Royalties question

[ania]

Is this the right forum?

Anyone knows how common / standard it is for a small press to have royalties cacluated based on the net, not on the price list?

Thanks!

[Deb Kinnard]

Very common. All of the small presses I've been with have calculated this way. This is because the third party sellers such as Fictionwise, Amazon and the like take so high a percentage of the cover price from the publisher. To calculate on net then spreads the risk. Just not to the third party seller, LOL. They make out and we're stuck looking at a percentage of net.

[ania]

Originally Posted by Deb Kinnard

Very common. All of the small presses I've been with have calculated this way. This is because the third party sellers such as Fictionwise, Amazon and the like take so high a percentage of the cover price from the publisher. To calculate on net then spreads the risk. Just not to the third party seller, LOL. They make out and we're stuck looking at a percentage of net.

Thanks! That's very helpful.

[CheshireCat]

It may be common among small presses, but not so the major publishers -- not on print books. On hardcover, trade, and mass market, the majority of authors are paid royalties based on cover price. The same companies, however, are fighting hard to pay writers on net for ebook editions. And they're mostly winning.

[ania]

Originally Posted by CheshireCat

It may be common among small presses, but not so the major publishers -- not on print books. On hardcover, trade, and mass market, the majority of authors are paid royalties based on cover price. The same companies, however, are fighting hard to pay writers on net for ebook editions. And they're mostly winning.

Thanks. What would be the royalties on net vs. list? Are they the same, percentage wise? If the list price is about 10%, is it the same for an ebook, if it is based on the net? Does anyone know? Thank you!

[veinglory]

It is also not common for epublishers (as opposed to ebooks issued by commercial print publishers). Net would be a red flag there too. The thing is you do not know what "net" is compared to list unless the contract specifies exactly which costs may be deducted before paying royalties (vendor fees? Cost of Cover Art? Overheads?)

[ishtar'sgate]

Originally Posted by ania

Is this the right forum?

Anyone knows how common / standard it is for a small press to have royalties cacluated based on the net, not on the price list?

Thanks!

Mine is based on the original list price. Net is pretty iffy and not something I'd ever agree to. Is their definition of 'net' specified in the contract? You'd want to know what they're basing their calculations on - exactly.

[ania]

Originally Posted by ishtar'sgate

Mine is based on the original list price. Net is pretty iffy and not something I'd ever agree to. Is their definition of 'net' specified in the contract? You'd want to know what they're basing their calculations on - exactly.

It is not currently specified, but I'm trying to negotiate to at least specify. It is a small press, so I was never intent on actually making any money out of my novel (literary / experimental debut, not a bestseller potential) but it bothers me that it is not specified, and that I almost missed that it was "net" and not "list".

Thank you for responses.

[CAWriter]

Originally Posted by ania

Is this the right forum?

Anyone knows how common / standard it is for a small press to have royalties cacluated based on the net, not on the price list?

Thanks!

Not that it pertains to your situation, but it is also common (dare I say, standard) among CBA publishers, even the biggest ones who may be subdivisions of the big 6. Thomas Nelson, Zondervan and others very typically have contracts with royalties based on net.

The theory is that the initial percentage is somewhat higher, but the reality tends to be that the overall royalty is lower than another publisher would pay on list price at a lower percentage. Unfortunately, that tends to be non-negotiable with those publishers for all but perhaps the biggest selling authors.

[veinglory]

However much money the book makes, publishers should be transperant in the contract about how much of it they get to keep.