Should You Sign That Book Contract? Part Two
In Part One of this un curso de milagros, I touched on points that an author needs to examine before signing a book contract: rights and distribution. It is important to know for how long the publisher will hold hardcover, paperback, and digital rights to your work, and you should know how the publisher plans to sell your book. Not all houses utilize the resources that get books into chain stores or places like Walmart, so it’s crucial to pay attention to how the publisher works. In this part of the series, I will look at other points in a contract that you – especially as a debut author – should know.
Royalties – When I signed my first book contract, the first two questions my husband asked me were 1) when will the book be published, and 2) when do you get paid? When it comes to doling out money for your hard work, publishers will handle royalties differently. I have heard from legacy authors (that is, writers signed to the Big 6) that they may receive a check once or twice a year, while those with smaller houses or primarily eBook imprints may get statements and checks monthly or quarterly. If writing is your sole source of income, this part of the contract bears scrutiny, and you will need to decide if publication is worth the wait on money.
You should check, too, to see if you will receive an advance on your book. If you have visited the website for Publishers Marketplace and read news of recent acquisitions, you may see that a certain author signed a three-book deal in a “nice deal” or “very nice deal” with a big publisher. These terms are assigned to various monetary advances – a nice deal could be anything from a thousand dollars to mid-five figures, while a very nice deal indicates the author’s advance could be anywhere from fifty thousand to ninety-nine thousand dollars. Now, not all publishers award advances in book deals. In fact, some may offer you a “token” deal of about a hundred dollars to show their enthusiasm for your book.
With larger advances, though, it’s expected that your book will earn out the money given to you, and hopefully exceed the amount. If you receive an advance, you will not receive any royalties until your book has “earned out.” Think of it as receiving a loan, and you are putting up your book as a means to pay back the loan. If your book doesn’t make enough in profits to satisfy your advance, you may be at risk for getting another contract.
Publishers will set the royalty rate that determines how much money you will receive per sale. I have spoken with authors who have received royalties from as low as 11% to as high as 50% – the higher rates tended to be connected to small, digital presses because eBook production doesn’t involve as much overhead as print. Royalties made be paid on the “gross” (what is earned without further deductions) or the “net” (earnings minus various deductions involved in distribution, etc.). For example, if your publisher vends digital versions of your book through an eCommerce site that charges ten dollars per listing, that ten dollars may come out of your royalties unless the publisher specifies that it will incur those costs.