"My work may be garbage but it's good garbage." Mickey Spillane
I’ve been asked to write about royalties and contracts as many new authors have run afoul of bad or scammy publishers and need to know their rights and how to tell good from bad.
Two writers organizations (there are more) have model contracts that immediately came to mind so I’m posting links to them.
EPIC is a good organization. They have an award that has gotten some fine reactions. However, they charge their members (this can and ought to be paid for by the publisher instead of the author) in order to cover the costs of their yearly convention, which can be a lot of fun for their authors and others.
The SFWA contract is mainly directed at doing business with the majors and middle ranks, but can be a great source of information for those doing business with the small press. SWFA has public information pages which ought to be read with frequency.
The traditional publishers have long had a graduated royalty rate based upon how many copies are sold. They base their royalties upon cover price. But the average breakpoints have been 8%, 12%, 15%
You will find cover price as the base in the royalty clauses of both sample contracts. The standard for ebooks is 40% of cover price if sold directly through the company store and 25% of cover price when sold through distributors. Most ebooks are sold through distributors and very few ebook publishers are set up to host a store on their site. A good example of how a onsite store is set up can be found at Renebooks (Renaissance Ebooks).
Small press royalties on print tend to be 10% of cover price.
Never ever go with a contract that says royalties are based upon net or gross receipts. These are too easy to abuse and hard to track. Companies will include all of their costs (cover, editorial, PR) into their calculations, making the total come out of the author’s due royalties.
On the flip side, Amazon, for instance, has ways to view the sales figures for books that have you as author. This one I have not figured out for myself, but Angeline Hawkes uses it for all of her book sales regardless of publisher, and she is a very savvy author.
Reputable writers organizations are a must for the protection of authors. Most will not grant admission to self-published authors, however EPIC and NWU (National Writer’s Union) will. HWA (Horror Writers Association) will give an affiliate membership to authors with small press credits. One of the largest services that a good writers organization will give you is access to their grievance committee, which will go to bat for you against bad publishers and try to get you paid.