.00 royalty taken as books converts to $1660.00 (83 times $20.00). Of course, you've got to sell the books--but that is the name of the game. It's a good deal.
--Ken Guentert, The Publishing Pro.

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