Tuesday, January 22, 2008

Part 4: Deal points (royalty structure)

Busy day, but smooth as butter:)

First on deal points, let's go over royalty structure. Think I've said it before, but I'll say it again just in case (Lost is coming back on soon, so bear with me, my little beasties(it's like I have Lost ADD lol). And, hey, can't wait? Check out www.findf815.com) ---royalties vary whether we're talking hardcover or paperback.

If a publisher offers you one straight rate, it's time to think again. Royalties are structured. Here's examples of a fair royalty structure (not bad, but not the best in the world)--

Hardcover:

10% on RETAIL COVER PRICE for first 5,000 copies
12.5% on next 5,000 copies
15% on copies above 10,000

Mass market:

6% on first 150,000 copies
8% on copies above 150,000

Now, why did I capitalize RETAIL COVER PRICE? Simple. You need to pay close attention, as many smaller publishers are going to base royalties on NET.

Let's look at the sample from yesterday's post--

Price point (cover price)..... $20.00

Net per book ....................... $11.00

So if we're talking royalties based on retail cover, you're getting $2.00 per book sold (on first 5,000 hardcover), whereas if we're talking royalties based on net, you're getting $1.10 per book sold (on first 5,000 hardcover). HUGE DIFFERENCE!

Stay literate;)

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