How do you negotiate contracts and royalties for your book?

1 Types of contracts

Contracts vary depending on the type of publication, the publisher, and the market. Generally, there are two main types of contracts: standard contracts and negotiated contracts. Standard contracts are the ones that publishers offer to most authors, with fixed terms and conditions. Negotiated contracts are the ones that authors can modify or request changes to, based on their needs and preferences. Negotiated contracts may require more time and effort, but they can also result in better terms and conditions for the author.

2 Types of royalties

Royalties are the payments that authors receive from the sales of their books or book chapters. The way these royalties are calculated can vary depending on the contract. The most common types include net receipts royalties, list price royalties, and profit-sharing royalties. Net receipts royalties are based on the amount of money that the publisher receives from distributors or retailers after costs and discounts have been deducted. List price royalties, on the other hand, are based on the retail price of the book, regardless of how much the publisher receives. Profit-sharing royalties are based on the profit that the publisher makes after deducting all costs and expenses. For example, if an author has a 10% net receipts royalty rate and the publisher sells a book for $10 and receives $6 after costs and discounts, then the author will receive $0.6 per book sold. Similarly, if an author has a 50% profit-sharing royalty rate and the publisher sells a book for $10 and spends $8 on costs and expenses, then the author will receive $1 per book sold.

3 Factors affecting royalties

The amount of royalties an author receives can vary depending on a number of factors, such as the size and type of publisher. For instance, larger and more established publishers may offer lower royalty rates than smaller and newer publishers, though they may have more resources to promote and distribute the book. Additionally, different genres and formats of books may have different royalty rates depending on the market demand and production costs. Textbooks and reference books, for instance, may have higher royalties than fiction and trade books but may also have lower sales volumes. Furthermore, authors with a track record of successful publications or a strong academic profile may be able to negotiate higher royalty rates than those who are less known or experienced. Finally, authors who produce original, innovative, and high-quality work may be able to negotiate higher royalty rates than those who produce derivative, conventional, or low-quality work.

4 Tips for negotiating contracts and royalties

Negotiating contracts and royalties can be a daunting task, especially for authors unfamiliar with the legal and financial aspects of publishing. To help you negotiate effectively, it's important to do your research and understand the terms and conditions, market value of your work, and expectations of the publisher. You may consult other authors, mentors, colleagues, or experts who have experience in this area. Comparing different offers from different publishers is also an option. Additionally, you should be realistic and flexible in your negotiation. Aim for the best possible deal for your work but be aware of the limitations and constraints of the publisher and the market. You may need to compromise or accept trade-offs as long as it does not compromise your rights and interests as an author. When communicating with the publisher, be assertive but respectful. You should avoid being aggressive, demanding, or rude as it may damage your relationship with the publisher. Aim for a win-win situation where both parties are satisfied and benefit from the contract and royalties.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?