Kristine Kathryn Rusch

The Business Rusch: Trust Me

Written By: Kristine Kathryn Rusch - Mar• 16•11

The Business Rusch: Trust Me

Kristine Kathryn Rusch

Last week, I declared The Changing Times in Publishing series finished primarily so I could stop using that subheader in my posts.  The times continue to change, and I’m going to stick with the topic for a while.

I had hoped to make The Changing Times in Publishing another book, like The Freelancer’s Survival Guide, but so many of the changes are happening so quickly that even if I release the book as an e-book—after I’ve organized everything, edited it, had someone else edit it, copy edit it, and put it up (a month’s work, minimum)—a goodly portion of the information in the posts might need updating.

I’ve had a few publishers ask me for parts of the book, and I’m even hesitant to do that, just because I’m worried about the data lasting beyond a few months.

Things are changing in publishing that quickly.

Which is why I’m going to stick with the publishing topic for a while.

Let me apologize to those of you who don’t work in publishing, and who’ve been following this blog. I’ll still be discussing business, but I’ll be doing it with the focus on publishing, at least for now.  I hope I don’t lose too many of you because you’ve been great and loyal readers.  I hope you stick around or at least check back from time to time to see if I’m discussing something else.

Knowing me, I’ll probably insert a general business post from time to time because business fascinates me, and understanding it is all important.  I initially thought of adding a second weekly blog post on business all by itself (actually, when I thought of this, I thought of doing it on publishing and keeping the business blog just business), but I honestly don’t have the time.  I suspect these posts are costing me one novel or a series of short stories per year, and I can’t justify adding another weekly project.  I’m happy to revive my nonfiction career, but I don’t want to write nonfiction at the detriment of my fiction.

I also know that the publishing topics have brought a lot of new readers to this blog, and most of you have decided to stick around.  Thanks for that.  I already have half a dozen topics slated, with more on the way.  There’s a lot to cover these days, as we’re in such a period of dynamic change.

Some events in late January, early February started me on this path to keeping the blog about publishing.  Things happened behind the scenes on several listserves that I participate in, as well as in the industry itself, that caused me to have a realization: Most of us long-time writers aren’t prepared for the shift in publishing.

Why are we unprepared? Because the change in publishing requires a radical change in thinking.

People can change their business practices easily if the change requires a new skill set or a new way to do the same old thing. But what’s happening to publishing now requires a new way of thinking, and most established writers haven’t realized that.

I’m not sure some of them are even capable of making the shift.  And it’s important that writers do so, or they will lose in the end.

Here’s the problem: For decades now, all of publishing has been set up on a “trust me” basis—at least as far as the writer is concerned.  At first, I thought this trust-me thing was unique to book agents, but it’s not.  It’s part of the industry, which has become quite paternalistic to its artists.

Think about this: A writer is often (usually [hell, always]) the last to know how well her book from Big Publishing is doing.  (If you don’t know what I mean by Big Publishing, see this post.  I have a specific definition that you need to know before you go any further.)

Let me briefly explain how this process works.  Up until a few years ago, this is how writers reached readers:

Writers provide content (product) to Publishers.

Publishers distribute that content to Distributors.

Distributors distribute books to Bookstores.

Bookstores distribute that content to Readers.

In order to reach those readers, a writer had to pay the publisher a percentage of the book’s earnings.  That percentage could be as high as 94% of the book’s earnings (on a mass market paperback).

In return, the writer received quite a lot.  First, the writer received an advance, which was essentially a loan against future royalties.  Aside from overhead, that advance was often the first money spent on a book and that advance—that loan—arrived two, sometimes three, years before the book appeared on store shelves.

In those two-three years, a publisher invested a minimum of $200,000 on that single title without earning a penny.  In fact, the publisher would not recoup its expenditures for at least six months after the book’s publication, sometimes more.  In the end, the publisher would hope (on average) for a 4% profit margin on every book it published.  (Sometimes the publisher would lose money, and sometimes it would make money, but the average was [and still is] 4%.) In other words, the publisher took all of the financial risk.

Back then, writers could self-publish, but it cost a fortune and the self-published writers wouldn’t get nationwide distribution even if they spent that fortune.  So if a writer wanted an audience for her book that went beyond her friends and family, she had to go to Big Publishing.  There was no other game in town.

Now there is.  And self-publishing in two years has gone from being somewhat shameful and the province of dupes to a practical matter for savvy authors, particularly authors who already have an audience.  But before I go too far down this side road, let me return to the past because it’s important to what I’m trying to describe.

When the author sold that book to Big Publishing, she automatically entered the world of “trust me.”  Writers had a hell of a time getting any information out of their publishers at all.

If the author wanted to know what her projected print run was, she would be told “it hadn’t been determined yet.”  If the book had shipped and she wanted to know how many copies went to bookstores, she would hear that this number “isn’t available yet.”

Every six months, depending on the accounting schedule of the publishing house, the writer would receive a royalty statement, which was supposed to be an accounting of what had happened with that book.  But the statement wasn’t very straightforward.  In fact, it was news in the late 1990s when a publisher instituted a “readable” royalty statement.

Too much information was hidden from the writer, including—once again—the print run, the actual sales, the discounted sales, the number of books behind held as a reserve against returns, and so on.

Sidebar: Let me explain why a print run is a tricky thing.  Because bookstores are allowed to return books, the number of books shipped does not mean that number of books sold.  Bookstores have months to return books for full credit. So the publisher is reluctant to give out any numbers at all.  If the book is successful, it sells 80-90% of its print run. The average is 60-70%.  Satisfactory used to be 50%, but that isn’t satisfactory any longer.

So…to calculate the book’s actual sales, the publisher had to wait until the reserves were in. Somewhere in the dark distant past, and I don’t know exactly when, some publisher instituted a reserve against returns. Basically, the publisher wouldn’t count a certain percentage of the books as sold until months (sometimes years) after the book was published.  The publisher would “release” those books over time.

So, if your book sold 20,000 copies (actual sales), the publisher could withhold based on the terms of your contract (so this number always changes per author) as much as 10,000 copies (actual sales ) of that book for a period of six months to two years.  Gradually, during that time, the publisher would “release” those books or count them against the sales.  Say, at a rate of 2,000 books per royalty period.

See how confusing this gets? See why just finding out how many copies of a book actually sold is tough?

Writers learned that the only way to know exact sales figures of an in-print book was to audit the publisher.  And then, sometimes, the audit wouldn’t work. Because the publisher doesn’t always know.

For example, when a book is actually printed, the printer is allowed to deliver the ordered amount plus or minus 10%.  So if you order 50,000 books from printer A, printer A by  his contract could give you 45,000 books or 55,000 books. This isn’t because printers are inherently lazy or shady.  It’s because shutting off the older presses at a precise number was impossible.  You had to guess and let the machine either short the run or add to the run.

Doing short print runs (of, say 100 copies) was next to impossible.

This, by the way, is one of the technological changes that has enabled cheap and easy print-on-demand books.  Now a printer can print as few as 100 or as many as 10,000 and do so accurately.

But remember my post on how Big Publishing actually works?  Many Big Publishers have printing contracts that predate the change in technology, so they still get the print run plus or minus 10% from their printer, and accurate information is still impossible.

Remember that this print run problem is compounded by the returns system.  And human error.  Exact numbers up until a few years ago were impossible to get.

And yet, writers were being paid a percentage of those exact numbers.  A writer’s royalty rate was counted against each book.  For a standard midlist mass market, the writer would get 6/8/10% of the book.  (6% up to, say, 25,000 copies, 8% to 50,000 copies, and 10% for all copies sold after that.  Again, this is determined per author, per book contract, so it’s not the same for every writer on every book let alone all writers.)  And yet, how would the writer know when she sold 25,000 copies or 50,000 copies or 5,000 copies?

Well, she would have to trust her publisher to accurately report those numbers.

I’ll be honest.  Most publishers do their best.  It’s just not in their best interest to skim off the top, particularly once the Romance Writers of America made it easy (well, easier) for writers to audit the publishers.  (RWA used to help writers foot the bill of doing so; I’m no longer a member of RWA, so I don’t know if this practice still exists.)

But still, the point here is this: the writer had to trust the publisher, her business partner, to give her accurate numbers about her sales.  Writers rarely question this.  Most writers, in fact, don’t even look at their royalty statements.  Many writers who do look at their royalty statements don’t compare the new one with the old one.  And rarely do most writers understand those statements.

In fact, most agents don’t even send the writer unearned royalty statements, which is good for the agent and bad for the writer.  Because if the writer never gets royalty statements, how does she know if her advance has earned out and the publisher has paid her money?

Um…her agent says, “Trust me.  I’ll tell you when there’s money due.”

Considering I know of three reputable agents, one of which is still in business, who embezzled routinely from their clients, I think this trust-me thing with an agent is absolutely ridiculous.

When I asked two of my previous agents for the unearned royalty statements, I was told that sending them to me was too much work for the agency.  I then said that not sending them was a firing offense.  I got the unearned royalty statements and eventually fired the agents anyway.  Those agents didn’t embezzle, but the laziness with regard to my accounts showed up in other business practices.  I should have seen the handwriting on the wall with that very first conversation.

And that does bring me to agents who are the ultimate in trust-me.  Agents rose to prominence in publishing 50-60 years ago primarily to fight the trust-me attitude of the publisher. Agents were in New York; writers weren’t. The agents swore they could find out things like print runs and ferret out royalties due to the writer.  Agents wanted a percentage of any money they recovered. Eventually agents moved from assisting the writer in information gathering to marketing the writer’s work, brokering the deals, and getting a percentage of any deal the agent made.

Again, that made some kind of sense, because the agent would continue to act in service of the writer, making certain that the print runs were accurate, the royalties got paid, and so on.

However, long about 1970 or so, publishers got the bright idea that it would be easier on their accounting system if they paid one check to an agent for all of the agent’s various clients, rather than hundreds of piddly checks to dozens of writers.  So the publishers offered to pay the agent first, and the agents (not dumb) agreed.  The writers (dumb) agreed as well.

Which meant that the person who was earning 10% (not 15% like agents now) got 100% of the check and then divided it—90% to the writer; 10% to the agent.  That is, if the agent was trustworthy, which most are, but some are not.

(Remember, there are no laws that govern agents and there certainly weren’t any then.)

See how this trust-me attitude permeated publishing?  But notice that attitude was only on the writer’s side. The creator, the initiator of the product, got told repeatedly that the information wasn’t available and that the creator needed to trust the business people to accurately report the information.  Or at least to do their very best to report it.

And because Big Publishing was the only game in town, the writer had two choices: go along with the trust-me game or not get published on a national level.  The writer could audit, but back when I came into the business in the mid-1980s, any writer who audited a publisher got quietly blacklisted.  RWA changed that by doing the audits en masse.  In fact, we writers owe a lot of the improvements made in the trust-me relationship between publishers and writers to RWA and the businesswomen who ran it in the early years.

I could go on about the errors in the trust-me side of things forever and I did in The Freelancer’s Survival Guide in the sections on employees and money.  If you are a writer who has an agent, you need to read those sections, particularly the ones on employees (or as I call them “people who work for you”).

But we’re talking about attitudes and the changes in publishing, not about agents or Big Publishing practices.

In January, a well-published writer whom I respect greatly posted information on a listserve about a start-up business that would help busy writers get their backlist up electronically.  If the business actually uploaded the file, the business would get a percentage of that book’s earnings as long as the book was for sale electronically.  More egregious, in my mind, was that the business would put the book up under the business’s name, so that all the tracking information would go to the business getting the percentage, not to the creator of the book.

Does this sound familiar?

I was trying to explain why this is a bad thing on the listserve, as more and more midlist writers jumped in saying that they didn’t have time to upload their work and they didn’t see what the problem was.  I was getting pissed that these very bright people didn’t understand a simple business practice, when something else happened.

Barnes & Noble’s electronic publishing site, PubIt, stopped reporting real time sales.  B&N’s tracking system completely broke down in the wake of the escalating book sales in December.  B&N had to redesign their entire system, which meant that for most of January, sales numbers were unavailable to anyone who had work on B&N’s electronic server.

I was bitching about this with a savvy writer friend, and we wondered how many sales were lost in this transition.  I went from that discussion to the listserve discussion, often within the same afternoon.

And that’s when I realized the problem.

For thirty years or more, the writers on the listserve operated in a 100% trust-me environment.  They have no idea how many copies their books have sold over those decades.  They have no idea if their agents have embezzled from them.

Those writers and everyone else like them have gotten used to trusting other people to handle the business side of their careers.  These writers have also gotten used to the fact that in publishing there are no real  numbers.  Only estimates.

So the thing that my friend and I were bitching about—inaccurate tracking on B&N for one month—is the norm in Big Publishing.  And has been as long as every writer working today has been in the business.

In order for existing writers to understand the benefits of self-publishing electronically, of not giving away a percentage in order to be published, that writer has to understand how real business works, as opposed to the publishing business.

And most writers—even those who are somewhat business savvy and have had long-term careers—do not understand how real business works.

They have taken their business model, the one they grew up in, the trust-me model, and moved it to all of those new businesses that promise to put up an electronic book for the writer in exchange for a percentage for the lifetime of that book.  And the writer should let the trust-me e-pub business handle all that messy accounting, so that it will go directly through the trust-me e-pub business.

Which is really, really sad, because places like Amazon.com and Barnes & Noble actually report sales the day the sales get made.  Yep, there might be errors. But there are fewer errors than there are in any Big Publishing accounting office on any book ever.  There is no plus or minus 10% of the print run, no reserve against returns.  There are only the actual sales made.

And that means there is no reason to trust anyone.

That’s what I’ve had the hardest time with in discussions with established writers.  They now have the ability to control their own careers—to know the numbers that their books sell, to control the money and have it come directly to them, to go directly to their readers without the pile of middlemen that Big Publishing has.  And yet these writers refuse to do take control in the name of convenience.

I understand why a writer would still go to Big Publishing for new books.  I still do, for a variety of reasons (none of them relevant here). There are things that Big Publishing can do that small publishing or self-publishing can’t (although those things are getting fewer and fewer with each passing day).  But for out-of-print backlist, for books that didn’t sell into Big Publishing, I do not understand why these writers insist on going into an unnecessary system that will only hurt  them in the long run.

Or at least, I didn’t understand until I realized that it will take a shift of thinking—a movement out of the old paradigm—that so many of these writers are unable to do.  (There are psychological studies about the difficulties of making a paradigm shift; I’m too lazy to search for them at the moment—I’m still on massive deadline with my novel.)

This paradigm shift is unique to writers who started in the old system, be they unpublished or published writers.  Eventually this whole attitude will go away—provided the trust-me electronic “publishers” don’t get a huge foothold into the market.

Because that’s my secondary fear.  Too many writers will be too lazy to learn the basic business, and will give up everything to trust-me electronic “publishers.”  Those businesses will become the norm, and the writers who go it alone will again become unusual.

I don’t like seeing my fellow writers volunteer for a lifetime of trust-me, particularly when that attitude is no longer necessary to get published on a national scale. Once upon a time, we all had to survive in that model.  We don’t need to any longer.

Yet the writers are the ones who are perpetuating it.

I hope, over the next few years, that the writers who are smart about business—real business, not publishing business—will prevail. But I have my doubts.

You see, when I was coming in, writers were having these same discussions about agents, and look who won that battle.  It wasn’t the writers.  It was the agents, who run the biggest trust-me businesses in publishing.

And that makes me sad.

Once again, I have taken hours I don’t have to write this blog.  Usually I don’t mind doing the nonfiction, but as I’m approaching a massive spring-time crush period of amazing proportions, I resent everything that takes time from my fiction, from sleeping to cooking dinner to conversing on the phone.  Right now, your encouragement will help me make it to next week’s post.  Please donate, comment, e-mail or share this blog.  Let me know I’m not whistling into the darkness.  Thanks for all the support in the past, and all the great words.  I appreciate it all.


“The Business Rusch: Trust Me” copyright 2011 by Kristine Kathryn Rusch.

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57 Comments

  1. Maria Lima says:

    Katherine – I came to your blog via someone sharing a post. Have read several of your publishing biz articles. Thank you! You’ve given me a LOT of food for thought. I’ve got 4 currently in-print traditionally published mmps (a series), with the 5th and last of this arc coming out at the end of summer.

    At this point, I have no active book contracts. I’ve been reading, thinking, contemplating what to do next. Should I work on a book to then e-publish myself? I could do that. I’m a bit of a techhead and have little problems with formatting, etc. It’s temptalicious, as frankly, waiting to hear from my agent and moving forward with possible projects is daunting, to say the least–all that waiting and jumping through hoops. I’m in a good position in that I don’t depend on my freelance income to survive as I work a nearly fulltime day job that pays the bills & has health coverage. As you’ve said, publishing is changing so very fast and there are quite a number of good reasons on both sides of the publishing fence.

    Thank you for this awesome series of posts & I hope that you find the time & heart to continue. I find them extremely valuable.

  2. Maria Lima says:

    And ugh – my APOLOGIES on typing your name wrong!! I had two windows open, one to a dear friend (Katherine) and this one, and my brain just filled in her name when I *meant* to type “Kris”…le sigh.

  3. Great post, Kris!!!

    I’ve noticed this attitude in the published writers in my RWA chapter. Also, the unpublished. It’s amazing how they are steadfastly refusing to acknowledge this major shift in the industry and clinging to the old paradigm. I had never thought about how trusting the writers had become in traditional publishing. I didn’t realize how much information is withheld from writers. Wow.

    Thanks for such an articulate and informative article.

    Good luck on your deadline!!!

  4. Again, interesting post.

    I started submitting novels I felt were the best I could do back in the late 1990s. I didn’t find any agents or Big Publishers interested. Over the last 5 years I sold to three small presses. I’m wondering now if that wasn’t a blessing in disguise. I’m not sure I have what it takes to put up with not getting the truth from my “partners” in the writing business. I have more respect now for those who did and weren’t broken by the system.

    Sort-of off topic and sort-of on: someone at the Writers Cafe at Kindle Boards posted a link to an interview with Margaret Atwood on ebooks. The interviewer was another author. At one point the author (not Atwood) said that ebooks were a fad. One of the posters on the thread noticed that said author had a new publishing imprint about to come out. Hmmm.

  5. Just this morning I was thinking about how if my indie-publishing efforts are successful, then I might start publishing others who don’t want to bother with the learning curve (I’m an entrepreneur at heart and am always looking at new business ideas). However, after considering it for oh maybe 30 seconds I thought “but then I’d have to deal with the take-care-of-me writer” and who wants to do that? Not me!

  6. I remember a lunch I had with my Senior VP of Marketing at the telecom company I was working at while moving through the traditional system. He was asking why I didn’t have a book published yet and I explained to him how the system worked. He said to me, “Wait, so if you put together a business plan, get some pre-sales figures together–you said you have fans already, right?–and present it to these publishers, they won’t take the book?”

    “No,” said I. “It doesn’t work that way.”

    “Wow,” he said. “That’s stupid. How do they stay in business?”

    The incredulity in his voice has stuck with me ever since.

  7. An Onny Mus says:

    From a self-publishing side of things, I’m having hard time figuring out what my sales were with Amazon. They don’t have any “total sales since published” number that I can find, and the “sales for this month” and “sales for the last X weeks” don’t always match up. (The “sales for the last 6 months” is only for complete months, apparently, and my book is too new to have more than one — so no way to get “all sales up to this day” off it!) Amazon may not be doing the “trust me” thing, quite, but they have room for improvement. (Have I sold X books? Or X+2?)

    Smashwords, by contrast, gives me totals only, and a separate graph of when they sold. Of the two, I prefer Smashwords.

  8. Mike Bourke says:

    Very well written, and I know from experience how long it takes to write something this involved. I, for one, appreciate your taking the time out from your deadline crunch to enlighten me that little bit more about the writing and publishing industry, its history and pitfalls, and the dangers that lie ahead.

    Nevertheless, I think your fears are to some extent unwarranted. New writers are perpetually entering the industry, writers who have grown up with e-commerce and Amazon as a part of their environment, who are new-tech savvy. The old guard are inevitably aging. No matter what becomes the norm over the next few years, self-publishing and independance will not go away anytime soon.

    That’s because there is a growing number of amatuer writers out there who will sustain the new paradygm, who will be used to doing for themselves when and if they get their big break, and who won’t roll over when challenged by a resurgance in “trust me” trade practices. The big publishers need them more than the writers need the big publishers, and the writers will realise that.

    There are only two things that the big publishers do better than an independant: Distribution and Marketing, and the latter is often woeful. How long will it be before an unsigned author negotiates a fixed-price deal for those two tasks alone? How long before a publisher starts offering those particular services to external writers in hopes of capturing a new market niche?

    The dinosaurs eventually die out. But the best-of-breed will evolve into birds.

  9. I think your blog was brilliant. Excellent. I’ve been trying to get some fellow authors to think outside the box of Big Publishing Houses and I plan to pass along this blog link so they hear it from someone other than me *s*. I have griped about the accounting system of Big Publishers for nearly 25 years, since I received my first unintelligible royalty statement, which my then husband (an accountant) couldn’t even figure out. More recently I’ve griped about the archaic system of reserves against returns, of being paid twice a year some unknown amount when the technology is in place to know down to the minute how many copies of a book have been sold. I am also quite comfortable self pubbing my own backlist now, and am seriously considering bypassing print altogether for the next book. Going back to relying on third and fourth parties to do something I’ve managed to do myself with, yes, a good deal of trial and error, isn’t something that appeals to me at the moment. I like having full control.
    Thank you again for a great post.

  10. Thank you, Kris. I look forward to every post!
    So glad you’re willing to share what you’ve learned — and the perspective that gives you on what’s currently going on — with the rest of us. (And that you present it with the lack of sugar-coating that is so you!) Your series, Dean’s business posts, and the discussions that follow are like an ongoing set of workshops about a world that is changing too fast to only talk about once or twice a year. Incredibly helpful — only things lacking are Kip’s breakfasts and a workshop room-full of funky couches!

  11. As a new writer who doesn’t come from a writing background (my degrees are in engineering, management, and business and I’ve worked for nearly 14 years as a submariner in the Navy), I have to say I’m consistently appalled by the things you, Dean, Laura Resnick, and many others have to say about the state of business affairs in publishing. I’ve spent a lot of time studying how business is SUPPOSED to be run, and have worked for years in an environment where absolute accountability and integrity is the norm. To hear the tales you guys tell, I’m utterly flabbergasted. How can these sort of shady, ripe for fraud, practices have continued for so long? How the hell have organizations like the FTC not been involved? Most businesses are subjected to quite a bit of oversight, especially the publicly traded ones. Does no one actually care that things get done properly in this industry? I guess you already answered that. But you’d think the various writers organizations would be kicking and screaming about it (sound like the RWA did for a bit).

    The only explanation I can think of is writers are a bunch of English Majors who delude themselves about the higher calling of their “art” to the exclusion of practical reality. Well, I’m on the path of a writer now, but you’ll NEVER hear me refer to myself as an artist. Ever. I’m a businessman and a professional (or at least I’m trying to be). Maybe that attitude dooms me to being a crappy writer forever. But somehow I doubt it.

    I’ve long thought that Economics, Business, and Finance courses should be required for all high school students. Without exception. Just think of all the chicanery (not just in this business, but everywhere from the corner grocery to Capitol Hill) that could be avoided if people were not total dummies about those topics.

    Oy.

  12. Thank you for taking time away from your novel writing to do these blog posts. Your husband’s posts have already pulled me away from the “trust-me” mindset, but it doesn’t hurt to hear it again.

    I am planning to still do some submission to Big Publishing for things they can offer — like paid placement in stores, if I’m lucky, and advance money that I can use while I’m working on getting up other stories electronically. However, because of the wisdom you’re sharing, I’m not going to walk into such a relationship blind. Thank you!

    • Kris says:

      I share all of your incredulousness, folks. I got started in publishing as a journalist and a freelance business writer while owning another small business. As a history major, I had to take economics courses for years to get my degree. My early years in book publishing were filled with “What? You’re kidding, right?” But no one was kidding. (And let me be honest with you: Hollywood makes book publishing look sane.) The problem was that there was no other way to get your books out nationally. Now there is.

      All of your letters this morning were great. Thanks for those and the donations. It really does help, especially when I’m in the crazy, type-as-fast-as-possible stage of the current novel.

      Michael, I agree with you about education. Sure wish that we had spent years learning basics like balancing a checkbook when I was in high school. Ignorance of finances caused the great real estate boom and the financial meltdown, and we’re only just recovering from it as a country. So it would be nice… I think you’re wrong, though, about “settling” for this. Writers really had no choice. If you wanted to be published, you had to work in this system. And some of the bad practices were once good practices that morphed into bad practices over the years. Think, for example, how hard it was to get accurate numbers when you had a returns system, an inaccurate printing system, and employees who had to count everything by hand–for thousands of books. You start to understand how overwhelming–and impossible–it was for publishers as well. (You can see some of the history of how these systems came about in that earlier post I wanted y’all to link to.)

      The thing about Big Publishing that is the problem now is that most (if not all) of these things are in the corporate system and very hard to change, with jobs on the line and systems that were established 40 years ago, out-of-date contracts with suppliers, and that thin, thin profit margin. Agents really did come in to save the day for writers in the days when you couldn’t just pick up the phone and demand this information. The problem is that then the agent system also got out of control.

      When we teach, I notice that writers always ask me where they should stand and how they should sit (and one class of adults staying in the same large house, faced with 12 people and two showers, asked me to give them a shower schedule. I was appalled. They were adults. I told them to figure it out.) They want rules and when I tell them to make up their own rules, they get really upset. Usually I show these writers that EDS commercial about herding cats and tell them they are cats, not German Shepherds. (Commercial here: http://www.youtube.com/watch?v=Pk7yqlTMvp8&playnext=1&list=PLA6D24848EED73BF4). So if you tell writers they have to have an agent and they have to go to Big Publishing and they have to format their manuscript with courier, they do and they don’t question it. That drives me nuts.

      So over the years, writers got told “that’s the way it is” and had to put up with it. Only the outliers, which is what RWA was in the early years, fought it–sometimes successfully. What I learned was that if you asked your editor/publisher to do something different for you, they usually tried to do it if it was within their ability. No one asked. Or only a few of us asked. Most writers just accepted it as part of the business–and honestly, the impossible press runs were part of the system, evolved from the technology at the time. The returns came to us from the Great Depression to keep bookstores in business, and on, and on, and on….

  13. Robin Brande says:

    Another fantastic post, Kris. Thanks for putting so much time into all this! People who are ready to hear it will hear it.

    • Kris says:

      Thanks, Robin.

      I realize I didn’t answer one of the comments earlier about Amazon’s interface. Yep, it’s not perfect. Neither is Smashwords, which has some trust-me issues of its own as a gateway site. (Meaning a way to other e-bookstores that it is hard for individuals to get to.) Right now–again–gateway sites are pretty much the only way to get to those sites, so we have to trust. Smashwords does its best to report in real time when they get the info. But honestly, I can’t wait for the day when it’s easy to go directly to the other e-bookstores. However, all of this is minor compared to the trust-me issues in Big Publishing. I, for example, can’t read the e-book royalties on two of my conventionally published books through one of the major houses. There’s no real way to understand what those numbers are and what they mean. These are on OP books that the house won’t revert the e-book rights on. Irritating and impossible to figure. But we’re in transition as an industry and things will change.

  14. Hi Kris –

    Thank you so much for this post. You’ve put into words exactly what I’ve been thinking about as I finish my novel and start to head down the publishing path.

    I am a businesswoman. I like numbers. I used to perform fraud investigations. And I don’t understand how in the modern era, this type of business model still works. I constantly want to shout “We’re in the information age! What is wrong with you people!” But I don’t.

    The thing is, I think there are a combination of factors at work. Yes, there’s the ingrained old publishing model, that worked when information was scarce. I also agree with Michael to some extent, that there are a lot of young writers out there that will perpetuate the system because they don’t want to deal with the business. They insist that they don’t like math, or just want to focus on their writing, or whatever. Which is why I think Big Publishing will still be around for a long time.

    BUT there’s a new breed of author out there, people who want to control their careers, their writing, and the ultimate product, who are unwilling to negotiate with Big Publishing. At the moment, this is where I personally am headed (though it does change from time to time). I want to be able to control the cover design of my book. I want to pick how and when and where I publish. I already have to do my own marketing, and I can hire an editor, cover designer, and formatter to make my book as professional (or nearly) as what Big Publishing can produce. Neither do I need an advance, since I work a full-time job, and if I am ultimately able to prove that I can make money writing, I’ll be able to get health coverage through my husband.

    Will it take more time? Yeah, of course. But that’s what entrepreneurship is. And I consider myself an entrepreneur.

    Would I consider Big Publishing down the road if they offered me a great contract? Maybe, but it will be on my terms, when I have some negotiating power.

    • Kris says:

      Thanks, Megan, for the comment and for the purchase. I hope you find The Guide helpful.

      Folks, read what Jerry (Gerald) has to say about auditing publishers. He’s spot-on. And he’s one of the outliers I’ve talked about. He’s sold books that agents told him were unmarketable, and had bestsellers from books that other publishers decided were unpublishable. He’s done really well and is very smart about business.

      I scratched the electronic clauses until it became a dealbreaker. Even then, the old electronic clauses were so much better than they are now. But I’ll have a post about this part later on….

      Robert, you’re right: I think the writers are used to being employees and that’s moved into their writing lives. Agents made it easy for them to continue in that paradigm. I think you’re also right about writers wanting to only focus on the writing. No business owner has that luxury, but back in the 20s with the advent of advances, publishers made it possible for writers to live that way. This is an old ingrained system and it’s going to be hard to change–even for newbies. For every newbie who sells well electronically and says no when Big Publishing comes calling, there are a dozen who say yes and give up 94% of their earnings to be Legitimate.

      Thanks to everyone for the kind words about the columns. Glad they’re helping!

  15. By the way, just picked up a copy of The Freelancer’s Survival Guide on Kindle. Looking forward to learning more!

  16. It sounds to me like these writers that buy into the “trust me” paradigm would really rather be employees and not entrepreneurs.

    I have run my own business for long enough that sending my check to someone else first, or not having access to sales data sounds insane.

    On the other hand, who wouldn’t want to just focus on their preferred activity (in this case writing) and not on the business as a whole? That stuff isn’t as fun or sexy, but it has to be done.

    Great post, as usual. Thanks!

  17. I once wrote a corporate-level training course for EDS, with the stated goal of helping get “…everyone on-board and up-to-speed…” with a new business model — didn’t realize they also made the “herding cats” video at about the same time! LOL!

  18. Kris,
    Once again, right on! Me, I happen to be one of the “outliers,” having refused to use agents for more than 50 years, and having made a fortune–never trusting Big Publishing. Long ago, I actually audited some of those publishers and discovered that one of the reasons they hide all that information is that they’re not dishonest, but simply incompetent. Several of my editors asked me if I would audit their accounting functions (I do that with IT orgs), but all I found was the worst of the worst of all the IT orgs I ever see.

    I also saw what was eventually coming in electronic books, and always scratched the clauses giving publishers the rights to anything but one edition of a paper book. And, again, they were too incompetent ever to give me the slightest opposition, so as far as I can tell, other authors could have kept all their ebook rights (before there were ebooks) by simply scratching out paragraphs from their contracts. The difference for me in all this is well into the 7-figures, and continues to grow.

    I’ve done some stupid things in my business career, but nothing as stupid as the cases you describe. I’m not sure why we bother trying to educate our colleagues about business. It’s their money, and their loss. Ignorance may be curable, but stupidity isn’t.

  19. @ An Onny Mus says: “Smashwords, by contrast, gives me totals only, and a separate graph of when they sold. Of the two, I prefer Smashwords.”

    Wow. I couldn’t feel more strongly the other way. Figuring out how many of each book sold with SW reports is a considerable chore and will get worse as I publish more books and have more sales. Amazon, on the other hand, separates out sales per book and makes it easy. As to total sales for all, just keep an ongoing tally from the monthly reports. Very little math involved.

    Kris – Some of your posts in this series would supposedly not apply to me – I’m a pure indie who investigated the traditional publishing industry years ago, decided there wasn’t enough money in it for the aggravation and degradation in quality of life and put all thoughts of writing aside until I heard about Amazon’s DTP in late 2009. Even so, I find your posts fascinating for the look into what I avoided and for the look into the future I’m pursuing. Don’t ever doubt that your efforts are appreciated

  20. John Walters says:

    Kris,

    As usual, you’ve made my Thursday. (You and Dean that is; he’s got another terrific post up too.) This is like my weekly online graduate school course. I really appreciate the time you put into doing it. Whatever you get out of it, it’s probably not enough but it is well-deserved. Please keep it up.

  21. Rowyn says:

    I’m one of the people who signed on after you started writing about publishing, and I find your posts on the subject fascinating. I suspect I’d keep reading even if you posted only about general business, though; I enjoy writings about business as a rule. (My newspaper of choice is the Wall Street Journal.)

    I never thought about how sheltered writers are from the details of publishing before, or that they would prefer systems that *relied* on them trusting a publisher or agent. Scary stuff.

  22. Mark Coker says:

    Hi Kris, I think this is a great analysis of how trust worked and didn’t work in the past. However, it appears to paint “trust” as a four-letter word, as if trust is a liability, and that authors should avoid situations where they must trust another party. The only way to eliminate exposure to trust-risk is to go it alone and do everything DIY.

    But there’s a downside to this approach. Taken to the extreme, just because an author has the ability to assume the responsibilities of editor, book designer, formatter, cover designer, publisher, distributor, marketer, retailer and customer service agent, doesn’t mean they should. If an intermediary can perform these roles faster, better or more cost-effectively, then the intermediary earns their keep.

    Granted, I come at this as an intermediary, one who believes there’s a role for all the intermediaries mentioned above if those intermediaries add value and trust. I certainly believe Smashwords earns its meager 5-10% of the retail price an author gives up for our commission when we distribute their title. Over the last three years, I’ve lost count of the number of authors and publishers who left us with the intention to disintermediate all intermediaries only because they could, later to lose or delay distribution or burn needless cycles and dollars that would have been better spent focused on writing the next book or marketing their existing books.

    One publisher last year asked us to remove all his titles from B&N because he didn’t trust B&N to pay us. Insane. It’s sad to think how he screwed over his authors by failing to trust a retailer who deserved trust.

    As we move to an ebook world, trust is more critical than ever before. In the old print world, publishing dealt with physical trackable units of product with physical inventory so it was relatively simple to audit a retailer or distributor regarding their true sales. Ebooks are different. With ebooks, you send a distributor or a retailer a digital file, and then the retailer duplicates that file each time it’s sold. They duplicate it on trust. It’s difficult to audit.

    I’ve seen some authors advocate that authors should forget retailers and disintermediate them by selling their books only on their own web sites. While this allows the author to net 100% of each sale, it’s about the stupidest strategy ever. Retailers are important, and earn every penny of their cut, because they connect readers to books in a way that authors or publishers alone cannot.

    For the ultra paranoid among us, the only way to eliminate all trust-risk is to never release a book, because there’s always a risk that someone somewhere will break the trust. Obviously, this doesn’t work. Authors must embrace trust-risk and value-adding intermediaries if they are to be successful.

    Thanks,
    Mark Coker
    Founder
    Smashwords

    • Kris says:

      I think we’re pretty much on the same page, Mark. Let me state for the record that I am not one of those authors who believes that authors should forget retailers. I think that’s silly. And let me clear up something in my original post.

      When I mentioned that this well-known writer wanted to go to a startup to upload for a percentage, I meant a start-up: a friend who decided to start a business that would do all the e-pub work for a percentage–and that included posting on places like Smashwords. I didn’t say that in the original post. In other words, the author would use a gateway to the gateway site. And I think that’s wrong.

      You’re not an intermediary. You’re a distributor. It’s an old publishing model and it still works. I stand by my statement, however. When the other e-bookstores, particularly iBook become easier to use, I’ll go direct to them. Will I stop using Smashwords? No. I’ll be acting like traditional publishing, which goes direct to the large bookstores like B&N and Amazon, and uses distributors to get to all the other regional bookstores. It simply makes sense and keeps all of my financial eggs out of one basket. That’s an established business model and one I plan to make use of. And as I said in the comments, I like that you’re doing your best to keep track of things in real time. That’s hard with data coming in from all over the world.

      Why do I want to spread my income around? That’s pretty simple, really, and is no reflection on Smashwords. It’s prudent to have many income sources instead of just one. If something (god forbid) were to happen to my only gateway site, then I wouldn’t get paid from any of my e-books. I’ve been through publisher bankruptcies, bookstore collapses, distribution collapses, and other regional problems, and have learned that even the most established businesses can run into serious financial difficulties (witness Borders). So in running my business, I’m going to make sure I spread my income streams around. I’ve always done that, publishing with more than one publishing house, in more than one genre, as simply two examples.

      When that writer I mentioned in my blog post first mentioned this start-up, I told the writer to go to Smashwords for one-stop e-shopping. She didn’t want to because she wanted to get the whole package–the cover & everything–and was willing to pay a percentage for the lifetime of the e-book for all of this stuff. I say if the writer doesn’t want to do everything, hire someone to design the book for a flat fee and then upload to the distribution channels yourself. If the uploading is too much work, go to someone like Lucky Bat Books that will set up the accounts for you in your name for a flat fee. No percentage to anyone except the distributors. Because that’s all that Amazon, B&N and (yes) Smashwords are. You’re distributors who get our books to the readers.

      As for trust-risk, yes, there’s always that. But writers and all business owners need to be sensible about it. In traditional publishing, the “trust-me” model has existed too long and is now moving to e-publishing. I don’t know if you realize it, Mark, but there are a number of agencies and new startups who will do all this work that I’m saying the writer can have done for a flat fee for a percentage, and then taking the work to Smashwords, Kindle, et. al. (Some are charging as much as 50% of the profits to do this.) And I think those organizations fleece the writers, and will make the trust-me situation worse.

      Like Dean, I’m trying to get writers to think like business people. I did not mean for them to ignore common-sense parts of the business like distributors or retailers.

  23. Like Alex above, I had the same thought after formatting a few of my own works: hey I should hire myself out for this! (And came to pretty much the same conclusion as Alex did too!). Kris, I share your fears. I used to wonder what would happen when everyone started self-publishing. Would the big six collapse? Will there be so much unreadable drivel put up online that the entire literate population of earth will swear off reading forever, and just rewatch The Wire instead? I no longer believe that. Most people who don’t write well also don’t write very much. They will put one or two things up, not sell them, and then quit. Many people using Smashwords won’t even go to the trouble or reading the formatting guide to get into the distribution chain. Or they keep writing and get better with practice. Right away they are giving up on 80% of the value of using smashwords at all. I know people like this. On the other side, the established writers with backlists, I believe there is a danger percentage model will be the norm. Just borrowing Dean’s cost estimate of formatting, posting, and making a cover for a ebook/POD project of $350 and tripling it for the extra work of working with a client other that one’s own self, I could see where $1000 from formatting – to uploading project could be reasonable. But say it’s only $350, and say you approached a lot of pros offering to do the work for $350 a title one time fee, and someone else offers them the same work for for no cash down but a mere 20% of royalties forever, it think the person taking the percentage will get more work. The number one rule we learned in writer camp is “money flows TO the writer” after all. The writer will have to believe that the book is going to earn back that $350, and based on friends of mine, when that doesn’t happen in the first month they are going to melt down. I think it’s going to be a very small minority who will both write enough to have a profitable indy footprint and also crunch the numbers to see what’s going to maximize their revenue long term.

  24. LP King says:

    There is a model for what’s happening in the book publishing world: the music industry.
    Writers, and those interested in books and publishing, need not fall into the melee. Look around you. Look at what’s happened in another industry that’s faced similar upheavals, albeit for different reasons. Your customer is similar, your product is similar. It’s a learning opportunity.

    Now for something completely different.

    The whole trust thing confused me no end, when I first started participating in online groups (back in the dark ages, about 1996). I didn’t realize that so many of the people involved with the early ‘internet communities’ had a background in writing and/or publishing. Once I’d researched the way the publishing industry worked, back then, things were clearer. It really is pretty weird to come from a business background — particularly if you’re a bean counter who did their time as an auditor — and have people deriding you for lack of trust. In my experience, a certain amount of trust is necessary. Trust that someone will do what they say they’ll do, that they’ll perform up to a stated standard, that they’ll deliver the goods. But everything is more or less verifiable. When verification procedures are deemed unnecessary, my gut reaction is to wonder where the fraud might be.

    One more thing: just because something is difficult to audit does not mean it ought not to be audited. It’s more of a question of cost effectiveness. Any well run business of a certain size has all kinds of controls in place. If it doesn’t, how can it optimize its business processes? So if a business tells me it’s difficult, that’s no excuse. Only if customers — and the providers of the product are in this case customers just like the end purchasers are — demand trustworthiness will the businesses in question live up to that expectation.

    That’s one of the things about Amazon that’s always given me pause: its lack of transparency. I guess now I extend that observation to Smashwords. With all due respect to Mr. Coker, I think he’s muddying the waters with his observations on the subject of trust.

    I think any writer who wants to not know has to be in the business more for ego than for art.

  25. To be fair to writers, the desire to have “someone take care of me” is pretty universal, in my opinion. We see it quite a bit in politics and religion, with populations that believe everything will be okay if they just do what Politician Bill or Pastor Jerry tells them to do. It’s one of the ways dictators and one-party states survive too. There’s something about human nature that seems to make it hard to step up and say “I’m responsible.”

    That said, I make a *lot* of money in my day job because I’m willing to step up and take responsibility. Most of your post is basically saying the same thing. The writers who take responsibility for their careers, regardless of what level of trust is required with various distributors, will do better than those who won’t. It should be obvious, but clearly it still needs to be said.

    Thanks.

    • Kris says:

      Good point, Ed, although it’s not quite that simple. The folks I know who are having these issues do take responsibility for their careers in the context of the old model. They make sure their writing is better with each book, they are active in the negotiations via their agents, they walk from bad contract terms. So this is a strange new twist on the problem.

      LP, I agree: difficult does not mean impossible. Of course publishers should be audited. And it’s easier now than it was. I would hope that systems within publishing houses start to change, because Big Publishing isn’t going to go away. The writers who stay with Big Publishing are going to have to demand more accountability in both the contracts and in the royalty statements.

      Good points, Michael. Glad you & Alex stayed away from the dark side. I also think there’s a danger that the percentage model with be the norm for established writers. They’ll just stumble into it with no thought. We’re seeing that with the various start-ups, some big like that one featured in the NYT a few weeks ago, and some small like the one my writer friend ran into. Convenience and lack of thought is easier than examining the new model and making different choices.

  26. [...] here with Kristine Katherine Rusch’s ‘Trust Me’ post for Business [...]

  27. Zoe Winters says:

    It makes me LOL every time you say… “real business, not publishing business” hahahahahaha.

    Yes.

    I think the trust me model might be the basis of why so many writers have zero business sense.

    • Kris says:

      I wonder, Zoe. Is it cause and effect in that way? Or do writers with no business sense thrive in traditional publishing, while those with business sense eventually give up in disgust?

      Julie…the amazon/smashwords system is one million times better than the current traditional publishing system. At least we’re getting numbers, rather than waiting 2+ years after publication for data that is 1) unreadable, 2) inaccurate, and 3) already out of date. I too worry about the information coming from any site, be it a brick & mortar distributor or a digital one. The only way to know exactly is to audit all the time, and who wants to do that. You do realize, however, that Amazon is constantly audited by the major corporations it does business with, so we benefit from the big corporations’ business dollars. It makes the systems more accurate for everyone. (I know this because Amazon has non-book items.) I don’t know if this is happening with B&N, but I suspect it is. So the bigger businesses, like those and, I suspect, the iBookstore, etc, will always have that benefit. Which is why I want to go direct whenever I can.

  28. Thanks again, Kris – fantastic post as always.

    I admit I’m still mulling over the idea of Smashwords and Amazon and how the trust issues apply to them. I think partly because, as Mark references above, there is a lot more (potential) room for fraud with an eproduct that is extremely difficult to audit in terms of volumes of sales…and also because I can’t quite classify any of the new eportals (Smashwords, Pubit, Amazon Direct or Createspace) as purely distribution and/or printing. The fact that they issue ISBNs and market what is in effect an imprint directly to distributors, etc., makes me wonder if it’s more of a hybrid than purely one thing or the other. But this could just be displaying my ignorance of the publishing model more generally.

    I guess part of it is, I find myself wondering how many of the big publishers will bring this form of distribution inhouse…creating their own stores to avoid cutting in some of the online portals and marketing themselves more as a “channel,” so closer to a network model than the previous, brick and mortar model. I would think I’d be running numbers on a number of different hybrids of this kind if I was working for a company like that.

    But again, I’m fairly new to publishing, so maybe I’m not realizing just how similar this is to the models that came before.

    I know for me, I have trouble with the trust model, so it’s interesting that it’s gained such wide credence with authors. I worry about Amazon, Smashwords, etc. not due to any specific concerns about malfeasance but more because I know how easy it is to screw up digital data…so I already feel like I’m forced into a “trust model” so it’s a bit ironic that it’s relatively transparent compared to the traditional version. :)

    Thanks again…a lot to think about here, and a good reminder about personal responsibility. Like Ed though, I think this is a fairly general human trait…at least from my experience, primarily in the US. I see it in the corporate world all the time, the whole “take care of me” attitude and unwillingness to be accountable or step up and determine the truth about what’s really going on. Sadly though, I see very little actual “trust” as comparted to a kind of opting out and victim mentality.

  29. Yeah, honestly, I’m not too worried about the numbers. I was more thinking it says more about me, in terms of my level of trust/need for control than it does about the companies themselves, or their business models (or even the tech). And yes, that doesn’t extend to actually wanting to audit personally, even I’m not that much of a control freak! :)

    The part I’m still pondering is if there will continue to be this merging of publishing and distribution especially in terms of ebooks; but again, not sure if that line’s always been somewhat blurry and I’m just a newbie on how the industry works.

    • Kris says:

      I don’t know, Julie. That’s one of those questions I would have thought impossible five years ago, and now we’re pondering it. Time will tell.

  30. Cindie says:

    Thanks for another great blog. I wish every writer in the world would read it every week. It would make my job so much easier.

    I spend most of my time these days explaining what Lucky Bat Books does. People’s responses to what we’re doing fall into a few categories, which I think say a lot about where we are in publishing.

    First are the nonwriters who are familiar with the royalty model who can’t believe or understand why we don’t take a percentage. They are horrified that we are leaving easy money on the table. After all, the writers are already trained to give it up. I try to explain that I am, first and foremost, a writer. I want the business to be better, to be fair to writers, so that I can reap those rewards too. I can wait around for that to happen and watch as the new model just becomes the old model on a smaller scale, or I can be the change I want to see. I think we’ll see a lot more businesses like mine pretty soon. And I think that will be good for everyone.

    The idea of getting a piece of the sale of a product in perpetuity is awfully tempting. Short-sighted, I think, but tempting.

    A second group consists of more seasoned writers not quite trusting that we do exactly what we say we will. We do not upsell. We do not add hidden fees. But it’s hard to convince writers of that. They hear flat-fee, and they think hardsell, upsell, scam. Even if they know Big Publishing offers a bad deal (I’m primarily talking ebooks here), it’s better than taking the risk of being scammed. And I don’t blame them. The number of scams out there, the costs writers slowly incur, is staggering. The royalty model might suck but at least they know what they’re getting.

    I also get seasoned writers who feel that if a publisher isn’t trying to take a chunk of their sales forever, then that publisher doesn’t believe in the book. They see the royalty model as meaning the publisher makes money selling books. They see flat-fee as the publisher making money from selling services to writers. The logic therefore is that only the royalty model can sell books (even if the writer is doing his or her own promotions and publicity). I know I’ve heard this myself over and over through the years, especially in terms of vanity presses. If the company publishing the book has a financial stake, then it will work harder for the book. That’s the thinking. But in my experience, the hardest worker for the book is the writer — and has been for quite awhile now.

    It’s true that whether a writer with my press sells a million copies or ten, I make the same. But that was true when I was ghostwriting or freelance editing or magazine writing or anything else I’ve done. My cut of the profit shouldn’t dictate the quality of my services. As writers, I don’t think we work harder on a story for an anthology that offers a royalty than we do on one that offers a flat price. But Big Publishing has done a great job selling writers on the idea that they take that royalty because they care. And workshops and classes have been selling the same message for decades. Upfront costs have been a red flag (with good reason) for a long time. Yes, money should flow to the writer. But paying something upfront to get more down the line isn’t changing that flow.

    The final group are new writers who know nothing of Big Publishing. Some in that group do the numbers and see the benefit of fee-based publishing services. Another will do just about anything, sign away anything, if it means paying nothing up front. And a third simply have been invested in the idea of selling to NY for so long, they just can’t let go of the dream, no matter the cost.

    Like you said, there was only one way to get our books out for a very very long time. But that time has passed. Now there are options. The total trust-me model is alive and well. The total DIY model is exciting but sometimes daunting. But there’s a third model too. A middle ground. Writers don’t have to give up a piece of their earnings because they don’t know how or want to learn how to do a cover, for example. But it’s no easy task to get them to believe it. Once they believe it, I hope they start demanding it.

    • Kris says:

      Great post, Cindie. I hope more and more writers turn to places like Lucky Bat to do their work for them.

      But I must tell you that your post scared me too. That whole idea that writers want the percentage taken out because it means the publisher believes in them….holy crap! I’m speechless. I really am.

      Again, thanks for the comment. And the good work.

  31. Thank you for taking the time to write this.

    My husband, Brian Underdahl, has had this same problem with computer book publishers over the years; the royalty statements were impossible to understand. Taken together, his sold books and returned books equaled more than the number that was printed (by quite a bit). It seemed to me that some returns were sent out over-and-over (maybe they were dog-eared), and counted against him each time. We discussed audits, but he felt he would be blacklisted.

    I was in Quality Control for many years, and was astonished at how few folks would take responsibility for anything. A fresh pair of eyes is always a good idea, but crowds would follow about six of us with their little tasks in hand, not just wanting verification of accuracy, but literally expecting us to do the work for them. They had no self-confidence.

    Do Americans mock mistakes more than other groups? Are Americans poorly educated? Both?

    • Kris says:

      Financially, Americans are poorly educated. It’s a serious problem in this country and has led to a lot of our recent problems. Politics aside, however, let me just say, yep. Your husband’s experiences are the norm, I’m afraid.

  32. Thank you for this. I realize how much I was in that “I’ll just trust you” mode, and am looking forward to moving onward and upward. My paradigm shift took about two days, thanks to J.A. Konrath. I’ll never think about publishing the same way again.

  33. Great post and great comments. Great perspective from Cindi. Michael Stackpole has an editorial on huffpo about the percentage model http://www.huffingtonpost.com/michael-a-stackpole/borders-bookbrewer-vampir_b_823926.html

    There are several comments from a Bookbrewers defending their packaging service’s percentage model. “I’ll take care of you” is one of his main selling pitches:

    http://www.huffingtonpost.com/social/Dan_Pacheco/borders-bookbrewer-vampir_b_823926_78308519.html

    QUOTE: To be totally honest, we (BookBrewe­r) aren’t that interested in authors’ royalties. The only reason we keep a percentage [5%] is so that you know we have an incentive to promote you and your content.
    UNQUOTE

    Just keeping a percentage so that you’ll know they care. That’s so sweet of them. I suspect they know that for the majority of projects they work with that 5% will make them next to nothing, but they will inevitably work on a few outliers.
    If they had done Hockings 7 (?) books they might have made about $100,000 in less than six months for a finite number of hours labor. I could seen companies asking for this and getting it from a lot of writers, 5% SOUNDS like nothing, especially compared to 15% to an agent, or a legacy publisher’s cut of ebook rights, but if you do twenty books this way, that’s like signing over full ownership of one of them to the packager for free.
    The great news that writers don’t have to this. They can learn to do much of the works themselves, and/or support writer-friendly businesses like Lucky Bat instead. It’s up to the writers though. If writers won’t sign away percentages then that model won’t pay. Maybe it’s already starting to happen. I gather Bookbrewer used to ask for a much higher cut.

    • Kris says:

      Thanks for the post, Michael. Yeah, I’ve heard that quote before from agents. Writers do need their egos stoked. The best news in your piece is that Bookbrewer used to ask for a bigger cut. Maybe writers are saying no. But considering Amanda’s post that came in at the same time, I rather doubt it.

      Amanda, welcome to the world of writerland. This is why Dean started writing his Killing the Sacred Cows. It helps the writers who want to know, but most–quite seriously–most writers want to remain ignorant. It drives me insane and makes me shaky at mainstream writers conferences. Good thing those things are short. If they were long, I would make headlines–and not in a good way. :-)

  34. [...] Lambda Awards Being a Female Gamer Kristine Kathryn Rusch discusses the business of being an author Woman wins award, man gets attention Ian Sales’ SF Mistressworks & starts the SF Mistressworks [...]

  35. I’ve actually been talking about the e-publishing wave on my own blog and someone left a comment that just made me scratch my head. Basically, they said that Barnes and Noble was being sued by Microsoft for the Nook (no explanation why), ebooks were a fad, and we should all go back to reading paper books. It was such a head in the sand comment that I just deleted it. I’ve also heard it said by authors that e-publishing is just throwing a bunch of garbage out into the world and is not worth their time. They would rather have a big publisher come pick up their books (but won’t because their writing is misunderstood) or blow their money with the old vanity presses. I don’t get it.

  36. Sarah Stegall says:

    Kris, it looks like at least one publisher is lashing back at the e-publishing phenomenon. From the Poisoned Pen Press website, publishers of mystery fiction:

    # We do not consider self-published or Print On Demand writers.
    # We cannot consider any work which has appeared in another form, such as e-book or P O D.
    # We seldom consider writers who have previously been published in print and/or as e-books.

    http://www.poisonedpenpress.com/guidelines/manuscript-submission-guidelines

    I especially like (not) the first bit, that they won’t even CONSIDER writers who have previously been e-published. Really? Looks like the stigma against self-publication is very much alive and well in at least one publisher. Too bad.

  37. JR Tomlin says:

    Well, at the moment, I’m not considering them either so maybe it goes both ways. Mind you, obviously Amanda Hocking is. Perhaps I would too if they offered me that much money. Maybe not. At the moment, I’m doing better indie than I did with publishers. So… their loss, not mine.

    Retweeted this, Kris. Great post!

  38. Robert says:

    Kristin; just stumbled across your blog this AM. Cogent. Now a follower.
    Robert

  39. [...] old model.  Here’s another about the future of agency and e-books. Kristine Kathryn Rusch wrote a great article on trust in the publishing industry that might also apply). This entry was posted in Blood for Blood, New Releases, Writing Links, Writing Process and [...]

  40. [...] to. The evidence is clear, the documentation is there for anyone caring to research it. Here’s a great place to start. This is a business-savvy individual with experience in traditional publishing, and reading what [...]

  41. Jacquelyn says:

    thanks! saved me. Said what NOT to do, but not WHAT to do. Do you have a blog on that?

    • Kris says:

      Scan through the various publishing posts I have, Jacquelyn. I put up one each week. I started in October. Since I don’t know where you’re at in your career, I can’t give you a specific link. But I have many many posts. Here’s the link to the TOC. And for the recent posts, there’s this link.