What others are saying about
Dollars and Sense for Writers:
A Guide to Managing Your Writing Business
“Dollars and Sense for Writers is a solid, no-nonsense guide to the business side of writing - from working with agents to keeping proper financial records and registering one's business, to marketing, year-end business review and more. Peppered with helpful checklists, Dollars and Sense for Writers is an easy-to-understand and useful guide…Highly recommended.”
- Midwest Book Reviews
“There is more to being a writer than being creative. For writers who want to sell their wares, this handbook will guide them from contract to marketing to sales with business practices for writers.”
- Writer’s Journal
Dollars & Sense for Writers:
A Guide to Managing Your Writing Business
Linda Mickey
Published by:
Finish Off Press Ltd. at Smashwords
Copyright © 2010 Linda Mickey
This book is also available in print.
Smashwords Edition, License Notes
This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each person. If you are reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwods.com and purchase your own copy. Thank you for respecting the hard work of this author.
ACKNOWLEDGEMENT
To Amy Alessia and Susan Gibberman. This book would never have happened without your inspiration, encouragement, and enthusiasm.
Additional appreciation is extended to Sandra Burkett, CPA,MST and Carol Hannigan, Attorney at Law, who provided expert counsel and reviewed the material for technical accuracy.
WARNING & DISCLAIMER: The Legal Stuff
This publication contains the opinions and ideas of the author. The intent is to provide information and entertainment. This book is sold with the understanding that the author and the publisher do not render legal, financial, or any other professional services. If the reader needs personal assistance or advice, a competent professional should be consulted.
The author and the publisher specifically disclaim any responsibility for any liability, loss or risk, personal or otherwise, which is incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this book.
It is not possible to put all the facts about writing, business, and publishing into one book. This manuscript is a general guide and overview. The objective is to spur the reader to obtain additional information through the many other available sources.
TABLE OF CONTENTS
INTRODUCTION
CHAPTER ONE: LOOKING IN THE MIRROR
Writing and Business Goals Checklist
CHAPTER TWO: ENTERING THE PUBLISHING MAZE
CHAPTER THREE: WORKING WITH AGENTS
Understanding Advances, Royalties, and Payments
CHAPTER FIVE: ABOUT THE NUMBERS
CHAPTER SEVEN: GIVING THE DEVIL HIS DUE
Register Your Business Checklist
CHAPTER EIGHT: THE BUSINESS OF BUSINESS
Sample Business Plan for Writers and Publishers
Writers Groups and Organizations
Evaluation Checklist for Writers Groups and Organizations
Evaluation Checklist for Attending a Conference
CHAPTER TEN: TUNING UP YOUR BUSINESS
The Annual Business Review: Guidelines and Questions
BIBLIOGRAPHY
INTRODUCTION
Does this sound familiar?
My fabulous first novel gets picked up immediately by the best agent in New York. Then a publisher buys the manuscript for a fantastic sum that makes headlines in Publisher’s Weekly. After that, Brad Pitt options the film rights and my book makes it to #1 on the New York Times Best Seller List. I become both a commercial and critical success.
As you can see, I had it all planned. Of course, that is not what happened. Instead, I bumped into the business side of writing.
When my first book was released, I knew almost nothing about the publishing business. Although I did not expect the national retail chains to stock my novel, I naively thought that independent bookstores would be delighted to carry a mystery by an exciting new author. I spent many hours and quite a few dollars preparing and sending out an amateurish press kit.
What did I get for my effort? Nothing.
I had not done my homework and did not understand the industry. Being new additions to the mystery genre did not automatically make my characters and plot special. I didn’t realize that I was competing for shelf space with the approximately 2,000 other mysteries also published in 2002.
But wait, you say to me.
Writers are warmly creative even when writing about something that is coldly logical. Breathing life into words is imaginative and inventive. Writers resemble Claude Monet more than Isaac Newton. Writing, you insist, is right brain stuff.
That is partly true. Writing is certainly an art and a craft.
However, the minute I decided to take payment for my work, writing became a business. So fair warning to anyone who thinks they want to earn money as a writer – there is a lot more to it than the artistic effort.
Many believe that the hardest part of being a writer is arranging words into poetic phrases or dynamic sentences that people will want to read or speak. My own experience, plus the questions posed at my writing workshops and author appearances, taught me the business side of our creative endeavor is just as important. Unfortunately, the idea that they are running a business seems counter-intuitive to most writers.
My colleagues often say managing their writing business is more difficult than the act of writing. I agree with them. But, like it or not, we exist in a world requiring us to wear two hats: artist and entrepreneur. Both demand our full attention and focus if we want to be profitable. When we are not creating, we must make sales calls, hire vendors, and do bookkeeping.
You didn’t know that, did you?
If the mere mention of business makes you anxious, don’t fret. Acting business-like means being organized and attentive to those things that help us achieve our goals. Writers who address their business as a business seem to be happier and better equipped to adjust to the rapidly changing industry we call publishing.
The original idea for Dollars & Sense for Writers was born at a convention for mystery writers and fans. Two writer-librarians and I took a break for coffee. The conversation eventually got around to the publishing industry, as it always does when writers get together. My colleagues suggested that a handbook about the business would be extremely useful and they urged me to write it. The information here is their request brought to fruition and represents the culmination of conversations with writers, loads of research, plus years of business and personal experience.
Dollars & Sense for Writers is a guide that highlights information you need to have in order to cope with this industry and your role as a business manager. It is a tool; one of many you need on your workbench as you build your writing business.
If you are already published:
Examine the portions of this handbook that best address your current need. At some point, I recommend you evaluate your goals, the contracts you have in force, and your relationship with your existing vendors and clients. Periodic examination and review are important aspects of running a business.
If you are not yet published:
I encourage you to begin with Chapter One. After you pinpoint the goals that are important to you and the skills you possess, you can develop your writing business with those objectives and capabilities in mind.
In addition to the checklists and suggestions included here, you will find quotes about business and the business of writing from others, all of whom are writers apart from any other occupation they have or had. I hope they inspire and encourage you as they have me.
Drive thy business or it will drive thee. - Benjamin Franklin
I wish you joy – in your writing and in your business.
CHAPTER ONE: LOOKING IN THE MIRROR
Please don’t confuse writing with publishing. Publishing is not about writing. It's about making a product (a book, a magazine, a newspaper), marketing that product so that people are willing to pay money for it, and then selling that product for a profit.
As a writer, I create a product comprised of words. If I then decide to have it published, I am automatically involved in the publishing business as my product enters the marketplace with thousands of similar products all competing for buyers.
The creative person basically has two kinds of jobs: One is the sexy, creative kind. Second is the kind that pays the bills. – Hugh Macleod
It is the idea that they are going into business that is the biggest surprise to most writers. There is no warning about what we will face. Writing classes concentrate on technique and craft, not on contract negotiation and bookkeeping. I know talented writers whose enthusiasm for their art faded like the sun at dusk because of the problems they encountered with the business side of writing. I don’t want this to happen to you. Although it is hard work, I enjoy my business and want you to do the same.
Knowing my goals and capabilities is part of the reason I remain relatively sane while functioning inside the crazy publishing industry. Understanding who I am, who I want to become, and what I am capable of doing resulted from addressing the mistakes I alluded to in the introduction. Once I accepted that business is business, even if it’s an artistic one, I began to understand what to do. The first step was to answer all the questions I had to ask myself. I pose those same questions to you in the checklists included with this chapter.
The checklists are for self-examination. This specific, focused personal appraisal and feasibility study is designed to help you develop an understanding of yourself and your goals so you can plan your business.
There are three lists: Writing and Business Goals, Key Skills and Things I Need to Consider. Tackle one list at a time, giving careful consideration to each point. Your responses may require research or reflection. For example, there is a statement about having an appropriate place to run your business. This is not necessarily the same as your favorite spot to write. I know many writers who create while curled up like a cat in their favorite chair at the local coffee house. That location is not where they conduct their business.
As you perform this personal assessment:
Approach the statements from a business perspective
Address each point honestly
Consult with friends or others who run small businesses
Remember – you are examining the business of writing, not the creative process. If you do not have your personal financial situation clearly defined, do it now. Make a list of your assets, your debts and be aware of how you spend your money each month. This information will be needed in order to address some of the statements on the checklists and the data will be necessary for Chapter Eight: The Business of Business.
You may be tempted to skip this self-examination process and jump ahead to other chapters. I sympathize; however, if you are new to the writing business, an up-front analysis is worth the time investment. In addition, future chapters of this book will refer you back to answers you gave on these lists.
These evaluations may also lead to some intriguing personal discoveries. It happened to me. Each person’s definition of success is unique. Therefore, their business goals are as well. I learned that the point at which I considered myself a success was quite different from objectives other writers set for themselves.
The same is true for the skills each writer already possesses and what approach each must consider as they set up their business. For example, the full-time writer who wants her title to be on bookstore shelves will do things differently than the one who is supplementing his law practice with a self-published guide intended for his clients or the freelancer who writes at night while attending classes during the day.
When I made the decision about what form of publishing for my first novel would be best, I was often chastised for considering anything other than the traditional path. Many warned me that I would never be successful unless I got an agent and was published by a major New York company. Those words were troubling until I realized that I was succumbing to someone else’s definition of success. I had to come to terms with myself and with the publishing industry. It was that process that gave birth to the analysis included in this chapter.
I have never regretted my decision. Establishing my own goals was illuminating and immensely beneficial. Knowing what I want and how I define success keeps me focused. I concentrate on my objectives instead of on goals others try to set for me. This helps me resist spending time or money on things that will not improve my business.
A successful life is one that is lived through understanding and pursuing one’s own path, not chasing after the dreams of others. - Chin-Ning Chu, Motivational speaker
Four hundred years ago, Shakespeare told us to be true to ourselves. Countless others have offered similar advice. I do not possess the eloquence of William Shakespeare but I can tell you that understanding my goals and my skills allowed me to make decisions that were best for me. Looking inward as you prepare to build your business is a process that will benefit you, too.
When you complete the statement lists, move on to the analysis at the end of this chapter.
Writing and Business Goals Checklist
I want to be on bookstore shelves: Y or N
I want my books to be audio books: Y or N
The New York Times Best Seller List is my goal: Y or N
All of my income should be from writing sales: Y or N
I want to get rich from my writing: Y or N
Writing will supplement my other endeavors: Y or N
I want to be famous for my writing: Y or N
I want to move to LA to write screenplays: Y or N
I want to move to New York to write stage plays: Y or N
I want to cut out the middlemen: Y or N
I want to run my own company: Y or N
I want to retain the print rights to my work: Y or N
I want to maintain my independence: Y or N
I want to have editorial or cover design control: Y or N
I want to produce a book for my family & friends: Y or N
I enjoy and want to make public appearances: Y or N
I can travel out of state for promotion or research: Y or N
I have a suitable spot in my home to run my business: Y or N
I have an accountant and an attorney: Y or N
I am able to pay for advertising & promotion: Y or N
I have a completed work or am already published: Y or N
I do not need supervision and can work alone: Y or N
I am able to write to deadline: Y or N
I don’t mind rewriting to an editor’s requirements: Y or N
My written work is digital; the files can be uploaded: Y or N
I am not otherwise employed: Y or N
I am employed and have considered my schedule: Y or N
I am able to hire an independent, freelance editor: Y or N
I am excited by the challenge of running a business: Y or N
I fully understand my financial situation: Y or N
I already run my own business: Y or N
My full time employer has rights to work I create: Y or N
I am comfortable speaking in front of an audience: Y or N
I can design my own Web site: Y or N
I am comfortable with design software: Y or N
I can design my own collateral materials: Y or N
I can plan an ad campaign Y or N
I can write a press release: Y or N
I can manage and track my income and expenses: Y or N
I am comfortable with bookkeeping software: Y or N
I read every word of every contract I sign: Y or N
I understand the basics of the publishing business: Y or N
I am not afraid to ask questions: Y or N
I am well-organized and detail-minded: Y or N
Define your business goals clearly so others can see them as you do. – George F. Burns, Comedian
Now that you have completed the previous three checklists, review your responses. At first glance, what do your selections reveal? Did any of your answers surprise you? Let’s examine the lists individually.
Writing and Business Goals
This checklist helps you identify your ultimate goal as a writer and your desire (or not) to control all aspects of your business. It is the most important list in this handbook because it involves your aspirations and how you define your success as a writer. All subsequent business decisions should be made based on your responses to the statements on this list.
Answers are neither right nor wrong. This is all about what is most important to you. Or what is least important. If you discover conflicts, go back and prioritize.
For many writers, simply earning a living from their writing is enough. For others, however, success is not achieved unless they become nationally-known columnists or screenwriters for A-list movie producers.
Notice that some of the statements go well together and some do not. For example, many writers earn all their income from the sale of their work but they are not rich. Some writers make it to the New York Times Best Seller List but they are not famous.
The Writing and Business Goals checklist includes statements about control and how much you insist on having. It is also about consequences.
If you cut out the middleman, an agent won’t be representing you. If an agent does not represent you, your novel will not be published by one of the major New York companies and probably will not be on the shelf in the major chain bookstores.
The same is true if you insist on retaining ownership of your print rights because that is what most publishers buy – the right to print your work (See Chapter Four: The Dotted Line). To retain your print rights, you must self-publish in one form or another. Employed full time? Will your current employer own the rights to anything you write in your spare time?
The publishing industry is changing. So will your life circumstances. You may need to amend your goals in the future based on what becomes newly possible and what options no longer exist.
Things to Consider
Unless a rich relative recently left you a million-dollar bequest in a will or you have a winning lottery ticket in your safe deposit box, it is doubtful you will be able to quit your day job. If that is your goal, there are three essentials to consider when contemplating writing full time. They are:
Personal finances
Assignment or publication frequency
Contract and deadline obligations
If you are writing on spec or as a freelancer, how often are you selling your work or getting assignments? If you are writing books, will you receive an advance from your publisher and, if so, how long can you live on it? (Keep in mind that the advance will probably be paid in increments as you meet your submission deadlines.)
What is your financial situation? How much money do you need each month to meet obligations such as rent or mortgage and utilities? Do others depend on your income? Notice I didn’t include food. How literally are you living the starving artist label? How much money will you need to market your work or go on promotional tours? In other words, do you know what it will cost you to become a full time writer?
To evaluate income possibilities from writing, read and review the section of this book titled Do the Math. For those writing on spec or assignment, as ghostwriters or freelancers, give careful consideration to the fees you can realistically expect to receive and when you will receive them. These fees are paid by the word or as a flat rate and are usually re-negotiated for each new article, short story or assignment. Some publications pay on acceptance; others on publication. There can be months of difference between those two dates. That will have an important impact on your personal cash flow.
Now let’s address expenses. Because you are running a business, many expenses are tax deductible. However, you must pay those expenses out-of-pocket before you can deduct them on your tax return. If you are like many writers, you will squeeze your business expenses out of whatever income source you currently have. Consequently, you will have to make choices and some of them may be difficult. Do you fly to Boston for that writers’ conference or do you pay the rent?
Review your current income and expenses. Determine what you are willing to give up and what you can afford to spend on your business. How much help and support will you get from your spouse or family? After you use up your vacation time, how many unpaid days off will your employer allow? How many can you afford to take?
In addition to finances, some statements on the Things to Consider checklist concern advertising and marketing. Think about their application to you personally. For example: someone who cannot travel out of state will not be able to do a multi-city book tour. A freelance writer may not need a publicist. The writer who has few constraints on his or her budget can take a different approach to marketing than someone who has limited funds.
Key Skills
Do what you can, with what you have, where you are. - Theodore Roosevelt, 26th President of the United States
This list can indicate when you, as business owner, need to hire vendors and what things you feel able to perform unaided. Think about whether or not the savings obtained by doing certain tasks yourself are offset by the loss of time devoted to other endeavors. Does the money you save by designing your own Web site make up for the writing time lost? Can you plan an ad campaign? If you can, how much time will that take and should you pay someone else to do it for you so you can spend the time writing?
Skills can influence goals. Not comfortable making public appearances? You must either adapt or write something that does not rely on personal promotion to induce sales. No knowledge of design software? You will need to learn it or hire a graphic artist.
After this introspection, you may decide that you have no interest in running a business; however you do want to produce a book for family and friends. In that case, supported self-publishing is perfect for you. There are many companies that offer it in one form or another and at minimal or no cost.
Be sure to read the contracts just as carefully as if you were in business. Also, double-check the submission requirements. Some of these companies will not accept handwritten or hard-copy manuscripts. Others want submissions in software formats not generally owned by the average computer user. Make sure the publisher will accept files in your format.
If you still want to pursue a writing business, you should have a product to sell. Written work is the next step. If you are authoring work that will be published in book format, you must decide how to get it into print. Those options are explained in Chapter Two. If your work is produced in other formats, feel free to skip to Chapter Three.
CHAPTER TWO: ENTERING THE PUBLISHING MAZE
I had many illusions about publishing and made a lot of mistakes trying to force the industry to be what I wanted it to be - Doug M. Cummings
Short pieces written for print in newspapers, periodicals or anthologies do not offer you many entrepreneurial choices unless you plan to start your own publication. If you are a freelance writer, the publishing medium may change (newspaper, magazine, Web site), but the process remains one of selling the work to an editor for future publication. Only the book format gives the writer the variety of publishing options discussed in detail in this chapter. If this does not apply to you, feel free to jump forward to Chapter Three.
Not so long ago, publications (books, magazines, newspapers) appeared primarily on paper. Now distributing the written word includes the Internet and other digital formats including DVD, CD, e-books and MP3. Writing is sold in places unheard of five years ago and will sell in as yet undeveloped places five years from now. Although I still read a book a week, it is frequently an audio book. At first, my audio books were cassette tapes and I listened on a Walkman or used the cassette player in the car. Today, I download audio books to an MP3 player or listen to books on CD.
Books are more accessible. So, too, is publishing. Before the advent of digital technology, authors had two publishing options. They either sold their work to a publisher or they self-published.
Self-publishing was a costly proposition. The self-published author could anticipate spending more than $25,000 on book production, distribution, and marketing. Consequently few writers gave it serious consideration no matter how much they wished to retain control over the entire process.
The majority of authors followed what the industry calls the “traditional” route to publication and if they were not successful attracting an agent or a publisher, they rarely got into print. In the mid-1990’s, evolution in reproduction technology and the popularization of the Internet brought publishing to the masses and changed the industry forever.
As with all such advances, there are good and bad things associated with it. The Internet brings us a wealth of information with a few key strokes; however; some of what we find is false or even dangerous. Research is easier but we cannot assume all the data is correct.
In publishing, reproduction technology improvement fostered its own pros and cons. In the positive column: Writers who want to be in print can be. Self-publishing is a realistic and affordable option. Exciting new authors are finding an audience. On the negative side: These digital advances allow publishing companies to keep rights in perpetuity because one thousand pages can be stored in less space than that required by a postage stamp. Inexpensive self-publishing options allow writers to pollute the market with sub-standard work.
So, what to do? Use the self-assessments from Chapter One and the comparative descriptions that follow to determine which type of book publishing is best for you. Then examine and evaluate the pluses and minuses of each option, considering how the selection of a publishing method will affect your business plans and goals. Visit the Web sites of various publishers and read them thoroughly. Talk to other writers. Find out what they liked or didn’t like about the publishing method(s) they used.
If you are fiercely independent and want to control every aspect of your business, self-publishing is the best choice. Many writers earn solid livings publishing their own books. However, if you dream of seeing your book on the New York Times Best Seller List, the more traditional route will better suit your needs.
The simplest way of defining the publishing choices is that, with the exception of vanity publishing, the more money one invests, the greater the share of the income. When the author acts as publisher, the author pays for all aspects of the process and receives all of the revenue. In a more traditional arrangement, the author receives a tiny portion of the sale proceeds but also makes the smallest monetary investment directly connected to manufacturing, distributing, and marketing a saleable book.
If you do not intend to do all the work yourself, you will need an agent and/or a publisher. Think of agents and publishers as vendors. (Learn more about selecting an agent in Chapter Three and working with vendors in Chapter Eight.) Find out all you can about the individual or company before submitting your work to them. If you have published before, bear in mind that what was important for your first book may not apply to your fifth or tenth. In addition, vendors change or go out of business. The agent/publisher for your first book may not be the best choice going forward. If you have no outstanding contractual obligations, re-evaluate your options and goals with each new book you write. In addition, the publishing method appropriate for a novel may be different than what works well for non-fiction or poetry. Poets tell me the self-publishing option is best for them while the subsidy option is ideal for doctors or attorneys who supplement their practice with non-fiction guides and manuals.
The bottom line – pick the method that will produce the results you want to achieve. And remember, by the time you finish reading this chapter, a new publishing option, perfectly suited to your needs, may have developed so keep an open mind.
In preparing what follows, I discovered that defining the way a book is published is like saying something is blue. There are many shades of the same thing.
While most groups involved with book publishing agree on the meaning for the traditional and self-publishing categories, there is considerable confusion and disagreement about the definitions of the other two publishing options: vanity and subsidy. For this handbook, I use the definitions for vanity and subsidy publishing as provided by Romance Writers of America because they most closely match the terms as explained to me when I attended my first writers’ conference in 1993.
All of the changes in publishing since 1960 are significant. There are far fewer publishers. - Donald Westlake
Traditional
The rights to a work, often represented by an agent, are sold to a publisher who pays a royalty advance to the writer, prints many copies of the book (print run), arranges for distribution of the book through online sellers such as Amazon and through major distributors such as Ingram Book Group and/or Baker and Taylor, does some marketing, and pays the writer a royalty on each book sold after the advance is earned out. The publisher absorbs all the printing and distribution costs. There are mega-conglomerates with multiple imprints, university presses, and numerous small, independent publishers, all of which function in the same basic manner.
Vanity/Subsidy Publishing
This is a pay-to-publish option. Contracts and advertising from these companies often use phrases such as “joint venture” or “co-op.” The author absorbs a portion, sometimes as much as fifty-one percent, of the cost to print the book. Distribution is generally not included although advertising or the services of a publicist for a limited period of time may be.
Romance Writers of America defines it this way: “Vanity Publisher means any publisher whose authors exclusively promote and/or sell their own books and publishers whose business model and methods of publishing and distribution are primarily directed toward sales to the author, his/her relatives and/or associates.” (www.rwanational.org/cs/rita_awards/rita_entry_eligibility_information, accessed on 7/22/08).
Supported Self-Publishing/Subsidy Publishing
This is another form of pay-to-publish. Note that this option is also labeled subsidy publishing. The companies offering this service are sometimes called POD (print-on-demand) publishers because of the printing technology they use.
There is a big difference between this and the vanity option. To be considered supported self-publishing, the author must retain the rights to the work and is not required to purchase copies of the work. If print-on-demand printing is used, cost can be significantly lower than with the vanity option. Usually the author has more control in supported self-publishing.
Romance Writers of America defines subsidy publishing this way. "Subsidy Publisher means any publisher that publishes books in which the author participates in the costs of production in any manner, including publisher assessment of a fee or other costs for editing and/or distribution. This definition includes publishers who withhold or seek full or partial payment or reimbursement of publication or distribution costs before paying royalties, including payment of paper, printing, binding, production, sales or marketing costs.”
In addition to their publishing packages, many subsidy publishers offer a long list of ala carte services such as line editing and marketing for additional fees. Add-ons are as numerous as the stars on the Hollywood Boulevard Walk of Fame. Even distribution can be an add-on option.
Anyone considering supported self-publishing should carefully read the contract and evaluate packages and options. The programs and terms change often and vary substantially from one publisher to another. There are many companies from which to select and entire books have been written comparing one to another.
There are significant issues associated with this form of publishing. It is not for everyone. It is simultaneously liberating and quite restrictive.
The Plus Column
Subsidy publishing is ideal for those writers who have limited time to write or market. For example, if someone is able to actively market their work only six months out of the year, they would not produce the sales numbers a traditional publisher would require to retain that author or buy the rights to the next book. With supported self-publishing, that same author is free to do what they can, when they can.
Most traditional New York publishers want new fiction titles at a fast pace – as quickly as a manuscript every seven to nine months for series mysteries. With subsidy publishing, the writer does not have deadlines and can publish whenever he or she has a product that is ready. A few subsidy publishing companies charge nothing at all for set up. These companies make money on book printing alone. For others, the base cost is affordable for most writers. In all cases, watch out for those add-ons.
The Minus Column
Some writers see subsidy publishing as a cheap and easy short-cut to fame and fortune. The books have trite plots, questionable hypothesis, or are tell-all memoirs that offer little other than cathartic release for the author.
Most of these books have never been critiqued or examined by writers’ groups, professional editors, or proofreaders. This poor quality caused an industry backlash. Many reviewers refuse to read books published in this manner. Most retailers won’t stock them. Some professional writing organizations do not permit subsidy-published authors to become members and at some conventions, these writers are not allowed to sell their books or participate on panels.
In addition, because subsidy publishing is so affordable, the marketplace is flooded with titles and it is difficult for booksellers, libraries, and readers to make purchasing decisions. Quality is lost in the overgrown forest of the 400,000 new titles that appear annually. (Donadio, Rachel, “You’re An Author? Me, too.” (nytimes.com, April 27, 2008, accessed May 10, 2008). Consequently most reviewers and stores have made the decision to avoid any work that is not published in the traditional manner.
Self-Publishing
The author is also the publisher. The author forms a publishing company, contracts with a printer plus makes all arrangements for order fulfillment and distribution. The author, as publisher, can subcontract some or all of the processes to other companies but is in total control of things such as the final manuscript layout, cover design, list price of the book and overstock return policy. The author, as publisher, pays all the costs and gets all the revenue.
Be aware that the pros and cons that apply to subsidy publishing can also apply to those works that are fully self-published. If you want to enter contests or obtain critical appraisals of your work, read the rules or requirements carefully to see if your poetry, book or story is excluded because it is self-published.
That said, perhaps the most daunting hurdle to self-publishing is the up-front cost of producing a book that has a print run. Complete business, marketing, and financial plans will be helpful in calculating the amount of capital necessary for you to get started.
There are many reference books to guide you through the self-publishing process. I strongly urge you to read them before embarking on a self-publishing voyage. In addition, libraries, writing conventions, and community colleges may offer workshops on how to form a publishing company.
How many times have you wanted to buy a specific title and been unable to find it at your local store? Did you attempt to purchase it elsewhere, did you get something else instead, or did you give up entirely and buy nothing? Where and how writing is made available to readers will impact a writer’s ability to earn a living.
There are two words that affect us as writers. They are distribution and circulation.
Distribution is the marketing and merchandising of commodities. (Merriam-Webster Online Dictionary, retrieved August 16, 2009, http://www.merriam-webster.com/dictionary/distribution)
A distribution channel can include several levels – publisher to distributor to retailer to consumer. Each level in the channel adds to the price point of the product. A book or magazine can have national or regional distribution and may be found in local grocery stores or in national book store chains. To encourage sales, publishers may offer discounts to distributors, usually calculated as a percent off the cover price. They may also offer incentives such as special product displays or giveaways. Writers should understand the distribution channels and incentives that are part of any publishing contract under consideration.
Circulation, generally referring to periodicals, is the average number of copies that are sold in a specific period of time. For example, Southern Living magazine has an annual circulation of 533,000. (www.echo-media.com/MediaDetail.asp?IDNumber=4326, accessed August 16, 2009) This number influences advertisers who want to reach the highest number of readers for the lowest cost. It can also help a writer determine whether or not to query a certain publication with an article proposal.
All writers need readers. Readers must have access to a work in order to buy it.
Not long ago, my editor was seeking a specific magazine title. It was a niche publication and not stocked at the local chain bookstore. She finally purchased it directly from the publisher through the publisher’s Web site. The Internet is one giant distributor. Factor that in when considering distribution issues.
As one can readily tell by the number of titles on the discount tables, bookstores often make bad guesses about what will sell. They solve this problem by sending the unsold titles back to the distributor for credit and ordering new titles. This practice began during The Great Depression in the 1930’s as a way to keep new titles in struggling bookstores. Now the theory is that stacks of books will entice customers to buy. The right to return unsold copies is sacrosanct to booksellers.
Corporate buyers determine what will or won’t be available in the large chain stores. What they stock is a decision largely based on whether or not a title is returnable. In the small independent store, the return policy for a title can be a deal breaker when the bookseller is deciding what to put on the shelves.
The traditional publishing returns system is firmly entrenched; therefore writers must understand the way it works and decide how they want to deal with it. Let’s look at how the return problem affects you, the book author.
In 2003, 34% of adult books were returned to the publisher. Those titles had a wholesale value of $801 million. (Trachetenberg, Jeffrey A., Quest for Best Seller Creates a Pileup of Returned Books, Wall Street Journal, June 3, 2005). Most stores receive a fifty-percent discount from the distributor. That amounts to a retail value of more than $1 billion dollars in unsold books in 2003. Imagine the cost now. This constant and costly rotation of inventory harms the whole industry, not to mention the environment.
Outside the publishing industry, manufacturers do not routinely accept returns of unsold inventory from the retailer. The retailer is expected to manage its business so that it does not buy product that won’t sell. For example, Macy’s confessed that their New York buyers made disastrous decisions in assuming that shoppers in Illinois want the same styles as those found in New York. (Jones, Sandra M, “Macy’s shifts focus to store ‘localization’. chicagotribune.com, Friday, November 14, 2008, accessed July 10, 2009). But no matter how many unsold black suits hang on the racks in Chicago, Macy’s cannot return them all to Michael Kors or Liz Claiborne.
A quick look at the best seller lists in New York versus Los Angeles indicates that what consumers on the East Coast prefer to read does not necessarily match the books people on the West Coast are buying. The logical conclusion is that bookstores in the West should stock different titles than those in the East.
How different would the publishing industry be if bookstores were responsible for their inventory and could not return it at will? That’s hard to imagine, so we address the current reality.
You earn a royalty on the books that are sold to distributors and retailers. When those books are returned, the publisher takes back the royalty you earned on them. In order to accomplish this, a certain percentage of the royalties owed to you are held back. In other words, you do not receive all the royalties you earn when the books are initially sold. Some of what you earn is held in reserve in anticipation of future returns.
Publishers are notoriously slothful about numbers – unless they are attached to dollar signs. - Hunter S Thompson, Journalist
This “hold back” can be sizeable. Some authors never see a dime of income after the advance because, even if the author earns out the advance, any additional royalties owed go into the hold back fund and are not paid to the author. There does not seem to be a statute of limitations on returns so the publisher can retain the hold back indefinitely.
In discussing this with writer friends who are published in the traditional manner, none of them have ever received an accounting of the hold back transactions. Their semi-annual sales reports do not cover the hold back. Consequently, the author and the agent are in the dark about the number of returns and the amount of money the publisher has in the author’s hold back fund.
When you negotiate your contract, address the amount and term limit of the hold back. If you self-publish, decide if you will accept returns and remember to factor the cost of returns into your list price calculations.
CHAPTER THREE: WORKING WITH AGENTS
Agents are viewed as pariahs or saviors, depending entirely on the quality of their last deal. They are an important cog in the current publishing industry mechanism just as a realtor is central to the housing market.
I wish to be cremated. One-tenth of my ashes shall be given to my agent, as written in our contract. - Groucho Marx, Comedian
A good agent attempts to balance the needs of three separate and competing entities: the publisher, the writer and the agent. It is the agent’s job to get the best possible contract for the author while keeping negotiations and expectations realistic for the publisher. Agents who consistently gouge the publisher or short-change the writer will find doors closing or clients deserting.
Agents are vendors that perform a service on two levels. They sell a writer’s product but they also represent the writer in the marketplace. Since a publisher is not apt to meet you until the negotiations are completed (if they ever meet you), their impression of you is controlled by your agent. When making a decision about an agent, keep this in mind.
A few years ago, an agent was the keynote speaker at a conference luncheon. I’m sure he had valuable advice to share but, unfortunately, he was intoxicated and had trouble putting words into complete sentences. Throughout the speech, I wondered what publishers thought of him and, by association, of the writers who were his clients. In contrast, two years later, another agent spoke at the same convention. This individual was polished, poised and sober. He presented himself and his agency as professionals.
Are agents absolutely necessary? Maybe, maybe not. How did you answer the goals statements in Chapter One? If you freelance, elect to self-publish or sign with a small press, you may not need one. On the other hand, if your dream is to be published by one of the premier New York companies or to have your screenplay picked up by a major studio, an agent must represent you. In addition to handling book or screenplay contracts, agents can be good sources for writing assignments that include articles, Web content, white papers and training materials. Is it possible to conduct your business without an agent? Yes. Whether or not you can or should is a question you will have to answer based on the type of publishing involved and your writing goals.
Agents are listed in a number of places: on the Web, in the acknowledgement sections of books, and in various directories such as Writer’s Digest’s Guide to Literary Agents. Check out notable sales in the Book News section in Publishers Weekly. Those blurbs frequently include the agent’s name and the name of the agency for which they work.
Regardless of what an agent lists as specialties in various directories, each has a true proficiency. For example, in genre fiction, many agents indicate they represent several or all of the major categories (romance, western, mystery, science fiction, etc.). A careful examination of actual sales may indicate the agent is more successful selling one genre over another. This applies to nonfiction as well. Does the agent sell more biography, cookbooks or self-help? Agents may have higher success rates selling material they genuinely like and prefer.
Before submitting a query to an agent, be sure this is a person with whom you want to work. As flattering as it is to have someone show an interest in you, try to stay grounded. Like your accountant or your plumber, your agent will be one of your vendors. Your agent is hired by you to do a specific job.
Remember: a good agent is priceless. So is a bad one.
Talk to other writers represented by the agents you are considering. Are they pleased with the relationship or do they plan to seek new representation? If they are shopping for a new agent, find out why. Visit professional writing Web sites to get the scoop on the agent. Many writing organizations (such as American Society of Journalists and Authors and the International Women’s Writing Guild) have agent screening and maintain lists of reputable agents for their members.
As you read the listings, you will note that some agents charge reading fees, some charge for incurred expenses, and some charge nothing at all. The Association of Authors’ Representatives prohibits its members from charging reading or evaluation fees. Since there are so many agencies that do not charge, and as a business, you want the best deal with the best vendors possible, I recommend approaching only those agencies/agents that are members in good standing of AAR.
There is a small but growing trend to shift actual expenses incurred, for photocopying, postage and the like, to the client. A reputable agent may charge a client for these expenses, but a detailed list should be provided and the client should not be invoiced until after the sale to a publisher has been completed.
Agents are inundated with queries and manuscripts. In addition, they must spend time with publishers to pitch existing clients’ works. Therefore, no matter what time frame for responding to queries is indicated on an agent’s Web site or directory listing, double it.
Nothing in fine print is ever good news. - Andy Rooney, Journalist and commentator
I am often asked what an agent should charge for commission. While I cannot say what should be charged, I can tell you to expect to pay the going rate. That can vary depending on whether the work is fiction or non-fiction, long or short. Commission rates also fluctuate with the rights being sold. North American first print rights will garner one rate while foreign print rights are another. Plan on paying a commission rate between fifteen and twenty percent for North American print rights.
Assuming you work with someone who is reputable and who represents you honestly, the commission you pay your agent is well worth it. The agent allows you to concentrate on writing and marketing. While this doesn’t prevent you from worrying about the success or failure of a sale, it does keep you from wasting time and effort on things like negotiating - an ability that is probably not in your skill set.
Keep in mind that your royalty check will go to your agent first. This procedure protects agents and guarantees they get their commission. It also allows the agent to monitor the publisher, assuring that advance or royalty payments are received on a timely basis. A few disreputable agents may not remit proceeds to the author appropriately and on time. This is an important reason to check references and investigate an agent thoroughly before signing a representation contract.
One of the reasons novice writers avoid agents is fear that the relationship will be like a bad marriage. If that happens to you, hopefully you and your agent can simply agree that things aren’t working out and the relationship ends in a professional manner. Presumably you have a contract and that contract has an out clause based on:
Time – not selling the work within a given period
Performance – not forwarding your royalty checks, etc.
If there are performance issues, you should carefully document all occurrences – when, where, how much, who. If the problems are beyond the nuisance level, separation may also require an attorney.
During the course of your search for representation you may be approached or may pitch your work to a book packager. They may seem like an agent but they are not. Both are part of the publishing industry but the packager performs very different tasks.
A packager contracts with writers and editors to produce works that are then sold to publishers. Some packagers assign work to writers who create something to the packager’s specifications. The writer works as a freelancer or an employee, receives a fee or salary and has no claim to the written material. The Nancy Drew series is a good example of a packager and its write-for-hire production.
Other packagers buy completed manuscripts and all the rights to them from the authors. They hire editors to polish the work and when it is ready for print it is submitted to the publisher. Tekno Books is this type of packager.
In either scenario, the publisher receives a completed work and does not have to search for new concepts or new writers. The packager does the upfront work.
To learn more about book packaging, read some of the articles about them found on the Internet. Writing for a book packager could be a way to meet your writing goals and expand your writing business.
As with any business relationship, research and references will help you make an educated hiring selection about representation. Use the checklist at the end of the chapter to aid you in your search and complete one list for each agent/packager under serious consideration. When you finish your investigation, compare and contrast all the information you gathered to make a decision about who you want to represent you.
Agents
This agent is a member of AAR. Y or N
I read evaluations of this agent on the Internet. Y or N
I reviewed this agent’s listing in directories. Y or N
This agent handles the type of thing I write. Y or N
This agent has sold the type of work I write. Y or N
I read the agent’s Web site thoroughly. Y or N
This agent is currently accepting submissions. Y or N
Others recommend use of this agent. Y or N
This agent has a verifiable sales track record. Y or N
For book packagers:
Is this a flat rate contract? Y or N
Does the packager have a buyer for this work? Y or N
Does this packager work with agents? Y or N
Do other writers recommend this packager? Y or N
Does the writer receive a copyright on the work? Y or N
Are ancillary rights part of this contract? Y or N
How are the sales of ancillary rights handled?
CHAPTER FOUR: THE DOTTED LINE
There is no moment more thrilling for a writer than being offered his or her first representation or publishing contract. I remember that day vividly. An agent agreed to represent me. I was so excited I skipped from the mailbox to my front door.
Like the good business person I profess to be, I gave the contract to my attorney. She raised several questions: how long does he have to sell the work before the contract expires, does the contract cover all rights or just print rights, what evidence will be provided that attempts to sell the work are being made?
All of these were valid points and I chose to ignore everything she brought up. I had representation and that was what mattered. The fact that my manuscript was of dubious quality did not enter into my thinking. If an agent took it, that was all the validation I needed. I was on my way to being a published author.
While I was fortunate that I did not suffer substantially from that mistake, my attorney was correct on every issue she raised. After months without any contact from the agent and no evidence that he was trying to sell my work, I eventually terminated my relationship with him, much wiser for the experience. I now know that neither the book nor I was ready to be in print.
Most writers are not attorneys and shouldn’t try to be. However, as managers of a business, writers must address any contract offered with the detachment of a forensic pathologist. To continue the analogy, writers ought to perform an autopsy on the contract, examining each sentence for clues to the overall health of the entire document.
Not long ago, I was at a writers’ conference and joined some colleagues for lunch. The discussion eventually evolved to our relationships with our publishers. Jane complained about a change in her publisher’s distribution methods. John suggested that change might void Jane’s contract, which would leave her free to pursue a different publisher. A puzzled look crossed Jane’s face. She confessed that she wasn’t sure she had a copy of her contract and she certainly couldn’t remember its terms. Jane is not a novice writer. She has six titles to her credit.
A contract is (a): a binding agreement between two or more persons or parties; especially: one legally enforceable (b): a business arrangement for the supply of goods or services at a fixed price. (www.m-w.com/dictionary/contract). Rights are: the property interest possessed under law or the custom and agreement in an intangible thing especially of a literary and artistic nature <film rights of the novel>. (www.m-w.com/dictionary/rights)
Modern poets talk against business, poor things, but all of us write for money. Beginners are subjected to trial by market. – Robert Frost
When you create a poem, article or other work, you own it. You can then sell it in its entirety or in pieces. For example, you write an article about the children who came to the United States from England during World War II. You sell first North American print rights to a national magazine. A year later, you sell reprint rights to another periodical. You still own film, audio, and other rights.
Written works are often sold in pieces. There are English language rights, foreign language rights, audio rights, large print rights, film rights and action figure (licensing) rights – to name a few. For books, it has become common practice to sell most or all rights to the book publisher or packager for a larger advance. They, in turn, sell the ancillary rights to others, giving a small percentage back to the author.
There are reference books that help writers understand general contract terms and definitions; however, please do not rely on them entirely just to save yourself the cost of an attorney. Lead time for book publication is many months. Trials set new precedents and laws change, particularly on the state level, so use these reference books only as guides. The information contained within them may be outdated.
The best advice I can give about contracts is: Before you sign on the dotted line, be sure you understand precisely what you are selling and exactly what you will receive in return. As the owner of your business, the final responsibility for comprehending the terms of any contract you sign is yours.
Included in this chapter are checklists to aid in the evaluation of the contract you’ve been offered. In addition to your personal evaluation, check Internet postings and blogs from professional writers’ organizations. Many of them monitor boiler plate contracts. They post alerts when contracts hit the marketplace that contain serious issues for writers. For example, Authors’ Guild alerted its members when Simon and Schuster changed its definition of “out-of-print.” With the advent of print-on-demand technology and e-readers like Amazon’s Kindle, Simon and Schuster said a work can never go out of print. Therefore, rights never revert back to the author, even if the book is no longer in the publisher’s catalog and the publisher does not promote it.
Why should you care about this? Prior to the digital era, when a publisher stopped printing and promoting a work, the book literally went “out of print.” Rights reverted to the author or the author’s estate. The author was then free to find a new publisher or to self-publish. Now publishers want to retain rights on the off chance that a book languishing in their digital library will become the next marketing phenomenon. Because it is possible to store limitless digital copies of manuscripts without incurring expense, publishers do and will.
All writers should give careful consideration to how the digital version of their work will be used and what compensation, if any, will be paid. A freelancer recently told me that her contracts for newspaper assignments include digital rights with no additional payment. Her work appears in print and online for the same compensation.