I'm too impatient to give this poll a whole day, so I'm about to mess it up by (I hope) influencing voters. Buckle up.
I want to talk about discounting. It’s still royalties season, so it’s on my mind even more than usual.
You know how retail discounts work, right? In bookselling, the retailer buys books from the publisher at a retail discount of X% off the suggested retail price (in the UK, the 'RRP') of the book.
If a US trade paperback retails for $10.99, and the retailer buys the book from the publisher at a 50% discount, that means the retailer buys the book for $5.495 and keeps whatever proceeds they make from the sale. (I’m oversimplifying a little, but only a little.)
(And remember that bookselling generally works on a consignment basis: retailers can return unsold stock to the publisher and get their money back. My dad, who doesn't work in publishing, literally refuses to believe me when I tell him about this.)
A book contract specifies the royalties the publisher will pay the author for the sale of each book. But it’s not as straightforward as 'You’ll earn 10% of the retail price for each copy you sell.' The royalties section in a contract can go on for a page and a half. Or more.
The language that refers to books sold in the publisher’s ‘home market’ (essentially, the country where the publisher is located) will look something like this. (This is sample language not from any specific contract; the math is based on our theoretical $10.99 US trade PB.) 
The royalty rate (the 7%) and the discount thresholds (52%, 55%) here are just samples and can vary from publisher to publisher, contract to contract.
Or the language might look something like this:
‘Net receipts’ = the amount the publisher received from the retailer who bought the books, minus the cost of the sale. The cost of the sale varies and I can’t even guess what it might be.
But the takeaway here is that if the retailer bought our $10.99 paperback at a retail discount of 65%, and the publisher got $4.40 for it, the author is now getting LESS THAN 38.4¢ per book.
Why would a publisher sell books at a high discount? Well, it’s a good way to sell more copies, obviously. Sometimes that high discount is a reward for the retailer giving up the right to return unsold stock for a refund.
If the retailer is powerful (i.e. they move a lot of books) and they demand a very high retail discount, the publisher can find it difficult to refuse.
In the UK, the @Soc_of_Authors (led by @PhilipPullman) have launched a campaign against the very high discounts that publishers give supermarkets and bookclubs.
theguardian.com/books/2017/aug…
theguardian.com/books/2017/aug…
But chain bookstores and Amazon also negotiate high discounts from publishers. If a big bookselling chain takes a few thousand copies of a book, you can bet they're not doing it at a 50% retail discount.
I’m looking at a royalty statement right now. The book got great buzz and bookstore placement and through there were no supermarket or bookclub sales, it's sold a really nice number of copies.
And of the copies sold in the regular retail market (i.e. bookstores and wholesalers), 92.4% of those copies were sold at a high discount.
92.4% of sales to bookshops were made at a high discount for which my client got 10% of the publisher’s net receipts. NINETY-TWO POINT FOUR PERCENT. Hold on, I need to go lie down for a minute.
Here, look: @nicolakidsbooks shows you how nuts this can get. This works out to her earning 6p per book!
The thing is, high discounts don’t just hurt authors’ income. The publisher is paying the author less because the publisher is MAKING less. It’s getting harder and harder for publishers to make money, too.
So what do we do? Well, agents can try to make sure the high-discount thresholds are as high as possible. And they can try to negotiate author approval for bulk sales that would result in very low proceeds, so the author can opt out if they want.
(@mrjamesmayhew recently made the trade news for refusing to let his publisher sell 100,000 of his books to a discount retailer—he would have earned just 3p per book from the sale.)
And on a personal level, you can adjust your buying habits. I don’t buy books from Amazon or supermarkets. 95% of my book purchases come from the two independent bookshops I’m lucky to have locally. *polishes halo*
Look, if you don’t intend to earn your living from writing books, I get that you might care more about how many people read your work than how much you earn.
But writing books is WORK. It’s labor for which the author deserves fair compensation. Books are of immense value to our society. Publishers are doing important work by getting them out there. This needs to be a sustainable business for authors, for publishers, for booksellers.
There’s a whole other conversation to be had about fixed book price agreements but I still haven’t had any breakfast, so you can talk about that amongst yourselves while I go make some toast.
I saw @PhilipPullman give the @wearealsc Arbuthnot lecture in the early 2000s and even then he said that authors were responsible for writing as well AND for as much money as they can. This is not a new issue, but it's getting more critical by the year.
Oh, you guys, I just did some seriously depressing math. I looked at statements for 3 books that have been published by both US and UK publishers. All 'successful' in both markets.
The average royalty the authors got from the US publishers was $1.82/book.
The average royalty the authors got from the UK publishers was 30p/book.
At today's exchange rate, 30p = $0.42.
The average royalty the authors got from the UK publishers was 30p/book.
At today's exchange rate, 30p = $0.42.
Obviously this is a TINY sample but the average royalties each of these authors earned were very very close to the others'.
And the US publishers' royalties were mostly for hardcovers, while the UK publishers' were for paperbacks. US publishers release children's & YA fiction in HC, while UK publishers usually release it in PB because it's thought that it's hard to get consumers to buy HCs.
But you can see how much harder it is for you and your publisher to make money if you're writing children's/YA fiction that sells primarily in the UK, as opposed to the US.
Okay, I've got to get off the computer before I ruin this beautiful day with more math.
