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.

Dreams of an Indie Author

With the advent of digital book publishing, many beginning writers think that all they have to do is write a book and readers will rush to Amazon to buy it. Today’s indie (independent) authors have realized the sad fact that books don’t sell themselves.

Even when writers relied on print book publishers to get their books to market, the percentage of those who earned enough from royalties to make a living at book writing was relatively low. True, though royalty percentages have increased from lows of 8-10 percent of a book’s price—sometimes the net price (the amount paid by wholesalers)— to 50 percent for ebooks, the chances that they would have earned their advances were slim. While bestselling authors can make a killing—for example the author of the Harry Potter books—most only scrape by.

When writers had books published by big-name publishers, they assumed that their publisher would help promote their books. In recent years, publishers promoted most books less and less, leaving that up to the authors. Indie authors, on the other hand, must not only write their books, but promote them as well. Some spend twice as much time on promoting their books as they did writing them.

Before getting depressed and deciding not to write that book you’ve been planning, let’s take a moment to look at what you need to do to make it a success.

Write for  your readers, not yourself. While you may be writing a book on a subject that’s near and dear to you, chances are that it won’t be near and dear to your readers. Beginning writers often ignore that the reader’s interest is the most important part of the writing process. Whatever you write about, you must relate it to your readers in order for them to react to and enjoy it.

If you’re writing a memoir, don’t assume your story is of any interest to anyone but yourself, your family and your friends. Unless you are an A-list celebrity or have done something truly extraordinary that makes a stranger’s jaw drop, readers won’t buy your book.

Be sure to have someone else edit your book. Editing a book is an important part of the process, but it’s not something you can or should do. An editor sees your book with fresh eyes, not only to pinpoint grammatical problems but also problems with content and order. Find a someone who edits books rather then giving it to a friend to look over.

Start promoting on social media at least six months before you plan to launch your book. You’ll need to spend several hours each day on social media interacting with fans, building rapport by providing interesting content. Tease them with short excerpts and little-known facts about your subject. Above all, learn all you can about marketing and promotion.

Avoid writing about trending subjects. While it’s great to write about a subject that’s trending on social media, by the time you actually get your book finished, it probably won’t be trending anymore.

Don’t plan on earning a living from indie writing anytime soon. Print publishers are paying out shrinking advances, and many are only purchasing one book a year from each writer. Agents take 15 percent of that and the IRS takes 20-30 percent. What you’re left with isn’t much. In fact, indie writers without some additional sources of income will find making a living a challenge.

All Neatly Wrapped Up

I’m sure you’ve seen the piles of books on the discount tables in bookshops. Perhaps you’ve bought a few dozen copies over the last few years.

Some of these, while they have an author or several listed, just don’t seem like the kind of books a writer might come up with. You know the kind—diet books, coffee table books, health books, travel guides. Well, you’re right. They aren’t.

These types of books most likely resulted from a book package assembled by what’s known as a “book packager.” All are non-fiction and many are part of a series.

So what is a book packager? Instead of a writer coming up with an idea, a third party either creates the idea for a book or gets it from a publisher looking to produce a book on a particular subject to compete with other houses publishing books on the same subject. For instance, ever publisher of travel books wants to have at least one on Mexico, even if duplicates what the competition has on the shelves.

The book packager acts much like a film producer, thinking up the idea, hiring a writer or writers, finding a publisher, and often hiring illustrators, photographers, indexers, cover designers, and the like. In other words, the packager produces the whole package.

Publishers like to work with packagers because the latter does most of the work of producing a book. The publisher also gets exactly what he or she wants and doesn’t have to waste time shopping around.

Sometimes, publishers act as their own packagers, then shop the book package around to agents who find a writer or writers.

So what’s the advantage of working with a book packager? For one thing, you don’t have to go through the agonizing frustration of trying to sell a book idea to a publisher. The idea has already been sold and approved. All you need to do is agree to write it.

But there is a catch. In order to work with book packagers, you have to have been published already—usually a book or two, plus lots of articles—and on in a particular subject area.

Book packagers are business people who look for writers who specialize in a particular subject area. They want a writer who knows a subject well enough and has enough contacts to get right into the project and not have to learn all the basics. They also want a writer who knows how to write a book—someone who has been through the process before. Deadlines for book package projects are notoriously tight—sometimes as little as 10 weeks. There’s no diddling here. Newbies need not apply.

Payment is often work for hire. In other words, you get paid a specified amount for the entire project, paid in three or four installments. This often works out better than if you sent in a book idea, got it approved, and got paid royalties. Most writers never see any additional money beyond their advance. All you have to do is write the book and do a final edit on the galleys. It’s up to the publisher and/or packager to promote the book. Often the publisher doesn’t care how many copies sell as long as he or she maintains a presence on the book store shelf alongside the competition.

If you think you might be interested in giving this a try, you’ll have to make yourself known. That means promoting yourself and your work through whatever means possible. The more well know you are in a particular subject field, the more likely book packagers will come to you.

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.

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.

Just How Much Can You Make on Book Royalties?

Many of you writing wannabees on the outside of publishing most likely entertain the idea that all authors get rich, based on the handsome advances and royalties paid to some of the top stars. Unfortunately, that is far from the truth. In fact, the average percentage of royalties hasn’t changed since before the 1980s! Can you think of anyone whose salary hasn’t gone up at least a little in all that time. Even those earning minimum wage get a hike every once in a while.

So what is this elusive thing called a royalty? Essentially, a royalty is a sum paid for the use of a patent or to an author or composer for each copy of a work sold or for each public performance. Sounds easy enough, but it’s far from it.

First, royalties are basically a percentage of the retail price of books actually sold by the publisher. And in today’s market where booksellers can return unsold books for a refund, the amount a writer actually gets can be quite puny. Currently, the author of an adult hardcover book can expect to receive a 10-12.5 percent royalty for the first 5,000-10,000 copies sold. Big name authors might receive 15 percent based on increased sales volume. If you're negotiating a deal for a paperback, you’ll most likely receive 5-10 percent, with 10 percent more common.

Traditionally, publishers computed royalty rates and the author's earnings from the list price of all copies sold. Thus, if they sold 2,500 copies of a book listed at $15, the author's royalty earnings would be $3,750.  However, some publishers sell books at less than list price through chains of bookstores, supermarkets, and other outlets. As a result, they compute royalties on net proceeds from book sales rather than the number of copies sold. Then again, the larger volume of wholesale sales may compensate for a smaller per copy earning.

Try this. Compute what you would earn if your publisher paid you a royalty based on the list price of your book. Compare that to your royalty earnings the net amount many publishers today use. Then decide if it’s worth negotiating for a higher royalty rate or a higher advance.

Publishers usually pay authors advances against future royalties. How do you figure how much money you might earn from your book? For this you need to study the market for it, rather than take out your calculator. If the subject of your book is a hot one and potentially lots of readers will buy it, then you should negotiate a higher royalty percentage against future sales. However, if the subject is one that may not attract lots of readers, then you should negotiate for a higher advance.

An advance is an up-front payment against which royalties are set. If you fulfill your part of the contact—that is write the book as ordered—then you don’t have to refund it. If your book sells poorly, you’re ahead. And if your book sells well, you ahead based on the amount you’ll get in royalties after you have earned enough to make up the advance. Most beginning authors get three or four-figure advances. So don’t think you’ve hit the big time just because a publisher says her or she will publish your book.

There’s Something to be Said About Working for Hire?

If you’ve been writing for very long and have tried to get published, you may have come across a phrase that has been tossed around for quite a while–“working for hire.” Some in the writing biz see this as the Big Bad Wolf of publishing, warning newbies off of it’s temptations from the beginning. The nay sayers say that when you work for hire, you forfeit all your rights to your work. That’s true. But what they don’t tell you is that you also get paid a chunk of money for what you do, sometimes far more than you could ever earn when writing for royalities. This is how it works.

If you’re writing articles, you need to study the situation before deciding if working for hire is for you. It all depends on what type of article you’re writing. If it’s one with a limited market–say, about a particular business in one city–then the possibilities of you selling that article again are slim. So in this case you should take the money and run.

On the other hand, if your article is about a topic that’s hot and applies to several writing markets–the places where you sell your writing–then you shouldn’t work for hire because you have a potential for making a lot more money in the future from that article.

If you’re writing short fiction, then the market is wide open–what paying markets there are for these–so, again, you shouldn’t work for hire because you should be able to sell that story again and again.

The same applies to books although on a much larger scale. For non-fiction books, it all depends on the subject matter of the book and the demand there is for it by readers. If you’ve written a book that has limited sales appeal and someone offers you $5,000 to write it, chances are that you’ll make more by accepting the $5,000 as a work for hire agreement than you ever would with royalties. A book has to sell a LOT of copies for you to make anything from it beyond the advance because you first have to pay off the advance with the percentage you get for each copy sold. This can take a long time.

Novels are another story. In most cases, publishers only pay an advance with royalties for them, so working for hire doesn’t enter into the picture.

Whatever you decide to do, weigh your options first. Will that book you’re writing really sell and pay you beyond your advance, or would it be better to take the $5,000-10,000 you’re offered to write it and live comfortably. Regardless of what the ivory tower literary types think, writing isn’t about starving.