Tom, by “net receipts” I mean the actual amount publishers receive from all distributors of a given book.

Can you define “net receipts”?

Tom

Ask for a higher percentage of e-book net receipts. Ask for 50% and see if they’ll come up to 35%.

I’d also ask what percentage of print books are typically discounted more than 52.5%.

I’ve looked at some costs based on the following specs for your book:

format of 185mm x 125mm, paperback
200 pages
initial print run of 5000 copies
RRP of $19.95
RRP of $9.95 for e-book version.

Based on these specs, we can offer you the following:

A royalty of 9% of RRP, rising to 10% of RRP for any reprints, for units sold up to and including a discount of 52.5%.
Our standard rate of 10% of net receipts for books sold at a discount of over 52.5%.
A total advance against royalties of $4000 + GST to be paid in four instalments ($1000 + GST on signature of contract, $1000 + GST on submission of half of the final manuscript, $1000 + GST on submission of the second half of the final manuscript and all images, $1000 + GST on publication).
A royalty of 25% of net receipts on e-book versions sold.
This arrangement is based on you supplying most of the images (whether you’ve taken the photos yourself or got permission to use them from other sources), but we are happy to assist with some pic research, particularly for more travel-related images.

I’ve looked at the dates and we’d like to publish your book in April 2014, meaning that your manuscript and all images would need to be submitted by Monday 22 July 2013. You would work with our editor while writing the manuscript, and also for the next four months after that (August–December 2013) as we put together the book.

Orson, I think we agree on the need for high royalty rates for ebook authors. We also agree that Amazon has the lion’s share of the market, which is troubling in many ways.

If I want to match the sales, I have to be a real publisher. But that would increase my cost to traditional publishing levels. Nothing is free.

There is no real money in the publishing business and there is no real greed on the publisher side. That’s easy to tell. Ask one of their accountants or check their profit %.

I don’t understand why authors are hostile to publishers. It all comes down to misinformation and limited knowledge in the subject I guess. Or it could be a psychological think, publishers being the gatekeepers who judge our art and all.

Publishers invest their money in publishing my book and they get what is technically a 50% share of the true profit. It’s compensation for their knowledge, capital, and time, and my knowledge, talent, and time. Talent=Capital in this equation. We make 8% or 10% of retail each. or 50% of ebook wholesale. Or whatever. It’s a still a 50/50 deal for a good publisher that knows the market. It’s much worse for the publishers that are not big enough to handle the statistical risks involved in picking art out of the slush pile, or those who do not know enough about the market, or those who invest in very bad authors

It makes me sad when authors think Amazon is their friend and publishers are their enemy. Amazon just wants pieces of a pie they do not deserve to have, because they do actually not the job of those who have those pieces traditionally.

Sorry about the rant. It’s just that nothing really changed with ebooks. It’s still the same business.

2) Readers perceive the ebook as something that should cost a lot less than the retail price of a paperback, so $7 also makes sense from their point of view.

3) Publishers do not have the high POD production cost, but they do have overhead and other expenses I do not have. They also do more that what I do when I drop my book on amazon to put it into retail. I would say the publisher costs just about match the POD cost.

So there we are, everybody is making the same money on ebooks and trade paperbacks.

Now, since the ebook is half price, the author should get 2x percentage of retail or 4-5x of wholesale. This is about 40-50% on wholesale so the 50% you propose sounds fair. The author still makes what he would make on 8-10% on a trade paperback deal. 50% only sounds better.

Also, ebooks with the quality of a traditionally published paperback cannot possibly loss less than half the paper back cost. And I’m talking about half the retail. Adding in discounts that come from the retailer in the paperback business, the ebook cost could easily get very close to the true price the customer pays for a paperback. I can imagine a difference of $1,00-$1,50 for printing and distribution costs.

So, nothing changed. Authors do the same job and get the same money for it. The same applies to publishers. It’s just that a lot of people in printing and order handling will be unemployed now, bookstores will close and amazon will control the entire book business through its aggressive monopoly.

Alan, which publishing house do you work for? Are you on the chopping block, or have you already been fired?

Glad Tom and I were able to help Heather! I’d also look into self-publishing the print version.