Susanne Dunlap

Random clarifications

In Historical Fiction, The writing life, YA, MG, Kids on June 22, 2010 at 8:53 am

I recently (like, yesterday!) had the news that my first young adult novel, The Musician’s Daughter, sold to Scholastic for their book fair, the catalogues that go into schools that we all remember from those days. I’ve received all sorts of congratulations and marveling at this wonderful occurrence, which means that just like that 15,000 more copies of my book have been sold.

I’ve also had comments and questions that have to do with the process. “How did you do that? Was it your agent? Will they sell?” etc. etc., and I realized that there is a fair amount of confusion out there as to how things like this work, as well as how other aspects of the publishing business work. I’m hoping to have some industry experts talk a little about the process on my blog, but for now, I’ll give a quick run-down.

First of all, an agent is the one who pitches your book to publishing houses, based on his/her knowledge of the market and relationships with editors. In theory, an agent can pinpoint editors at different houses that will be interested in the book you have written. Good agents don’t waste the time of editors who are not a good fit, and that knowledge is the process of research and talking, meeting etc. Good agents (like mine, Adam Chromy at Artists and Artisans) will give you feedback, make you work and polish your novel until it’s really ready to be sold instead of just throwing it out there to see if it sticks.

Assuming a book sells, the next step is the contract process. The advance has already been agreed by this point, but the contract nails down how you’ll receive it: 2 or three installments usually. The contract also stipulates your royalty rate, whether and on what conditions any bonuses will be paid (NY Times Bestseller list, for example—I wish!). It also sets out exactly what rights the publisher has bought and what rights remain with the agent or author.

In my case, my agent prefers to keep the movie and TV rights to try to sell independently. Unfortunately for me, period dramas are the hardest to sell because of the cost of producing them 😦 but I’m still hopeful…

Book club, foreign sales etc.—these are rights that often remain with the publisher. Any sales they make either result in an additional advance for you (that usually goes against paying off the advance you got from the publisher) or a royalty rate. Book club sales have pretty low royalties because the books are sold in bulk at a discount. That’s what all this royalties against net proceeds gafuffle is about that the Authors Guild has been fighting with Wiley over. A standard royalty rate is against the cover price, not what the book actually sells for, which can be very different.

Finally, there’s this thing about advances. An advance is that. It’s not a cash payment independent of your book sales. The publisher takes a gamble that a certain number of copies will sell, and offers what they think is reasonable based on their projections (which are based on all sorts of complicated factors). “Earning out” means that your book has sold enough copies that your share (anything from about 6% to 15%, depending on whether your book is hard cover, mass market paper, YA etc.) adds up to what you were given in the beginning. Only after that do you start getting royalty checks with your statement.

Finally, what baffles me utterly is how antiquated the system is in this day where everything is instantaneous and computerized. Authors get royalty statements twice a year, and when they get them, they are six months in arrears. That stretches out the compensation time frame immensely, which is part of what makes it difficult for authors to earn a living. And there’s this system of holding “reserves against returns”. That means that a bookstore or chain might order X number of copies (and that shows up on your royalty statement) but reserves the right to return what doesn’t sell. It’s a weird system, but I understand that bookstores can’t afford to keep stock that isn’t selling, and it’s a tough world for them out there.

Then there are eBooks. That’s a whole other topic, so I won’t go into it here.

I hope some agents/editors read this and comment if I’ve gotten anything wrong here! In the meantime, count me incredibly appreciative of all the effort my agent and my editor/publisher have put into trying to get the best deal and the best distribution for my books.

  1. It all pretty well looks like my experience Susan. Very clearly presented too. The only thing I have heard is that in some cases the form of the advance, how much and when, is also up for a certain amount of negotiation by the agent and the publisher. And if you are looking at Harlequin category there is very little negotiation at all. I would probably add that Royalty statements are notoriously hard to read and understand. Each publisher has a different format.

    • “In some cases?” In almost *all* cases — barring special and specific circumstances like Harlequin category. Category is a whole other animal, with much more in common with magazine articles (such as super strict word count limits) or book clubs and with payment structures based on experience within that line. It’s extremely unusual. Also unusual but part of the novel-publishing world: works for hire, whereby you are paid a flat fee that is neither advance or royalty, and no matter how many books you sell, that’s all the money you ever see. Again, a very different situation than the one Susanne is talking about.

      Indeed, most initial negotiations that occur on offers are about three things: the number of books being offered, the precise rights (like world vs. North American), and, most importantly, the advance, how much it is, how it’s split up, etc. Things like royalty rates are usually standardized by genre outside of big stars. I’ve received offers on a book that have varied by tens of thousands of dollars in advance, and the royalty rates have always been equal.

      Regarding royalty statements, I have not had this problem. I think it varies by publisher. Random House royalty statements are incredibly easy to read and understand. Harper royalty statements are a bit more complicated, but by no means indecipherable.

      Congrats on the awesome bookclub news, Susanne!

  2. Got this comment in email from my agent and he said I could post it here. I think he raises some good points!

    It’s basically right – but the whole point of the “advance” is that you don’t have to wait for the actual sales and statements to get any money at all.
    And the publisher keeps account for you based on their receiving money from foreign publishers, book clubs, book stores, distributors – this all takes time and they all pay slow – and publishers have hundreds or thousands of books to account for so it takes time and labor.
    In the future, some authors will just publish themselves on the Kindle at and get their money sooner – but Amazon is unlikely to pay advances and there will only be kindle copies available. Publishers are still the best option to get the book out in many forms and venues and dealing with that diverse distribution is labor intensive.

  3. Great discussion here! Useful and informative!

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