The Business Rusch: Common Sense and the Writer
Kristine Kathryn Rusch
A friend of mine runs a flat fee menu service that helps writers publish novels, short stories, and nonfiction books as e-books. Her service will also help writers publish print-on-demand books as well. By a flat-fee menu service, I mean this:
If you prep an e-pub file and post to the e-book distributers yourself, but you can’t design a good cover to save your life, you can hire my friend’s company to design the cover for you. She’ll charge you a flat fee for that. I have no idea how much, since I’m not hiring my covers out. But let’s say—for the sake of argument—that she’s only charging $250 for a cover. (For all I know, that might be high. Or low. I really have no idea.) That $250 is all she would ever charge you for that work she does on your book.
If you don’t know how to do anything except write—if you can’t even log onto Kindle Direct Publishing without getting hives and you don’t know what Pubit is, if you’re dyslexic (like me) and find copy editing an impossibility, and if you don’t know the difference between an oil painting and a charcoal drawing—then she’ll take your book from your word file and, in consultation with you, turn it into an e-book. Then she’ll help you distribute it to the various e-bookstores, again all for a flat fee.
She has worked out a system that once the book is uploaded onto the various e-book distributors like Amazon and Barnes & Noble, she will never ever touch the money that comes from those services. In fact, she won’t even be able to look at the information they send you about the book’s earnings, any more than she could peek into your bank account.
Again, she does this for one sum—clearly a greater sum than she would charge for just a cover. But once that sum is paid, you never have to pay her another dime. Even if the book becomes a bestseller. Even if the book remains on sale for 25 years. She gets her one-time fee, and nothing else.
So imagine my shock when she posted on a blog we both frequent that she’s been getting a lot of flak for this. People have accused her of running a scam, of mistreating writers, and of taking advantage of writers. “Money flows to the writer,” they tell her, as if she’s somehow preventing writers from making money.
At the same time she made that post, I was trying to help a friend get his backlist into print. Several months ago, I had recommended that the writer friend use my publisher friend’s services to get the books published. But my writer friend had apparently ignored my advice. Like so many other writer friends in the past month, this writer friend asked me if going with So-N-So, who charged 15% for the life of the project, was a good deal.
One friend phrased it this way: Considering the fact that I will never ever learn how to do e-publishing on my own, am I better off going with So-N-So and losing 15% for the life of the project than I am to never ever get my backlist out in e-books?
Honestly, that’s a good and logical question. I know that many writers, particularly established writers with multiple deadlines, haphazard income, and lots of health or time issues are asking the same question. Most of them are defaulting to their agent, someone they “know and trust,” to do the backlist work for them.
Since agents have as high or a higher learning curve than writers do, not to mention the ethical issues and the possible illegality of an agent running a publishing business, the idea of going to the agent as a default really makes no sense. But let’s leave agents out of this, since writers tend to be insane over the issue of agents.
Let’s just go back to that question: Considering the fact that I will never ever learn how to do e-publishing on my own, am I better off going with So-N-So and losing 15% for the life of the project than I am to never ever get my backlist out in e-books?
In reality, it’s a Hobson’s Choice. The choice isn’t between never e-publishing or going with someone who will take 15% for the life of the project. The question shows that the questioner simply does not understand that there are other choices.
Let’s take “never e-publishing” off the table. I think everyone with a backlist (and those who are creating their own backlist right now) should publish their work. Sometimes it’s viable to go with an established traditional publisher. And if you have my writer friend’s attitude, going with an established traditional publisher is best.
But most writers have tried to resell their backlist publically, and have been unable to in this tight market. So many of these writers know that there is money in e-publishing a backlist, but the writers don’t want to or can’t do the work, so the writers believe they have to find someone to do it for them, and find that someone now.
The “now” part is also a fallacy. The new revolution in publishing isn’t going to stop any time soon. It’ll be around for years and years. So taking some time to research the right method of e-publishing your backlist would be a good idea.
Let’s say, though, you have researched the do-it-yourself method and realize that you are unable, for whatever reason, to do it yourself. Yet you still want your backlist up.
You will need someone to do the work for you and you’ll need to pay that person. The question then becomes how to pay that person.
If you lack money, the 15% option seems like a good one. And it might be, if you only want your books in print. If you don’t care about making a dime on them, then by all means, hire whomever contacts you, trust them, and let them put the book up.
But if you actually want to make some money on the books, then you need to behave like a business person. You need to think long term.
Here’s where the 15% model falls apart. Imagine this: Your backlist is in print. Let’s say it sells steadily. Let’s say your backlist earns you $500 per month. I’m being very conservative here, assuming only a few books up, and not nearly as many sales as most established writers have. But $500 per month makes the math easy for me.
If you earn $500 per month, then you’re making $6000 per year on your backlist with no front list, nothing new added. Over ten years, with no increase in sales, you’ll earn $60,000. (I fully expect an increase in sales for everyone. Right now, e-book sales are a tiny fraction of the market. All experts believe that e-books sales will reach 50% of the market in 5 years. Your sales numbers will increase as new readers come in. But for the sake of this piece, I’m assuming no growth.)
In that first year, you will pay your 15% person $900. That seems like a good deal to put up your entire backlist. But over ten years, you will have paid that same person $9,000 for no additional work. And if those books are still selling twenty years after that, the person you hired will earn $18,000 even if they don’t touch the e-books ever again.
Contrast this with a flat fee option. Let’s say it cost $2000 to put up your entire back list. In the first year, your flat-fee deal won’t look as good as that 15% deal. You’ll only earn $4000 on your backlist, as opposed to $5100 for the 15% person.
But in the second year, you’ll earn the full $6000. After ten years of sales, you will have earned $58,000. The person who is still paying 15% will have earned $51,000. In twenty years, you will have earned $118,000 on that backlist. The flat-fee person will have earned $102,000.
Still, you think, not bad money, especially since you haven’t done any work on it yourself except the actual writing.
But there are several more problems with the 15% option. Let’s talk about them.
The 15% person will be the “publisher.” This means all of the Kindle, Pubit, iBookstore, Kobo, and Sony sales information and the checks will go to your 15% person first. They’ll take their cut and forward 85% to you—just like agents do.
Only you will have no legal right to see the paperwork involved. As far as Kindle or Pubit or any of the e-book vendors are concerned, the publisher of record is the 15% person, not you. So you can’t go to Kindle and find out sales figures or earnings for your book.
This, by the way, is different from the arrangement between an author, agent, and a traditional publisher. The legal agreement is between the traditional publisher and the writer, with the agent as a negotiator. The agent receives the paperwork first, only if the writer designates that in a contract.
In this e-book vending world, the 15% person will be the publisher, and will get all the materials. Unless you have an iron-clad written agreement with this person (and most writers don’t have one with their “e-stributer”), then you will never have any right to see sales figures or paperwork.
And because writers refuse to understand what this means, let me spell this out for you. If you don’t see the paperwork, then you will not know if you’re getting all the money you’re entitled to.
I know, I know. You trust your agent, e-stributer, friend. That person would never cheat you. And let’s say you’re right. That person would never cheat you. But what happens if that person gets hit by a bus tomorrow? Would his heirs be as trustworthy? Would his heirs even know how to run the business? Would his heirs know that you’re entitled to 85%? Would his heirs honestly report the income to you?
Right now, a group of writers are having trouble with a long-established agency whose owner died, and whose heirs do not know how to run the business. This is causing all kinds of legal problems as well as financial ones for the writers. And that’s with an established business. Many of these 15% people are doing the job as a favor for friends or writers or relatives.
No one has thought long term.
And no one thinks of running a credit check before hiring the 15% person. Or seeing if that person has a good record with their Better Business Bureau. Or seeing if that person has an arrest or conviction record.
Most writers just hire someone and trust them. And that makes me shudder. The writers hire someone for the life of a project and don’t even do the same kind of work an employer would do before hiring a bus boy at a restaurant.
Nor do the writers draw up a legal agreement with this 15% person. They rely on the person’s word. They hand over their creative work, something that could earn hundreds of thousands of dollars in its lifetime, and don’t even think twice about the legality of everything, about accountability or about fraud. They never run a background check on the person they’re hiring, and often they haven’t even met the person face to face. That person is just a Facebook friend, an e-mail buddy.
I’m not saying that the 15% people are all scammers. Nor am I saying they’re all out to cheat their friends. But I am saying that this situation is ripe for problems. Even with the best of intentions, most of these 15% people have no idea what kind of accounting nightmare they’ve set up, let alone have designed any way of accurately tracking income.
And what happens if the 15% person has a serious financial reversal? That person’s wife suddenly gets ill and has no insurance, so the 15% person has to pay tens of thousands in medical bills. Do you think that 15% person will accurately report that year’s income? Would that person pay the medical bills first, intending to pay you later? Where will the “later” money come from?
Most people never ask those questions or do the research. So years later, when they get taken—and they will, either by a friend or a friend’s relative or by simple bad accounting—they’re surprised. And they shouldn’t be.
So when people ask me that question my writer friend asked—Considering the fact that I will never ever learn how to do e-publishing on my own, am I better off going with So-N-So and losing 15% for the life of the project than I am to never ever get my backlist out in e-books?—my answer is simple. If you only want your backlist up for your fans to read, yeah, I guess you’re better off. If you want to make money, no. You might make money for a few years, but there’s no guarantee that the money train will continue. Your friend might tire of it. He might die. He might decide the accounting is too hard to continue.
And you will have no legal recourse. You made an agreement with this person, did not research them, trusted them, and didn’t sign a contract.
P.T. Barnum had a word for people who do things like that. He said there was one born every minute, and sadly, he was right.
Here’s the ironic thing. No one accuses these 15% people of “running a scam, of mistreating writers, and of taking advantage of writers.” Most writers who don’t want to publish their backlist themselves have simply moved to this new model without thinking about the implications. They assume this is the way this has always been done.
But “always” doesn’t apply here. The percentage model for agents that dates from the mid-20th century works differently, as shown above. Until recently, agents have acted like real estate agents, taking a percentage of the sale to a single entity—the publisher. That publisher has a contract with the writer.
The new 15% model does not include a contract between the author and, say, Pubit or the iBookstore. The agreement is between the iBookstore and the 15% person. The writer hasn’t signed anything and, in fact, is not even considered a party to the deal.
This is a new thing, folks, and something to be very, very wary of.
If you are unwilling or unable to do the work to publish your own work, then hire a flat-fee company. Yes, yes, I know, you can’t afford the up front money. Then work out a deal with the flat fee publisher to pay in increments.
Or—here’s an idea—save a small portion of each paycheck or writing check, and put that money in a special publishing account. Once that account has the needed fee in it, then hire someone to e-pub a book. Keep doing that until your entire backlist is up.
Yes, that might take months or even years. But you won’t be losing money on each book. Better yet, you won’t set up the possibility of being scammed. Companies like my friend’s flat fee company don’t get the paperwork first. They help you set up your own account with Pubit and Kindle Direct Publishing, and then they never ever see the paperwork again. They don’t need to. Because they got their money, and they will never see another dime.
Why, then, are these people being accused of being scammers?
Because they’re asking for money while they do the work. In the writing world, no one has done that for generations. The only people who got paid up front in publishing for the past seventy years have been the writers. Writers got an advance. Never mind that the advance was an advance against royalties—a loan, in other words, that the publisher could rescind. Writers got used to getting money and paying no one up front to publish their work.
Indeed, fifteen years ago, anyone who asked for money up front to publish a book was a scammer. Because publishing was different then. Often those folks never published the book. They just took money from the writer.
Now, though, that’s no longer the case. Now new business people are moving into publishing with a professional attitude. Every other profession demands payment for services rendered.
Would you call your dentist a scammer if he asked for a down payment on those crowns he ordered? Do you accuse your doctor of mistreating patients because she asks for payment when you have your annual checkup? Do you think that lawyers who ask for retainers are unprofessional? What about roofers who want half up front and half on completion of the job?
Those are the people who have moved into publishing. Flat-fee people who expect to be treated like the professionals that they are. They’re providing a service. You’re paying for that service.
It’s that simple.
If you don’t trust them, then don’t hire them. Or better yet, do what you should do with the 15% people. Check the records. Do a background check, a credit check, and see their standing with the Better Business Bureau. See if they’re a legitimate business before you hire them. Then do a test case—maybe a short story or a short book, something that doesn’t cost you an arm and a leg. If you don’t like their work, don’t hire them again.
It’s really that simple.
Honestly, I’m very, very frustrated with writers who refuse to act like professionals in this new world of publishing. Writers who want someone to take care of them, who want to make a fortune without doing any work except the writing.
Another writer complained last week that all he wanted to do was write and wanted someone to take care of everything else. Yep, and I want a million dollars delivered to my house on my birthday by a naked Brad Pitt look-alike (or hell, a naked Brad Pitt). Ain’t gonna happen.
If you want to have an international career—and that’s what successful writers have—then realize that you have a small business. Act like a business person. Produce the very best work you can, and for those jobs that you can’t do yourself, hire the best help you possibly can for the best price.
Research, research, research. Then make the best decision for you. Can’t afford it? Save your pennies until you can. Work out a payment plan. Do what you would do with any other service you purchase. And stop trying to find shortcuts. In the long run, those shortcuts will lead nowhere.
You’re not doing something small here, so stop acting as if you are. The decisions you make today won’t just have implications for you; they’ll have implications for your family and your heirs as well. You can keep your own e-book in print for decades. Make sure you’re getting all the money from that book, not some 15% person you hired on a whim twenty years before.
Even though I’ve had a long career as a nonfiction writer, I make the bulk of my earnings on fiction. I don’t charge for the free fiction on this website. I hope it’ll lead you to my novels or my other fiction elsewhere. But for the most part, these blog posts are one-shot deals that take time away from my fiction writing. That’s why there’s a donate button here. The business blog has to pay for itself.
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