Monday, April 21, 2008

No Returns: No Advances and Author Minimum Wage

HarperCollins recently announced a new publishing imprint that will stop paying for returns.

Reserves against returns is one of the dirty little secrets of the publishing industry. It's a practice that was established after the Depression to entice book stores (once mom and pop stores, now chains) to order more books in the hopes that something would fly out of their stores. The way it is set up is that the stores can order as many copies as they want and then return what they don't sell for credit. No other industry I know of does this, so it's actually an out-dated practice.

The way this actually works is that in order to make sure the publisher doesn't overpay the author on books that might be returned (God forbid!!), 25 to 33% of an authors' book sales are not paid to the author until 2 years after the book is published just in case the books are returned.

So what this means is that in order to fund the publishing industry, authors lend a quarter of their book sales income to the industry until so much time has gone buy that there is no excuse not to pay them.

The reserve against returns policy, and returns in general, is something authors (and agents who make their living from a percentage of author's sales) should be over-joyed to see disappear from the industry.

But the model that HarperColliins has put forth is just moving the burden of author funding from the back end to the front end.

Let me explain.

They want to do away with author advances, which means that authors should write a completed manuscript and then wait up to a year and a half after signing a contract to see any money (because it takes at least 9 months to go from manuscript to published book, and sometimes, another 9 months to do an edit/rewrite before that).

This too is wrong.

I believe that even the never-before-published author should receive at least minimum wage for a completed novel. As a former journalist who can write to fit and under deadline, if I were to write 300 pages nights and some weekends, it would take me at least 300 hours (probably over a year). At minimum wage ($6.55), that would be $1955. Add in another 10 hours for editing and round up $2500 (so you can pay a 15% commission to your hard-working agent), and the absolute minimum a publisher should pay an author in 2008 is $2500.

I also believe that authors with a track record should be compensated accordingly.

And, for what it's worth, as long as I am posting my publishing beliefs here, I believe that authors should be paid within 30 days of sales, not every six months, since we now live in a universe where publishers can track book sales down to the minute.


Anonymous said...

Where do remainders fit into the returns system? Based on the amount of real estate chain bookstores devote to bargain books I've got to believe they're making money off of them somehow, but I've never been clear on how that works.

Also, how might books published under the new HarperCollins imprint end up in the "Bargain Books" section at B&N?

Kristine Overbrook said...

Isn't this what e-book publishers like Mundania Press and Samhain do, pay no advance, only a persentage of sales?

NS Foster said...

As a random sideline thought:

There is at least one other industry with returns--the grocery industry. I worked in a deli for 3 years and my manager was allowed to return certain pre-packaged meats and cheeses. I imagine this practice arose at the same time the publishing world's did.

Now back to your regularly scheduled programming...

Anonymous said...

Lori Perkins said:
"And, for what it's worth, as long as I am posting my publishing beliefs here, I believe that authors should be paid within 30 days of sales, not every six months, since we now live in a universe where publishers can track book sales down to the minute."

A great notion and long overdue from someone in the business!!

But as always, things go only one way. We also live in a universe where Eddie Bauer knows what we bought for Christmas ten years ago, but can't seem to find a six-foot five Saudi who drags a dialysis machine behind him wherever he goes.

JimmyT said...


Interesting post. Great insight to a business that continues to change, and then change some more.

Agree with your thoughts.

Tyhitia Green said...

I agree totally, Lori. Wow, I hope all publishers don't adapt to no advances. I've been hearing that very same thing for a while now. Thanks for sharing. :*)

Brian said...

The more I read about what is going on with publishing now, the more I realize I will probably be better off paying someone to edit my book and publishing it myself.

Sure, I'll have the scorn of some writers who think I have sold out the business, even though other artist's who take control of their own work are lauded as "groundbreaking" and "independent."

All that will be better than busting my hump to hope I catch the eye of an agent who hasn't totally soured on fiction or thinks I'm not marketable because I'm not writing a genre or a series.

I'll be fine selling to family and friends, putting books in the shops or friends, and hoping to catch a few readers via my own marketing instead of playing the game and hoping I get paid somewhere down the line.

ryan field said...

I work for one that pays 90 days after release (the same flat fee plus two free copies they were paying twenty five years ago). And it's getting tighter and tighter these days.

Ravenous Romance said...

Quick comment on your commments - Remainders are books that are bought wholesale and sold at a profit. Royalties are not paid on them. If a publisher overprints by 1000, a store/chain buys the whole lot for $1000 and then charges $5 per book, even though the cover price is $16.95.

Most E book pubishers are not media conglomerates whose books are already sold in chains and on Amazon. They are pretty small businesses that can't get their books into stores.

Ada [The Duchess] said...

Wow. Thanks for shedding a light on these things Lori. Your blog is invaluable. I visit everyday.

Marie Javins said...

Excellent post. Lori, I wish you were in charge of the publishing universe!

Anonymous said...

If this policy becomes standard it will be a lot harder for midlist authors and new authors to find shelf space. Bookstores may take the risk of buying some single copies from unknowns, but the multiples are going to come from track-record, big name authors that are less risky.

Remember, books are the only retail product out there with the price stamped on them by the manufacturer. A bookstore can discount, but they really can't mark-up -- whether they are located in high-rent SanFrancisco or low-rent Boise. The margins on books are already slim, many bookstores only getting 40-42% discounts. That 40% has to pay the lights and the phone and the webdesigner and -- oh yeah -- those smart and helpful folks who work there. A bookstore that takes too many risks with inventory is soon going to find itself out of business. And that is a bad thing not only for authors and agents, but for any hope we have for a diverse and complicated exchange of ideas through literature.

Anonymous said...

I'm glad to know that you feel this way. My heart sank when I heard about this Harper imprint in the first place.

Anonymous said...

Thanks for your post.

This move sounds a bit like academic publishing.

I don't think I agree with the write-a-book-in-300-hours mentality: it sounds an awful lot like the kind of thinking that goes on in the Marketing, Publicity, and Sales departments at major houses. Books are not produce or shoes--they are something unique that should be thought of as--dare I say?--art. Advances should reflect more than the sheer time-labor that goes into them.

Adding up the minimum wage doesn't make sense simply because an author cannot keep selling books simultaneously, the way you might sell widgets. That said, I agree with the sentiment. We need major, competitive publishing houses that are non-profits and less chain-driven publishing. The chains are the real problem in my mind.

There is absolutely no reason publishing houses will exist as they do now in 30 years. Borders and B&N may well be the only real publishers in the business.

Roscoe James said...

Always love your posts. Thanks again. BTW - the mag (newsstand) still works with returns. Course, no commissions involved there.

And, the more you post, the more I wonder why the hell I want to be a writer.



sumner_wilson said...


Great thought, Lori. And bully for you.

Sumner Wilson

Anonymous said...

Hmm. Since HC/Eos just requested my full SF manuscript, I hope this practice doesn't seep into their existing imprints.

When you buy the rights to any intellectual property, you should pay something up front. This seems like a way to push the "minimum wage" risk/reward away from the publisher and back on to the author.


Alison Tyler said...

The worst part of the no-advance concept (which is not only happening with HarperCollins, but with many publishers) is that if the publisher decides to cancel a book, the author has done a slew of work for no money. The publisher is out nothing.

Even as a tiny little imprint, Pretty Things Press pays advances.