Royalties & Negotiations Revisited

I'm sorry my answer wasn't sufficient here.

Did I mention I've taken on some new responsibilities at my company, burning the midnight oil & struggling to the limit of my abilities to open opening a new area of publishing? Which now looks like it may be scrapped.

[breathe, LDSP, breathe]

I didn't mean to be negative or emotion-less. And I'd love to be in a position to entertain author negotiations on royalties. But the reality of the situation is that the LDS market is small and budgets are tight. That means that there is very little wiggle room for negotiation. We're not like national publishers who only pay 60¢ per copy of a paperback book. Our books can cost us as much as $3 to $4 per copy, depending on the size of the print run. Yet, we have to price our books somewhere in the ballpark with national books. Also, a fantabulous, hit-it-out-of-the-park, run-away best-seller fiction title for us means 20,000 copies sold (almost unheard of); not 200,000.

Royalties are based on the expected sales of a book (for fiction, 2,000 copies). Especially for LDS fiction, we can only go so high, no matter how well you negotiate with us. First-time authors in the LDS market are a risk, therefore, you do not have much room for negotiation at all. If your first book goes bananas, you will have more leeway to negotiate a better royalty deal on book #2.

"Good luck" means "I wish I had better news and maybe you will be able to negotiate a better than average deal and it doesn't hurt to try."


Josi said...

I read the original post when it was posted and agreed to the point of not saying anything. So I"ll agree now :-) The fact is that the LDS market is very very competitive (not that other markets aren't) and the publishers are not making millions of dollars that give them a wide margin to work with when it comes to splitting up the royalty costs. There is a very set formula the publishers use to make sure they make enough money to make the project work, if you demand more of it in royalty, there will be less for editing, marketing, taxes, operating costs, distribution, etc. That's not to say you shouldn't make sure you're getting a fair deal--but fair is relative to your success and especially for a new author, where there has been no success yet, it's hard to demand more than the typical.
Good luck is always nice, but so is understanding the reality of the market you are in. That said, good luck :-)

Janet said...

Great post LDSP. It's good to know the realities of the market and what to expect. I'm so glad you have this blog, it sure helps me understand this new arena that I've entered. Keep it up!!

Anonymous said...

Okay. But sorry Josi. The margins aren't that small that LDS publishers can't loosen up just a lttle.

How about this scenario. My publisher agrees to a fifteen percent royalty. But then tells me I have to take a cut in that royalty if I want to sell my books at Costco or WalMart, since those large chains demand a lower wholesale rate other booksellers don't get. When I ask if they're also going to take a cut, which seemed fair, my publisher says no. Are you kidding. Just the author. They insist that I'm going to lose sales if I don't agree to a cut. When I remind them that they will be losing sales as well, my publisher says that isn't the point. They also insist that returns are pretty high from Costco and Wal Mart. And the returned books are often damaged. So what's their point? The author should take a cut in royalties because there is a chance of returned books being damaged? I think the logic is flawed if not goofy.

Th. said...


I'm sympathetic to having your department cut. My first book sale was to a Deseret Book department that was axed while my contract was being worked out. I never did sell that book (and it's so pointless to try now, I just threw it up online). If that's how things end up for you, I'm sympathetic and wish you a holiday filled with high-end hot chocolate.

Th. said...


Smooth, Theric.

On the off chance anyone was going to actually click that link, here it is again.)

Next time I'm being sneaky, I'll try to type better.

Kent Larsen said...

LDSP, you are kind of mixing apples and oranges here.

Yes, it is true that "Mass Market" paperbacks (about 8" x 4") cost just 60 cents each to print, but books that get that treatment 1) have lower cover prices (say $6.95) and 2) are already proven -- they usually existed previously in hard cover (at a hard cover price) and sold extremely well.

You are right that the LDS market can't deliver the kind of volume that justifies a "Mass Market" approach (minimum 25,000 copy print run), but the idea that things are significantly different in the national market in terms of royalties isn't quite accurate.

The vast majority of books published nationally are "trade paperback" -- in similar sizes to those published in the national market. The printing costs to the publisher aren't too different. The principle difference is the size of the printing and number of copies that you can reasonably expect to sell. Where in the LDS market selling 1,000 to 2,000 copies is a reasonable expectation, nationally, the expectation is more like 2,500 to 5,000 copies.

Yes, this does mean that the national market gives authors a better return -- possibly twice or so what the LDS market can give. But in most cases it is NOT 10 times what the LDS market can give you.

In my experience, the differences boil down something like this:

Advances: National market - 30-40% of expected royalties. LDS market none

Royalties: National market 6-8% of the cover price (higher for hard covers), LDS market roughly the same to slightly lower (Remember, this is of the COVER price, not of net sales)

Sales: National market 2,500 to 5,000 copies sold. LDS market 1,000 to 2,000 copies sold.

Total Author earnings: National market: $3,000 to $6,000. LDS market $1,200 to $2,500. (Please note that these figures vary widely).

One other consideration is the fact that LDS publishers generally have non-standard contracts, usually due to using local lawyers in Utah who don't know anything about book publishing. As a result, many of the contract clauses are highly unfavorable to the authors. I urge authors to review the Authors Guild Guidelines before signing a contract.

I covered these issues during the past year on A Motley Vision in two posts: Caveat Auctor and Ask not what you can do for your publisher….

Kent Larsen said...


FWIW, most national contracts I've seen do include a clause like this -- one that reduces the royalty to the author for sales in which the "wholesale rate" is lower than normal.

However, from what I've seen, the author isn't making the entire difference -- the proportion that goes to the publisher and to the author stay roughly the same.

BUT, mathematically, the author couldn't make up much of the difference and still get a royalty. Usually stores get 40-45% off the cover price. If Walmart is getting 50% off, then the author's royalty would have to go down by 5 to 10 percentage points for the publisher not to be sharing in the loss. That's most or all of what the author makes!

I suspect that your publisher was simply incorrect when he indicated that the publisher isn't sharing in the cut.

Anonymous said...

Publishers share in the cut. And they get hurt by the returns from Costco and WalMart because those stores have unreasonable demands about who pays the shipping.

I wish the LDS market could pay more to the author, but the reality is that even Deseret Book and Seagull stores require publishers to give them higher discounts and pay shipping, and you have to advertise in their catalogs to get the books in the store. When you factor everything in, the smaller LDS publisher is making next to nothing.

Anonymous said...

In response to the above:
And so is the smaller LDS author. Why do we even do it then?

Anonymous said...

Sorry Anonymous #2, but the publisher should take the risk of selling to Costco and wal mart. If they want to take the risk, give them a slightly better rate then go for it. But this stupid contract thrown out to LDS authors asking them to take the ENTIRE cut in royalties to make up the difference is way out of place. If the publisher wants to take the risk. Great. Do it. If they decide the return rate is too high or they get too many damaged returns, then don't sell to COSTCO or Wal Mart. But stop this lame practice of putting little side note, astericked, royalty notices in your contracts that ask the author if they'd like to sell to those chains and take a cut. That's your job. Not ours!

Anonymous #1