< back to full list of articles
Big Houses, Good Deals?

or Article Tags

What is it about big publishing houses? Independent publishers either hate them or envy them; excoriate them or extol them. They are the bane of the industry and a key to the industry.

There are solid reasons for these strong feelings about larger publishers. Yet independent publishers may sometimes find it useful and profitable to sell books to them or to have them distribute titles. Why? Because larger publishers can provide services that benefit independent publishers if they can tap into the larger publishers’ universe.

 

Larger publishers can provide:

• Significant market penetration and market share

• Extensive sales forces

• Marketing money

• Special sales and subsidiary rights sales forces and knowledge

• Better pricing on production

•  Cash flow to deal with the books and vendors–and to pay you

•  Shipping and fulfillment departments that can take the headache off your hands

• Accounts receivable clerks who can do that essential work and who have more clout than you do to collect overdue money

• Established accounts and access to accounts you may not have.

But watch out! Just because a larger publisher wants to buy or to distribute your book doesn’t mean that publisher will do any better with it than you can. In fact, many independent publishers and authors who have worked with larger publishers would say that independents actually can do the job better because of the single-minded attention they give to the individual book.

Nevertheless, sometimes it may make sense to work with these publishers or at least to consider the option. If you do want to make a deal with a larger publisher for either the sale or the distribution of your book, what should you look for? What should you watch out for? Here are some key items.

I. Be proactive

1. Look for a publisher that’s strong in the markets to which your book is targeted.

Do your homework first before you approach the publisher. It doesn’t make sense to give your book to a publisher that doesn’t have expertise in the areas the book is aiming for. You want your book, your author, and the publisher to succeed. That can happen only if the publisher has knowledge of, and access to, the proper markets for your book.

2. Meet the decision-makers.

In order to be comfortable with your decision, you need to meet the decision-makers at the larger house. Understand that personnel there can change quickly–it’s the nature of the business. But meeting people early will at least give you a starting point. You should be comfortable with them. Having just sold a variety of titles to Scholastic, Don Tubesing, President of Pfeifer-Hamilton Publishers, says, “You need to know they share your style and value systems. You need to know that they’ll do for the books what you’d do for the books–and more.”

3. Be convinced the large house can do what you want them to do.

This doesn’t mean they have to do it as you would. Expect different kinds of clout and business methods. Understand that the larger houses have trade experience and contacts on their side. Although they won’t be able to devote their total time to your book, that’s OK. If you feel you can do some things better–pursuing special-interest markets, for example–try to reserve those rights in your contract with the larger house. Sometimes you can both work on the project.

4. Run your numbers.

No deal is a good deal if the numbers aren’t in line with your expectations. Run those numbers and determine how much you’ll make on this deal. Is it what you wanted? If so, fine; if not, continue to negotiate or walk away.

5. Have a clear understanding of what is to be accomplished.

Make sure that both you and the large house have a complete, detailed understanding in writing. This should be in contract form and signed by both parties. It should specify exactly what is to be done, by whom, within what time frame.

6. Specify a contact person.

It’s easy to get lost within a large company. Specify someone who will work with you to answer any questions you may have and to provide liaison between you and the larger house. Having one person to deal with helps reduce the frustration of trying to find the right person for each question you may have.

7. Try to get defined marketing and publicity plans and budgets.

While most houses won’t give you specific marketing and publicity plans, it does you no good to simply hand over your book to a house and hope they’ll do any better with it than you would. Negotiate as best you can for at least minimally defined plans and budgets. If the house won’t give them to you, think twice about handing over your project.

8. Get as high an advance as you can.

It’s true that many books never earn back their advances at large publishing houses. Thus, if you choose to sell your book to a larger publisher for an advance and royalty, you want as much money up front as possible.

9. Get as high a royalty as you can.

All things are negotiable. For the most part, larger publishers pay royalty on the suggested retail price of the book. If this is the case in your deal, go for as high a royalty as you can get, using escalators to increase the amount. For a hardcover book, you can generally start with 10% to 5,000 copies; 12.5% to 10,000 copies; 15% thereafter. For trade paper rights, the royalty rate is usually about 7.5% -8% of retail. Of course, since everything is negotiable, you may get more or less than such favorable royalties, but it’s up to you to negotiate in your own best interests.

10. Negotiate as high a purchase price as you can.

There are times when independent publishers have products that larger publishers want to buy out for a purchase price rather than an advance and/or a royalty. Never say never. If the deal is one that makes sense, at a price high enough to make it attractive, and you’ve considered the caveats mentioned above, then snap it up. Remember to withhold all rights not directly related to the project, or to include them for an extra fee.

II. Be defensive

 

Sometimes things don’t work out exactly as you plan. In order to protect your book, your author, and your company, you should take a defensive position as well as a proactive position with larger publishers.

1. Specify a time frame for performance.

In case the larger house doesn’t meet specified obligations or perform up to agreed-upon standards by a certain period of time, have a cancellation or termination clause in your agreement that allows you to take the project back. (See also #5 above.)

2. Have an out-of-print clause tied to sales levels.

Because of the Print-on-Demand capabilities of large publishers, books may never be out-of-print in terms of the usual contract clause that stipulates “in print” as having inventory for sale. This is fine if the large publisher continues to sell a significant number of books. It isn’t fine if the book languishes and is only passively sold as special-order sales are taken. Inserting an out-of-print definition tied to sales levels–and to a small inventory position as well–should make it possible for you to regain rights to your book if it dies in the larger publisher’s care.

3. Include a strong termination clause that goes into effect if payments are not received on time.

No excuses. The large house has a lot more cash than you do. If they don’t pay, they should be out of the picture.

4. Include an arbitration clause.

Publishers of any size don’t like to deal with legal issues. It takes up precious time and money, and it’s not good for their reputations. If the larger house doesn’t deliver what it promised, have an arbitrator figure out what to do.

As Don Tubesing of Pfeifer-Hamilton notes, dealing with your books is an emotional issue, with tugs all over the place. You’ve invested a lot of time, effort, and love in your projects. Independent publishers want to succeed; thus they can feel easily seduced when courted by the larger publisher. So temper your enthusiasm and hopes with caution and reason when you start dealing with big publishing businesses. Don’t be seduced by illusion–base your ultimate decision on reality. Run your numbers. If they don’t make sense, then walk away from the deal or continue to negotiate until the deal does makes sense to you. If the numbers are right, and all other things are in order, then go ahead.

One more thing: Don’t look back

 

If you choose to sell your books outright, be happy with your decision. Move ahead. You’ve made your deal. If you watch what happens, you may be happy or you may be completely annoyed by the way the larger publisher publishes your books. Once you’ve sold the books, though, you can’t do much, if anything, about it. So move forward. Create new books and new programs. Don’t eat yourself up about what they could have or should have done. Channel your energies into doing more good things for your own program. Continue to expand that program into new, profitable books and products–ones that you may or may not want to sell to another larger publisher.

Tom Woll, President of Cross River Publishing Consultants in Katonah, New York, has more than 25 years of senior-level publishing management experience at firms both large and small. These companies include John Wiley & Sons, where he was VP & General Manager of the Professional & Trade Division, and Rodale Press, Storey Communications, and Beaufort Books, where he served as Publisher at all. Woll chaired AAP’s Smaller Publishers’ Group, and is on the Advisory Board of the Small Press Center. He is an Adjunct Professor of Publishing at NYU’s School of Continuing and Professional Studies.

Connect With Us

1020 Manhattan Beach Blvd., Suite 204 Manhattan Beach, CA 90266
P: 310-546-1818 F: 310-546-3939 E: info@IBPA-online.org
©2016 Independent Book Publishers Association

Visit Us On FacebookVisit Us On TwitterVisit Us On LinkedinCheck Our Feed