The Traditional Contract. Traditionally, the publisher takes all the financial risks, with a result that the author's royalties are low. The publisher meets all the expenses of printing the book and distributing it to the bookstores. If it doesn't sell within a certain time, the retailer sends it back. Typically, there is a 100% mark-up from wholesaler to retailer. Typically, royalties are 10% of the retail price. Typically, also, the author gets a much bigger slice of the pie if the book is licenced to a mass market paperback publisher, a comic book, or foreigner translator, and he keeps all the film and TV rights.
If the book fails to take off after a certain amount of time, it is sold as a "remainder" ie sold at a loss, with the author getting nothing. These are the books you find going for a song at newsagents and discount bookstores. Australian publishers seem particularly ruthless at clearing unsold stock, and you will frequently find on the remainder pile foreign bestsellers which would certainly be sold if given enough time.
How big is an initial print run? 3,000 copies is large for Australia, which has a small market. However, I have been advised that it can be equally small in a larger country such as Britain. Nevertheless, if it does make it to a second printing, your royalties go up because (a) it is cheaper, because the initial setting up costs have already been met, and (b) there is less risk, because they now know it will sell. Royalties increase with each printing until, if it becomes a best seller, the author gets the lion's share.
Print on Demand (POD) is a new form of publishing enabled by computers, and is probably the wave of the future. The whole publishing process is performed by computers, which means the book can be printed as desired or, more likely, printed and distributed in dribs and drabs as required, without the need for a large initial print run. A couple who run a small POD company as a sideline told me that it requires an initial outlay of $1,500 for each book, and I suspect that it would be cheaper for large scale operations. Nevertheless, I have a couple of reservations.
First of all, how does the public learn about your book? My opinion is that, if a work hits the bookshelves, and is of quality, it will sell. Bookworms wander into bookstores, browse, see it, flick through it, and decide to buy. The probably don't browse a publisher's website so frequently. Many POD publishers, of course, will distribute them to retailers like any other publisher. In any case, they have a vested interest in getting the book sold, so they will use their skills to push it.
More to the point, you could find yourself locked in. What if your book takes off, and sells 30,000 copies instead of 3,000? Will you still be stuck on 10% royalties indefinitely? What if publisher fails to get them sold? Wouldn't you like to try another company, as you could with a traditional contract?
In my opinion, any POD contract should permit renegotiation or cancellation after a set period - say three or five years. It definitely should not be open ended.
Now we come to the dubious practises of literary predators.
Self Publication. You pay to have the book published, and you take all the profits. However, there are a couple of draw-backs (apart from the obvious one that you might be a lousy writer): it is very expensive, and you must have a distribution network. The latter is something wannabe authors tend to forget; you have to tap into the distribution companies which serve the publishing firms and the retailers.
Very occasionally, this works out well. Some people are not after a commercial venture, but just a couple of hundred volumes of poems or autobiography to give to friends or relatives. These days they would be better putting it on the internet. A friend of mine once made a study of the dairy industry in the Bega district, and he reckoned he had enough contacts to self publish a booklet on the subject. Also, I notice that a certain popular humourist and speaker has learned how to tap into the distribution system to market her own self published works. But unless you have solved the problem of distribution, don't even think of self publication.
Nevertheless, there exist a large number of companies derisively labelled "vanity press" because they appeal to the vanity of the wannabe authors. They call themselves publishers, but are really printers, who will take your money and then leave you with a large pile of (probably badly written) books you cannot sell.
Shared Cost. Since taking on an unknown author is a bit of a risk, it would sound reasonable for the author to share some of the costs and risks, in compensation for larger royalties. Right? But wait a minute! The cost of a print run under the traditional method is so high, that an author's contribution is likely to be minimal, while the initial set-up for POD of $1,500 hardly warrants an author's contribution.
My book, The Repat Racket was topical; it would lose its relevance if it had to delay ten years before publication. (I have since put it on the internet.) I therefore reluctantly agreed to a cost share arrangement with Zeus. The asked sum of $3,600 was undesirable, but something I could afford to lose. They did a good job of editing and producing the book. Indeed, I discovered how computerisation had revolutionised the industry. Previously, the author would receive printed gallery proofs in the mail and asked to proof read them. These days publisher and author e-mail it back and forth until the final version is reached.
Everything went well. I started receiving glowing feedback from the public. Then, after the sale of little more than 70 copies, would be buyers were telling me it was listed as "out of stock". When I enquired, I was informed that they prioritise printing by the size of the request ie a request for 100 copies is printed before one for ten. Sounds reasonable, doesn't it? Rubbish! There are two other routes to take if you want to maximise sales.
- They could top up each title whenever stocks run low, until it becomes obvious it is not selling.
- If they were going to allow stocks to reach zero then, when somebody ordered a copy, they could at least advise him that it was temporarily out of stock, and they would only bill him when it became available. But by listing it as "out of stock" they ensure that no-one will ever order it again, and it will never get back into stock.
Recently, by accident, I came across a UK company called Pegasus (not to be confused with a US company of the same name) which claimed to be looking for new authors, and was prepared to offer either a traditional or shared cost contract. I smelt a rat but - what the heck! - it cost nothing to e-mail them a manuscript. In due course, I was advised that they had accepted my novel, and if I wished, they would send me a shared cost contract. They assured me they were not a "vanity press" company, but a genuine publisher. I told them I would not be prepared to accept a shared cost contract unless the problems I had previously encountered were ironed out. Their response was:
I completely understand your concerns. We are not a print on demand company. We have our own warehouse on site and therefore carry stock. We continuously print. Our warehouse staff keep a careful eye on stock levels and we aim to despatch all orders received the same day,The contract offered me 25% royalties for a payment of £2,400. That's more than $4,300 Australian. No way! Also, I noticed two further problems:
Firstly, as the average price of their books was £8, I would need to sell 1,200 copies to break even. How did I know they would print that many? If a shared cost contract has any value, it should stipulate how many copies would be printed - say 3,000. Of course, they might not all sell, but that's what shared risk is all about.
They also stipulated that they could decide to dispose of unsold copies as a remainder if they failed to sell. At least that suggested they were planning to print more than 70! However, it was open-ended as far as the author was concerned. There was no way he could just cancel the contract if the book didn't sell, and look for another publisher. He was effectively handing over his rights to them.
I told them all this, and suggested they opt for a traditional contract. Naturally, as expected, they declined. I wonder if they ever offer it to anyone.
E-books are another wave of the future. Some businesses will charge you a fee to produce an e-book, but then, how does anyone know about it? It just sits advertised out in the ether. Amazon runs Kindle Direct Publishing, which appears to be free, but I haven't tried it (yet) for the above reason: how is anyone going to know about it? The facility is best for established writers and, in fact, many publishers put out a Kindle edition at the same time as the hard copy. (To its credit, Pegasus offered to do the same.) Authors discover that they earn just as much through Kindle as through hard copies, despite the greatly reduced price. This is because royalties are either 35% or 70%. Why would you choose the former if the latter is available? I presume that Amazon wants to get the same amount from both, so a 70% book will be more expensive. It is therefore a matter of calculating whether the number of cheap copies sold will balance the higher royalties of a more expensive copy. In any case, it is easy to calculate that a $6 Kindle book will produce the same royalties at 35% as a $20 hard copy at 10%, so why be greedy?
Being a first time author is not easy, but remember: if a publisher ever asks for money, they are trying to rip you off.