Remainders: What do authors get?
My friend Mark Leslie Lefebvre sent me an interesting question today:
I also had a question about remainders (since I know that some of your older titles or books that have gone into paperback have gone into remainder status -- after an incredibly great run as a traditional trade book, of course). Remainders/Bargain Books are a win-win situation for consumers and for bookstores (lower retail, higher margins) but what about the author?A good question! Tor's boilerplate remainder clause says this:
When Tor remainders your old stuff, is there any sort of compensation given to the author (ie, some sort of token royalty payment for that liquidated stock?) I've only seen this from a customer's and a bookseller's perspective, so was curious as to the author's side of things.
Remainder Sales. On copies of any edition of the Work sold in a remainder sale or a special stock reduction sale, a royalty of ten percent of the excess, if any, of the net amount received by the Publisher over the average cost of copies of that edition.Now, let's try to parse that out. Most Tor hardcovers have a cover price of US$24.95, and on copies sold in the US, authors get 10% of that on the first 5,000 copies (which is $2.50 a copy), 12.5% on the next 5,000 copies (which is $3.12 a copy), and 15% on anything over 10,000 copies (which is $3.75 a copy). The deal is similar with all other commercial SF publishers.
[On the other hand, it should be noted that very few SF novels sell over 5,000 copies in hardcover; for the majority of SF authors, the effective royalty on all copies sold in the US prior to remaindering is 10%.]
But what about those bargain-table remainders? Well, Tor sells the remainders of its US$25 hardcovers to whoever wants to buy them (and the author does get first dibs) at US$1.75 or so a copy. And what royalty does the author get?
Not 10% of cover. Not 10% even of that $1.75 (which would be 18 cents), but rather 10% of the amount by which $1.75 exceeds the average manufacturing cost of copies of the actual book ... which, in my experience it never does. I don't know what it costs Tor to print its hardcovers, but I do know from my experience editing RJS Books that we pay over $5.00 a copy.
Mark is right: Tor does remainder all my books (and all its other authors' books) eventually; the average sell-through for a hardcover (the percentage of the copies printed that actually sell during its initial release) is only about 50%; there are always remainders -- even of superstar authors like Stephen King and Michael Crichton. Tor even oh-so-helpfully remaindered Hominids the very month it won the Hugo.
And he's right that bookstores love selling remainders, because although they've bought them up at $1.75 a copy or so (albeit on a non-returnable basis), they can sell 'em at whatever they like, and you'll often see them sold for more than three times that much. A $5.99 remainder is $4.24 of profit for the bookstore (compared to the $2.65 the bookstore would pocket on a mass-market paperback priced at $5.99, assuming the store got a fairly a typical 44% discount from the publisher).
So, yes, remainders are good for bookstores, and they allow publishers to recover some of their costs, but, in fact, in most cases, the author doesn't make a penny off them.
Just so you know.
The Robert J. Sawyer Web Site
Posted by Rob on Wednesday, January 09, 2008
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9 Comments:
I am shocked at how little the author benefits from his/her work. I recently read at Analog's website that they pay in the order of $300 to $500 for a typical short story and now I read that the average SF author might only see about $10k from a hardback release of a novel.
It makes me wonder what percentage of SF authors can rely solely on the sale of their work to make a decent living.
Also, I get most of my books from the public library. Does the libary support the author in any meaningful way?
Hi, Sean. Making a living as a writer of any kind is hard; making a living as a fiction writer is particularly hard.
Now, as it happens, I make a good living, and am the only income earner in my household. But I do that by a combination of being widely published worldwide (15 different languages), being fortunate enough to have an abnormally high number of film and TV options/deals, and having a lucrative sideline as a keynote speaker. Those of us who do make a decent living in the SF field almost always have these multiple revenue streams.
Mike Resnick once did a back-of-the-envelope calculation to determine what percentage of the 1,500 members of the Science Fiction and Fantasy Writers of America made at least US$100,000 a year; he thought it was 100 members -- about 7%.
(And a hundred grand ain't that much, believe me, when you have to pay for your own office space, your own computing equipment, etc., etc., plus get no vacation pay and have no one contributing to your retirement plan, and, in the US, have to pay your own health-insurance premiums, etc.)
Several years ago, I was lucky enough to visit a bunch of American SF authors in their homes for a series of interviews I was doing for CBC Radio. I was, frankly, appalled at the squalor many very-well-admired names in the field live in.
On public libraries compensating authors, it depends where you live. If it's in the United States, the author gets his or her normal $2.50 royalty when the library buys the hardcover -- and if 20 people read that hardcover over its life, the author gets 12.5 cents per reader.
If you live just about anywhere else in the Western world, there will be a Public Lending Right system, by which the government will compensate authors for the lost royalties on copies of their books circulated in their own country's libraries (on the assumption that it's wrong to use the author's tax dollars to fund a system that deprives the author of income).
In Canada, the maximum kickback to authors from libraries is about $2,800 per year -- not to be sneezed at, of course, but not huge [and down from $4,300 15 years ago], and only a very small percentage of Canadian SF authors would get the maximum (although I'm lucky enough to be one who does); you need a lot of books, and you need them to be stocked in just about every library, to get that amount.
Hey Rob - thanks for answering my remainder question. I was just about to discuss remainders on my own blog and realized that after all these years as a book seller, I had no idea the actual details related to remainders from the author's POV.
Over the years I'd always assumed the author might see a penny for every remaindered copy or some other insignificant token of "royalty" for the liquidated stock -- I didn't realize for the most part all the author really gets is a chance to buy their own book for a really cheap price.
Yes, and remember the remainders the author gets the chance to buy are returned store stock, and often they're in pretty crappy condition -- torn dustjackets, scuffing, etc.
Great Post.
I've never seen a remainder book before (not that I know of). How can a customer tell if the book is a remainder? Is there a code on the book somewhere?
Jim
All those discounted hardcovers at the front of Chapters, Indigo, Barnes and Noble, and Borders -- and just about every other bookstore -- are remainders. When you see a new hardcover with a special $3.99, $4.99, $5.99, etc. price stickered on it, that's a remainder.
Many places do mark remainders with a black magic marker dot on the bottom or top of the book (on the pages as seen when the book is closed), but not all do.
Here's a link to some remainders at Chapters.ca, for instance.
Without getting to personal in mentioning author revenues besides the library (is this from every library across the country or just Library in general? I think it's in general)
Also, what about book clubs? Does the author receive any royalties from book clubs? Are these only Tor approved book clubs or do the book clubs sign a contract with the author?
$10K isn't a lot of money but what about when a book goes into paper back?
I meant to ask you these questions before at Audrey's but there were others there beside me.
Thanks
Jim
And finaley, what books are Remaninders/ Hardcover? Mass Market paperback's or what?
Mass-market paperbacks are destroyed if they don't sell, Jim (covers are ripped off and returned to publisher for credit). Only hard covers or trade paperbacks (large-size paperbacks) are remaindered.
Authors normally give the principal publisher (Tor, in my case) the right to make deals with book clubs. In the SF field, the major player is the Science Fiction Book Club, and whatever money the SFBC pays (an advance of thousands per book, plus royalties) is split 50:50 between author and the original publisher).
Established authors normally get 8% of cover price on the first 100,000 mass-market paperbacks, and 10% thereafter -- but in the SF field these days, most paperbacks sell only 20,000 copies or so (down from 100,000 in the 1970s):
$6.99 cover price * 8% * 20,000 copies is $11,184 -- of which your agent takes 15% off the top.
So, most established authors in the SF field, even if they're published in both hardcover and paperback make a total of something like $20,000 per book for North American sales. I'm lucky enough to do a lot better than that these days on my North American rights, plus sell a lot of foreign rights, plus film/TV options, etc., but for most SF writers, this is NOT a big-bucks business -- even if the author is really, really good.
My casual impression as a reader is that the SF field is down both in excitement of books and commercially (in mags, in books) from what I remember in late 70s, early 80s. Is that you impression? And whenever I say this, I get disagreements from SF fans. But they give me the impression that they are arguing more for how they WANT things to be, than based on assessment. Agreed?
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