First I want to say one thing: I am no publishing expert. At all. In any way. The following is only what I learned as I researched on my own. Do your own research. This is just meant to get you started. I did my best to include as many of the resources I found. I hope they are helpful.
I'm not going to share the specific details of the book offer I received. I never signed it, but I'm not interested in burning any bridges.
My experience with the publishing house that contacted me was absolutely positive in every regard. I feel it's courteous and right to keep my book offer information confidential. (Incidentally, Rachelle Gardner posted about this very thing yesterday, namely, the importance of keeping contract details confidential. An excellent read and a great reminder.)
Anatomy of a book offer
But for those of you who are new to this, as I was, I will share some basics, along with some resources.
Aside from the legal verbiage that is customary with any legal document, here are some of the main components of an offer:
- Details of the expected work (number of pages, retail price, word count, timeline of publishing process, etc.)
- Royalty rates
- Number of free copies the author receives
One thing seems clear, and that is, the details in an offer can vary widely depending on your genre, your publisher, the number of books you've sold previously (if any), how well-known you are in the world (celebrities, politicians, etc.) and the current state of the publishing marketplace.
For a complete newbie to this process, receiving the book deal was overwhelming. I didn't want to do anything I would regret later.
I also found it somewhat difficult to find information about what a first-time author could expect or should be looking for. It was at this point I began considering hiring a literary agent.
Further reading about book deals:
- If you really want to get into the nitty-gritty, here is a detailed breakdown of the parts of an offer. (Again, what's included will vary from publisher to publisher, but this is just an example.)
- And Rachelle's blog. Huge resource. Huge. This post breaks down a contract in more depth but her whole site is a gold mine. (Tip: At first it's a bit tricky to find things by topic on Rachelle's blog. But at the top of her home page, below her main header and just above her main content there are two links: "Find Post by Subject" and "Search this Blog.")
Should I hire a literary agent?
There are authors who work with agents and authors who don't. Overall, the message I've gotten from others is that working with a literary agent (assuming yours is a good one) is worth every penny.
The benefit of working with a literary agent is that they know the inner workings of the publishing world and (ideally) have your best interest in mind. They are on your team. Their job is to act as a liason between you and the publisher, making sure you are treated fairly, helping you understand all the dots and tittles of publishing and using their contacts and know-how to ensure you get the most beneficial deal possible.
The cost of a literary agent, of course, is that they get paid. They "typically make a 15% commission on sales of your book (this means 15% of your advances, royalties, sub-rights sales, etc.)" according to Rachelle Gardner.
Further reading about literary agents:
- I highly recommend reading Rachelle's full article (linked to above also) called Questionable Practices by Literary Agents. Great things to look out for.
- Here's an interview of Rachelle Gardner on Writer's Digest that provide clues about how best to work with an agent.
- Rachelle has a list of agents here and Michael Hyatt lists some who represent Christian authors here.
A word about advances and royalty rates
Of course, this is where you get paid so it's worth spending a bit of time here.
This is how I think of it:
First, let's start with royalties. A royalty rate is the percentage you will receive on each book sold. The royalty rate might be calculated against the cover price or the net price (i.e. cover price minus discount to the bookstore).
I know royalty rates are variable, but just for a general idea, I'll use the reference Rachelle Gardner uses in the 3rd to last paragraph here and use $1 per book for the following example. (Really, you should read her explanation about how royalties work here where she gives more examples.)
But my super simplistic explanation of an advance is simply getting paid some of your royalties upfront.
Your publisher has to make sure they don't lose money on this deal (like print too many copies of your book that never end up selling, etc.). So, they take into account various factors that help them estimate the number of copies your book will sell.
Let's say they predict 10,000 copies of your book will sell. (I've seen a wide range of "average copies sold"—like between 5000 and 20,000—but let's use 10,000 for ease.)
Here's some super simple math just to understand the concept.
Let's say you're getting $1 a book (your royalty). Assuming your book did in fact sell a total of 10,000 copies, that would mean you would get a total of $10,000, right?
Well, as I said, the advance is like the publisher paying you some of those royalties ahead of time. So, maybe they pay you $6000 up front. That's your advance. As soon as copy #6000 sells, you "earned out" your advance. Then, when copy #6001 sells, you just made another $1.00. In order to continue getting royalty checks, your book has to continue to sell and you get $1.00 for each. Make sense?
Unless otherwise specified in your contract, your advance is yours to keep, even if your book doesn't "earn out" the advance.
Sidenote: According to the NY Times, apparently "7 out of 10 titles do not earn back their advance." (Just an interesting tidbit.)
Further reading about advances and royalties:
- Again, I highly recommend you check out all of Rachelle Gardner's posts about advances & royalties. She covers so much and is so informative.
- Brenda Hiatt has tracked the advances & royalty rates of various publishers over many years. Her focus on the romance (and YA) genre, but I did find this helpful as it gives a general idea.
- I think Joe Wikert does a good job of explaining how the advance and royalty situation works out here. His genre is computer books. In 2005, he pegged an average advance at $10,000. (Just trying to give you lots of examples here.)
- The NY Times published About That Book Advance… which is enlightening as well. The advance amounts here are high and probably should not be expected for the average first-time author. He seems to be talking about famous authors. Still, it's an interesting read.
- Rebecca Brandewyne offers her perspective on advances and royalties as well.
- Why writers never reveal how many books their buddies have sold is interesting as well.
- Why I Write Books Even Though I've Lost Money on Every Book I've Written. Entertaining if nothing else.
- It became pretty clear that finding a literary agent was probably a good idea. I have since learned that finding a good one is best done by getting a recommendation from someone else. Also, a tip I heard at Relevant was to look at the Acknowledgements of a book you like. Authors typically acknowledge their agent. (Use the same technique to find an editor if you need one.)
- There may be some negotiability when it comes to an offer, but I think this is where a literary agent would be an excellent asset.
- Before I received my offer, I didn't know what to expect at all. I mean, was a reasonable advance $500, $5000 or $50,000? I had absolutely no idea. It didn't take me long to realize things were variable, but using the above resources, I came up with a general ballpark figure for both the advance and the royalty rate. When I received the offer, the royalty rate fell within the range I had expected. The advance was slightly more than I had expected.
Now I had a handle on the basics, but what about marketing & promotion? What was going to happen to the ebook which was already selling at the time? What about the numbers? Was it worth it?
So many more questions arose, but I was beginning to think I'd be crazy to let this opportunity pass me by…
Other posts in this series
- Why I Turned Down a Book Deal (And the Lessons I Learned), Part 1
- Why I Turned Down a Book Deal (And the Lessons I Learned), Part 2
- Why I Turned Down a Book Deal (And the Lessons I Learned), Part 3
- Why I Turned Down a Book Deal (And the Lessons I Learned), Part 4
- Why I Turned Down a Book Deal (And the Lessons I Learned), Part 5
- Why I Turned Down a Book Deal (And the Lessons I Learned), Part 6