This week, I made an offer to an author to publish her book.\nShe asked for two weeks to consider it. I asked her to get back to me by the\nend of business on Monday, which would have given her three business days, plus\nthe weekend, to consider it. Because I was unwilling to give her two weeks, I\ndon\u2019t know that I\u2019ll get to publish this book, and I think it\u2019s worth\ndiscussing here the actual process that publishers go through in deciding to\noffer on a book and how you might respond to such an offer.<\/p>\n\n\n\n
For starters, as a publisher, I do acquire the rights to publish works directly from authors. Many publishers do not. There are a couple of reasons for this: Publishers use literary agents as filters. If a manuscript can get representation from a respected literary agent, chances are that there\u2019s something<\/em> worth reading there. Maybe not something the publisher will want to acquire, but not total drek, either. But Endpapers Press, which is a part of Author Coach, is a small press. We don’t pay what big houses pay, so getting submissions from agents can be a challenge.<\/p>\n\n\n\n The second reason is that publishing is full of jargon that\nmost people may never have heard. When my wife and I watched Younger<\/em> together, a TV show set in the publishing\nworld, I laughed when they talked about a magazine publishing a chapter of the\nwork before publication, instead of saying the magazine had bought first\nserial. They did this because, while the entire publishing world knows that\nfirst serial rights are the right to publish a part of the work before\npublication, the rest of the world does not.<\/p>\n\n\n\n When a publisher buys a book directly from an author who has never been published before, it becomes the job of the publisher to educate<\/em> the author. This can take time and patience.<\/p>\n\n\n\n If the author has an agent, educating the author becomes the agent\u2019s job. And since the agent is representing the author, authors tend to listen to their agents, whereas they might question what the publisher is saying and feel the need to research it. And the truth is, there\u2019s a lot of incorrect information out there.<\/p>\n\n\n\n I once attended a panel at San Diego Comic-Con about publishing. No one on the panel worked at a publishing house, nor was there an agent on the panel. The number of incorrect statements being tossed around made my head spin. I had to leave, lest I stand up and shout out, \u201cNone of you know what you\u2019re are talking about!\u201d<\/p>\n\n\n\n In a traditional publishing process, a book comes into an\neditor from an agent or perhaps directly from the author. The editor may reject\nthe work based solely on the cover email. For example, if the genre is not one\nin which the editor generally acquires, or if the subject matter is simply\nwrong for the house. If the editor chooses to consider it further, they may\nstart to read it or ask their assistant to be the first reader.<\/p>\n\n\n\n Let\u2019s assume the editor reads it and loves the manuscript. What next? The editor may go to another editor in house and ask them to read it. If the editors often agree on things, this can be a good way to create some support for the book before bringing it up at an editorial meeting.<\/p>\n\n\n\n Generally, at the editorial meeting, if the editor-in-chief or publisher thinks the book sounds interesting, they will ask if anyone else wants to read it. Hopefully, you get some volunteers. In houses where assistants attend the editorial meeting, this can be a real opportunity for them to step up and participate. Everyone’s opinion counts when it comes to being a reader. You like or you don’t.<\/p>\n\n\n\n So let’s say three editors volunteer to read the book, and the next week each comes back and sings its praises. What happens next?<\/p>\n\n\n\n At some publishing houses, editors may be asked to run a\nP&L\u2014profit-and-loss estimate\u2014on the book, using different prices, page\nlengths, and royalty rates to determine what an appropriate advance might be.\nThe editor will be given sales estimates, also, to see what happens if the\npublisher buys the book, typesets it so it\u2019s 384 pages, sells it at $27.00, and\nships 15,000 copies with a 50% sell-through, i.e., 50% of the copies shipped\naren\u2019t returned. An editor can<\/em> do\nthis by hand, but today publishers have elaborate systems that can include many\nmore variables such as type of paper and the cost of that, set-up fees at the\nprinter, etc., to determine much more accurately what the appropriate advance\nmight be.<\/p>\n\n\n\n Of course, much of what the publisher is doing is guesswork.\nPrint runs are driven by orders. If a publisher has orders for 10,000 copies,\nit will print enough to fill those orders and perhaps extra in case of early\nreorders. But if the orders are for 10,000 copies, it certainly won\u2019t print\n50,000 copies. And no one knows the orders until the salespeople start selling\nthe book to accounts.<\/p>\n\n\n\n Publishers have certainly guessed wrong, overpaying massively for books that didn\u2019t sell. But plenty of best-selling books were acquired for very reasonable sums of money and far, far exceeded the expectations of the publisher.<\/p>\n\n\n\n So, assuming the P&L turns out some advance numbers that\nmake sense, the editor will be authorized to make an offer of a certain advance\nor authorized to offer up to<\/em> a\ncertain number. If the editor chooses to go in low and try to get the book for\nless, that\u2019s a valid strategy. It can leave the agent or author feeling like a\nwinner if they talk the editor into offering more, while the editor knows they\nare still in safe territory.<\/p>\n\n\n\n Now let me pause and tell you that there are certainly editors at a certain level who do not<\/em> go through this process. They may be executive editors or they may have their own imprints and as such have the authority to offer on books up to a certain level without anyone else authorizing them to do so.<\/p>\n\n\n\n So the editor makes an offer. That offer may be on the phone\nor by email. Either way, there are generally not a lot of details. Usually it\u2019s\nadvance, payout, territory, splits, royalties, word length, and proposed\ndelivery date. Any agent can make an informed decision on an offer based on\nthis. Some may ask some additional questions, such as is the publisher offering\nany best-seller bonuses? An agent might ask if the editor would consider making\nthis offer a \u201cfloor,\u201d so that the agent can run an auction. But, generally\nspeaking, this is about it. Everything else can be hammered out in the contract\nnegotiation.<\/p>\n\n\n\n So how does this go down?<\/p>\n\n\n\n In an email, it might be as simple as this:<\/p>\n\n\n\n Dear [Agent]:<\/p>\n\n\n\n Thanks for sending along [TITLE] by [Author]. We really like\nthe book and I\u2019m excited to be able to make you the following offer:<\/p>\n\n\n\n Advance: $10,000, payable \u00bd & \u00bd<\/p>\n\n\n\n This means half on\nsigning of the contract and half on delivery and acceptance of the manuscript;\nsome publishers want to pay on a different schedule, limiting their cash flow.<\/em><\/p>\n\n\n\n Territory: World [this means world rights, all languages]\nwith splits of 80\/20 UK and 75\/25 translation<\/p>\n\n\n\n This means the\npublisher will acquire the rights to publish in all languages and if it\nlicenses UK or translation rights to British or foreign publishers, the author\nwill receive either the 80% or 75% of any advance and royalties, which will be applied\nto their US advance until that advance earns out.<\/em><\/p>\n\n\n\n Royalties: Standard hardcover; 7\u00bd% straight trade paperback;\n8%-150M; 10%TA.<\/p>\n\n\n\n Every agent knows what\nthis means, but every author does not. All of these are based on retail list\nprice, even though that is never mentioned. \u201cStandard hardcover\u201d is 10% of the\nretail list price to 5,000 copies sold; 12\u00bd% to 10,000 copies sold; and 15%\nthereafter. The trade-paperback rate is a flat rate with no escalators. Some\npublishers start at 6% and escalate to 7\u00bd% at 20,000 copies sold. The\nmass-market rate is 8% until 150,000 (yes, that\u2019s right) copies sold, and 10%\nthereafter.<\/em><\/p>\n\n\n\n E-Book 25% of net; Audio 10% of net.<\/p>\n\n\n\n These rates are based on net and a smart editor makes that clear, so as not to mislead the agent or author. If a book is $25.00 and sold at a 50% discount, the hardcover royalty is $2.50, or 10% of the MSRP. If the E-Book is $14.99 and sold at a 30% \u201ccommission\u201d under an Agency Model, the publisher\u2019s net is $10.29 and the author\u2019s royalty is 25% of that, or $2.62. Since most E-Books are sold by Amazon and under an Agency Model, the publisher receives 70% of the sale price, which is set by the publisher and not Amazon. Smaller publishers cannot get an Agency Model and are likely \u201cselling\u201d E-Books to Amazon at a 55% discount, meaning they net 45%. Small publishers using Kindle Direct Publishing get 70% on E-Books, but the price can be changed, even without their permission. It may be worth asking if the publisher sells under an Agency Model, but 25% of net is nearly written in stone at most houses.<\/em><\/p>\n\n\n\n Word length, i.e., how long the final manuscript will be.<\/p>\n\n\n\n Ever change the font and margins of your English paper to make it longer or shorter? Authors can do the same thing. Back in the age of typewriters, almost everyone used a Courier mono-spaced font and an average of 250 words per page was typical. Now, the type and spacing are easily manipulated, so word length is more important than ever. But what is a \u201cword?\u201d Is the word length what Microsoft Word says it is? Not for old-school publishers. I use five characters including spaces as a \u201cword,\u201d but you can get far more complicated and publishers do when they are working on P&Ls: they do cast-offs: https:\/\/www.bookmobile.com\/art-book-printing\/how-many-pages-will-your-book-have\/<\/a> Most publishers\u2019 contracts do not specify how they calculate word length, which may or may not be to the author\u2019s advantage.<\/em><\/p>\n\n\n\n Due date, i.e., the date that the complete, revised\nmanuscript will be delivered to the publisher.<\/p>\n\n\n\n I\u2019d bet that 99.99% of first novels are sold as complete manuscripts. The odd exception may be a celebrity who has never written a novel and only has a \u201ctreatment\u201d of what it could be and a chapter or two. And the publisher acquiring the rights to publish your book has no intention of publishing the draft they just read. There will be notes for a rewrite from your editor, there will be line editing performed by your editor, and there will be copyediting, done by a freelance or possibly in-house copy editor. The due date is the date by which you are expected to have completed the revisions based on your editor\u2019s notes. Line editing and copyediting come after. The best way for me to explain \u201cacceptance\u201d is that this takes place when the editor feels you have successfully executed all of the requested revisions or that you can\u2019t, and the editor will have to do more in line editing. Either way, you are done revising and rewriting and can be paid the amount due on delivery and acceptance. The rare publisher waits until after copyediting is complete and you have signed off on it.<\/em><\/p>\n\n\n\n The one exception is\nif the editor feels you did your best, but the book still needs a ton of work.\nIn a sense, this is the fault of the editor, for buying a book that was so far\nfrom ready, but that won\u2019t make you feel any better when they call up to reject\nyour book and ask for the signing payment back. The odds of that happening are\npretty slim. In over thirty years in publishing, I\u2019ve seen one manuscript\nrejected and that was due to it being too long and the editor was unwilling to\nwork with the author to cut it.<\/em><\/p>\n\n\n\n We\u2019re very excited to be making this offer and look forward\nto working with the author. Please let me know of your acceptance of this offer\nand I\u2019ll get a contract going.<\/p>\n\n\n\n Now, that\u2019s a little ambitious, don\u2019t you think? The editor expects the agent or author to accept the first offer? Unless the offer is so outstanding or the book has been turned down all around town, first offers usually result in <\/em>counteroffers.<\/em><\/p>\n\n\n\n Offers also result in agents anxiously calling anyone else who has the manuscript and letting them know they have an offer. In short, they begin \u201cshopping\u201d the offer, hoping for a better offer or to pit one publisher against another in a bidding war. If there is a ton of interest, the agent might set an auction date, giving the first offering editor the chance to set a \u201cfloor,\u201d or minimum bid for the book. But that\u2019s not usually the case. Usually there\u2019s just a counteroffer.<\/p>\n\n\n\n But it’s this shopping of the offer that generally leads publishers to press agents and authors for an answer quickly. They want to know the deal is done and get to work on the next steps. Waiting more than a day or two for the agent to get back with acceptance or a counteroffer is almost a sure way to end up in a bidding war.<\/p>\n\n\n\n Or, for the agent, it can be risky if they can’t get a counteroffer. Imagine if an agent took a week to get back to me. I’m an editor working for a publisher. Agent comes back a week later to accept the offer or counter. I may simply say, “Listen, you took a week to shop my offer to other publishers and you got nowhere, so my offer stands as it. So take it or leave it.” In my experience, almost every agent or author will take it.<\/p>\n\n\n\n So, it makes sense for an agent or author to counteroffer early on. That might not stop them from shopping the offer to other publishers, but at least they are keeping the iron in the fire and not cooling on the side.<\/p>\n\n\n\n A counteroffer might be looking for more money, a smaller territory that allows the agent to retain UK and\/or foreign rights to the book, thus ensuring 100% of the advance and royalties on such editions go to the author (after the agent\u2019s commission, of course!). It might be looking to retain audio, though several major publishers now consider getting audio a dealbreaker. The word length might be negotiated or the due date. The payout might be negotiated. Some publishers insist that one-third be paid on publication of the work. If the book was bought without a manuscript, e.g., a writer-for-hire of a media tie-in novel, one payment may be on D&A of the outline of the work. The permutations can be quite varied, but if you can get \u00bd and \u00bd, that\u2019s probably the best you can get.<\/p>\n\n\n\n So, after probably two or three days of offers and counteroffers\u2014though often less\u2014the editor and agent or author have agreed on these basic terms: advance, payout, territory, splits, royalties, word length and due date. So you are done, right? No, because there still isn\u2019t a contract. At best you have a deal memo that is contingent on signing a contract. While publishing tradition is that you now have a deal, and the book will be withdrawn from submission elsewhere, this deal can still fall through based on the contract. This is, in my experience, very rare, and here\u2019s why: most authors won\u2019t risk losing the deal. As an agent, I have had only two authors ever refuse to accept a contract and both times it was because the publishers wouldn\u2019t give the author approval over the copyedited manuscript, thus not ensuring the author they would have final approval over the text of their own work.<\/p>\n\n\n\n Now, I\u2019ve written over 2,500 words here (2,800, if you count\nwords old-school), and I could probably write another 20,000 or more on\nnegotiating an actual contract, so I will end here.<\/p>\n\n\n\n Hopefully, this has given you, the first-time author, a better sense of what goes into receiving, negotiating, and accepting an offer on your novel.<\/p>\n\n\n\n Good luck!<\/p>\n","protected":false},"excerpt":{"rendered":" This week, I made an offer to an author to publish her book. She asked for two weeks to consider it. I asked her to get back to me by the end of business on Monday, which would have given … Continue reading The Submission<\/h4>\n\n\n\n
Calculating the Advance<\/h4>\n\n\n\n
The Offer<\/h4>\n\n\n\n
The Counteroffer and Other Shenanigans<\/h4>\n\n\n\n
The Acceptance<\/h4>\n\n\n\n