Tips for Writer/Agent Negotiations

Okay, you’ve decided that you just can’t be successful as a writer unless you have a literary agent representing you. You’ve found one, but just because you're excited someone wants to represent you doesn't mean you should let them take advantage of you. You still must watch out for your own interests. Not all agents are as professional as they should be. Before you sign on the dotted line, be sure to follow these tips while you’re negotiating your contract.

First, find a reputable agent. You’re first thought is: Aren’t all agents reputable. The simple answer is no. Reputable agents generally don’t require payments of any kind when you sign a contract with them for their services. They also don’t charge fees to read your work. And they don’t sell your work to vanity presses. But most importantly, they’ll readily share with you the names of other authors and projects they’ve represented.

Reputable agents don’t charge excessive commissions. Today, the standard is 15 percent for book sales, although you could pay up to 20–25 percent for foreign sales, and 10–20 percent for movie, TV and theatrical sales.

Most reputable agents won’t try to cash in on your speaking fees—they really aren’t entitled to, unless they were directly responsible for getting you the engagement.

Control your agent-related expenses. Ideally your agent won’t charge you for making one or two copies or standard postage, but only for unusual expenses, such as large numbers of copies and priority mail, express or courier services. You agent should work within spending limits that you set and not spend anything over a fixed amount, say $100–$250, without your approval.

Some agents demand that publishers pay them your entire book advance directly, then they’ll send you your share. In most cases, a publisher will send you your 85 percent and the rest to your agent to cover your commission fee. The first incidence can pose a risk. If your agent gets paid your entire advance and then goes bankrupt, you’ll get nothing. Insist that your publisher pay you the entire advance directly, then you pay your agent.

Although most publishers still report and pay royalties semi-annually, typically within three months after the semi-annual period ends—the check for the royalty for a book sold in January will be paid in late September. If your agent insists on receiving all monies owed to you by the publisher, he or she should pay you promptly upon receiving the funds—ideally within 10 days, but no longer than 30.

Above all, you should expect your agent to be honest in their dealings with you., but don’t take that for granted.

Do You Need an Agent?

Do you need an agent? The answer could be both yes, and no. Today, with a lot of writers heading into self-publishing, over half the books published go to market without an agent’s help. Even if you work with a traditional publishing house, you can place your book without an agent.

While it’s true that every writer gains some prestige by having an agent, having one doesn’t make you any better a writer. If you don’t produce quality writing, having an agent won’t help you. Agents save editors time and money. Editors know that agents, if they’re competent, weed out the bad material, so basically an agent vets the material for the editor, so whatever an agent sends in is usually given preference in being read earlier than material that comes in “cold." But in no way does it guarantee that the work will get published.

A good agent knows which publishing houses are in the market for what sort of book or project. He or she knows which publisher will release which rights and what the probable bottom line on other negotiations will be. And agents like to deal with certain editors.

A good agent should also be a good friend who can also be objective. He or she will be part salesman, part lawyer, part literary critic, and part father/mother-confessor.  Agents get calls from writers who can't pay their bills, from writers who are drunk or who have been arrested for one thing or another, and from writers who just want to hear a reassuring voice.

Of course, once you place your book or book proposal in an agent’s hands, you may hear nothing for a long time. Busy agents are in constant touch with those who buy ideas, books, movies, scripts for TV miniseries, book excerpts, and subsidiary rights, as well as with their clients. And remember, you won’t be the agent’s only client.

What agents are good for is negotiating through the maze of book contracts and subsidiary rights, both foreign and domestic. These include sales to book clubs, special sales, film and T.V. options, syndication and reprint rights, and so on. Depending on the arrangement you make, your agent may handle all of your works, only your books, or only certain kinds of books. Some agents will tell you at the beginning what they’ll handle and what they won't. If they don't, ask.

You may want to give an agent only certain kinds of writing and sell the rest yourself. Some writers feel the advantage of a large literary agency lies in the specialists who negotiate film or T.V. rights which can be lucrative. But most good agents who have been in the business any length of time will have some sort of representation in this highly specialized area. It's rare  these days for agents to handle magazine articles or short stories. If they do, it’s usually because you’ve made money for them through your books and have gained some notoriety.

Agents also help negotiate solutions to conflicts between you and your publisher. They push for timely payment of advances and royalties. They keep accurate records of your sales. Some agents are also lawyers, or have lawyers in their company, and can review alleged abuses by a publisher, alert a writer to possible problems stemming from something he is about to publish, and act as a knowledgeable go-between for the writer. Some agents act as middleman by finding the right author to write a book on an idea an editor or publisher has.

Should you attempt to publish your book with a traditional book publisher? Even if you manage to get an editor’s okay, you may want to consider getting an agent to handle the contract. Book contracts can be sticky business. In fact, some publishers have been known to send outrageous contracts to beginning writers, who don’t know any better. Book contracts can be 30 pages or more with lots of fine print—important fine print that if not read correctly and dealt with could end up costing you a lot of money in lost subsidiary rights and even fees. A good example is requiring you to create an index for a non-fiction book—something you’ll end up paying for out of your advance.

And while it’s possible to sell a book on your own, you may end up spending a large part of your time doing so—time you could have spent actually writing. It’s for this reason that an agent’s 10 percent is often worth it.

Do You Need an Agent?

It’s true, a writer gains a certain amount of prestige by having an agent. But before you go there, you need to pay your dues. And an agent can’t help you with that. It’s all up to you.

An agent is for a writer who is too busy to sell his or her work. And even if you have time to market your writing, an agent can seek out better paying markets for you. But having an agent doesn’t guarantee that you’ll get more money or that you’ll even get published. So if you’re a beginning writer, forget about getting an agent and get to work.

If you’ve been writing and publishing for a while, this may be the time for you to seek out the services of an agent. But do you really know what an agent can do for you?

A good agent knows which publishing houses are in the market for what sort of book or writing project. They know which publisher will pay which advance and whether, when the time comes, which will release which rights. Often an agent will know just who to send a proposal to and which ones are likely to go forward with it.

A good agent also is in constant touch with those who buy ideas, books, movie treatments, scripts for TV shows, and subsidiary rights. To many writers, an agent is also their best friend and professional confidant—part father, part salesman, part lawyer, and part literary critic. But most of all, an agent can lend a sympathetic ear. He or she understands how a writer feels.

Agents save editors time and money. They save them the hassle of going through piles of terrible manuscripts by directing them to the good ones. In essence, an agent acts as the first reader—as a person who has the experience to tell the great from the terrible. And then, of course, there’s the growing tendency for publishers to refuse to read anything that comes in unsolicited. They often give preference to material coming from an agent to manuscripts that come in cold.

Generally, while agents negotiate book contracts and subsidiary rights, they also negotiate lots of other deals for busy writers—deals that the writer may never have thought of. Depending on the arrangement you make, your agent may handle all of your work, only your books, or only certain kinds of writing. Some agents will tell you up front what they will and won’t deal with.

Agents usually don’t handle short pieces of writing like articles and short stories. They’re in it for the big bucks. Let’s face it, after you’d pay an agent his or her 10-15 percent commission, you’d be left with much less than if you sold your shorter pieces yourself.

Your agent can also act to resolve conflicts between you and your publisher. They push for timely advances—they don’t get paid until you do. And, more importantly, they’ll help you sort out hard-to-read book contracts which if not understood properly can cost you dearly.

So do you need an agent? Yes and no. Writers sell nearly a third of all literary works by themselves, without the help of an agent. By negotiating your own contract, you may just walk away with more money and more perks. But that’s only after you’ve been in the business awhile and understand the nuances of contractual agreements. An agent can help you wade through the contractual mindfield. They know what to look for and you don’t.

Royalties Don’t Always Amount to a Kingly Sum

It seems every writer wants to write a book. While writing one may give you a great ego boost, it probably won’t make you rich. In fact, it will probably pay less in the long run than shorter writing projects. Income from books traditionally comes from royalties. But understanding royalties in today’s market can be difficult.

Besides negotiating for an advance, you'll be negotiating for royalties on your book or a percentage of the retail price of the number of copies of your book sold by the publisher. The publisher adds the amount of the percentage to your book contract after the two of you agree to it.

Traditionally, the escalating royalty schedule for adult hardcover books has been 10 percent for the first 5,000 copies sold, escalating to 12 percent for the next 5,000, and then to15 percent for all copies sold after that.

The traditional practice was to compute these royalty rates and the author's earnings from the list price of all copies sold. So if sales totaled 3,000 copies at a $20 list price and a 10 percent rate, your royalty earnings would be $6,000. However, times have changed.

Today, publishers have a number of different distribution outlets open to them, some of which are through  chains of bookstores and other outlets to which the publisher sells your book for less than the list price. As a result, some standard contracts now provide that your royalties will be computed on net proceeds from the sale of the book rather than the number of copies sold—the money that the publisher collects after deducting costs for shipping, distribution, and miscellaneous services, generally about half the cover price. Though such contracts aren’t necessarily bad for you, nevertheless you should be wary of them.

Your contract may also contain a second set of royalty rates for "Special Discount Sales” to Amazon, Barnes & Noble, and such.  These percentages are usually half what the full royalty pays—if your full royalty pays 10, 12, and 15 percent, your special discount royalty might be 5, 6, and 7 percent. This scale will apply to "sales made at a discount greater than 58 percent, but not more than 75 percent of suggested retail price. And let’s face it, many more readers purchase books online, so that will lower your royalties substantially.


But the larger volume of sales made possible by wholesale deals may more than compensate for a smaller earning per copy. The important thing is to read carefully and fully understand what your contract actually provides and negotiate from that basis without illusions or misunderstandings about what you have agreed to. Today, there are wide range of royalty arrangements for books, and knowing that, you need to balance your idea of the book's potential against the mathematical results.

The best way to do this is to compute what you’d earn in various hypothetical cases if your royalty was based on list price, weigh that against earnings on net in the same cases, then decide from your result what you want to try for as far as royalties are concerned. You may want to ask your editor to give you  figures based on the publishing house’s sales department's projections.

Royalty rates for paperbacks may differ slightly from hard backs. Normally, they range from 5 to 20 percent, with 10 percent more common. But escalation rates are less standardized than for hardcover books and therefore require more negotiation. Don’t assume that because marketing techniques are different with paperbacks, escalation clauses are negligible. While a paperback publisher may count on selling what he can of his first print run—say from 100,000 to 250,000 copies—and then drop the book from his list, it just as often happens that after a number of years, he may reissue the book with another  large printing. You deserve a greater share of the profits from the reissued book and should have it provided for in the original contract.

Unlike trade-book publishers, those who publish textbooks can more accurately forecast sales. They base negotiation and contracts on previous experience with relatively stable school markets, so there's usually less flexibility in dealing with them. It's also easier to predict what you'll make for your work, so the whole process of contracting is less stressful.

Textbooks have a relatively fixed market, depending on the subject and the number and kind of schools in which they may be used. The competition from comparable texts is easier to identify than with trade books. A textbook publisher usually plans to market his books over a number of years.

By using simple calculations, you can work out the potential advantages of various royalty arrangements which might be acceptable to your publisher. Obviously, a text with a chance for a nice share of the national high school market for 10 years will call for different royalty arrangements than one which will be used only by special students or scholars for say 20 years, Thus, a typical college literature book, published in paperback, pays a royalty of 8 percent of 80 percent of list price on copies sold.

So if your book doesn’t have the potential to sell a lot of copies, you better negotiate for a reasonable advance and take the money and run because you’ll never see any additional funds from royalties, no matter how much you negotiate for them.

Payment in Advance

As a freelance writer, there aren’t many opportunities to get paid in advance. Book writing is about the only one.

The advance is the money a publisher pays you for the time and effort put into the writing of a book. Traditionally, the advance has been perceived as a loan made by the publisher to you to keep you alive and producing until the royalties from your book begin to come in—at which time the publisher will recoup his or her loan by withholding the amount of the advance from your share of the royalties.

The advance also reflects the book’s potential for sales. The better the potential, the bigger the advance. If the book has a smaller target readership, then the publisher will offer a lower advance. In this case, there’s no way you can live on just the advance while writing the book. It’s important to remember that during your negotiations.

In the case of many books, where the royalties don’t amount to as much as the advance, the advance serves as an out-right purchase price by the publisher. So it’s important to negotiate for an advance which represents either a fair return for your labor as a writer or the best return you can reasonably expect since you most probably won’t see any more money. When negotiating your advance, point out that the publisher is going to get a far better book if you’re free from money worries and can concentrate on your work.

Some publishers will tell you their advance is small because they expect to invest heavily in promoting the book and that, therefore, you’ll be money ahead in the long run if the contract promises larger than usual royalties to make up for the skimpy front money. But in reality, publishers aren’t doing much promotion today, especially small ones. That means you’ll be out begging people to buy your book just to make up the difference between your advance and your royalties.

Today, publishers sell many of their books wholesale to book distributors, so the royalties from them amount to only a fraction of what you’d receive from retail sales. And competition from the digital book market clouds the situation further.

Your publisher may try to recover all or part of your advance when, for any reason, he or she chooses not to issue a book. Yes, after all the work you put into your book, it just may not get published. Perhaps the market for that topic collapsed or there’s a downturn in the economy. This is clearly unfair if you have kept your part of the bargain faithfully. So, at a minimum, make sure that the language of the contract shelters you against recovery attempts. If you deliver your work on time in the form and content specified, you have every right to the advance money.

Book contracts can be very confusing. Make sure that there are no penalties for not meeting your deadline. So safeguard your advance by making sure the contractual deadline gives you enough time to meet all your obligations.

The book advance isn’t the only way you can finance your book project. You should also consider possible perks like expenses. How will you pay extra costs for travel, extensive research, artwork, photographs, charts, computer printouts, periodicals, books, photocopying, researchers, or secretarial help?

Your publisher will expect you to cover most of these expenses, so it's up to you to ask for help. Will the editor send you books for research that she has on hand? Ask for anything that would help. It can't hurt to try. But ask early. Realize there are limitations. Give your editor time to justify your expenses with the editorial board. Some publishers regularly agree to such arrangements with authors, others seldom if ever. And keep in mind that it's sometimes easier for an editor to justify such expenses as these than a more sizable advance, especially for new writers.