Saturday, April 18, 2009

Royalty Statement Anatomy

I'm off to bed in a bit, but I thought it would be extremely prudent of me to draw your attention to the fabulous Lynne Viehl's royalty statement.

Here is my disclaimer: I have never read anything by Ms. Viehl. I'm sure her books are lovely; I just haven't gotten around to them. But I think she's simply smashing and fabulous because she posted her royalty statement online. I'm not saying that all authors should do this; certainly, you are and should be entitled to your privacy about your income and how many books are sold.

But for the many, many aspiring authors out there, Ms. Viehl has done them a great service by putting this up.

I will now dissect it for you, briefly, since Ms. Viehl did a good job of doing so already on her blog. Follow along in the jpeg. =)

US Regular Sales is 74,893 copies. This number denotes the number of books SHIPPED to booksellers in the United States during the royalty period.

US Regular Sales--Discount 61% is 11 copies. This number is the number of books that were sold by the publisher at a discount. I don't know what the discount is for, but you can see that Ms. Viehl receives less royalties on them. US Regular Sales have an 8% royalty rate, while US Regular Sales--Discount 61% has a 6% royalty rate. This is standard publishing contract stuff. The discounted copies could have been bought by Ms. Viehl, or been remainders, or been bought through a publisher-discount program.

US Regular Returns is 16,305 copies. This number denotes the number of books that the US booksellers RETURNED to Penguin. Doing rough math, this means that the booksellers returned, for money back from Penguin, a total of 21.77% of the books they ordered. They either overestimated, or the more likely case, is that since the books are mass-market, they simply cleared them off the shelves after a pre-determined period of time (usually three months).

For every book returned, as you can see on the royalty statement, the publisher did not pay Ms. Viehl any money. This makes sense from an accounting standpoint, since the publisher had to pay the booksellers back the money they had purchased the book with, and therefore didn't really "sell" it.

The Export Sales and Returns work in a similar manner to the US Sales and Returns. They should be explanatory to you, using the information in the above paragraphs. Note the different royalty rates for international sales. Also, a standard part of publishing contracts.

Now, we get to the really fun part of the royalty statement, which is Reserve Against Returns. The publisher is not currently paying Ms. Viehl for 21,140 copies of the title. This means they are holding back money earned from 28.23% of the total copies they shipped to booksellers. The reasons for this are many, but the primary one is this: publishers are pessimistic, and they expect those books to eventually be returned by booksellers. They therefore hold money against them (the reserve), and will adjust future royalty statements to reflect any returns made from that pool of books. In the best case scenario, the booksellers won't return any copies, and Ms. Viehl will eventually get that $13,512.69. In the worst case scenario, the booksellers will return all those copies, and Ms. Viehl won't see that particular portion of the money.

Finally, you see the BOOKSPAN subsidiary right sale, which reflects the $1500 that Ms. Viehl and the publisher were paid for sublicensing the novel to a book club. The split for the money is 50% to the publisher and 50% to Ms. Viehl; this is also dictated in her contract.

And that's about it, folks. Ms. Viehl explains how much money she earned in the original blog post.

That was fun, wasn't it? =)


Deborah Rey said...

Oy vay!
And, Yes, that was fun.
Off to read the actual statement and have some more fun.
Have a good weekend with lots of sunshine,

Deborah Rey

Marianne Arkins said...

Good for her for sharing. I really appreciate her honesty (and I think she's awesome, too).

Her books aren't bad, either, *G*

Lisa Iriarte said...

I've read all of S.L. Viehl's Star Doc series and loved it. And I frequently read her blog as well.

Your post sparked a question. If a new book is put on shelves prior to the release date (this just happened to a friend of mine), and I mean really early, like almost a month ahead, does this count against the author's "three month window" to be on those shelves?

While it's great to see the book out early, I can see where this could really hurt an author. People follow posted release dates. I know I do. And I don't go looking for a book much more than a couple of days before it's supposed to be out. I wouldn't know to buy it before then. And if it disappears from the shelves early as well, that could hurt an author's sales.

Karen Amanda Hooper said...

Very educational. Kudos to her for sharing, and to you for breaking it down for us. :)

Jenny Rae Rappaport said...

Lisa Iriarte, I don't actually know the answer to your question. Any booksellers out there who know if the early putting out on shelves counts against the time the book is on the shelves?

Lisa Iriarte said...

And another question (sorry). If your book hits the shelves early, does your critical "first week" also start early? If so, and people don't know it's there, that could hurt, too. If not, then you have a lot more weeks in your first week to make those important sales, and that would be a benefit to being shelved early.

Endless Secrets said...

Im off to read the statament after this question. I have been considering sending you a query for my novel for a short time, but I read on the Website that you only accept e-queries, but then I read a post on Lit Soup that said you accept both but respond faster to Snail Mail.
What would you rather?

Janeal C. Falor said...

Great information. Thanks for sharing!

Jeanne Tomlin said...

Very informative! Thanks.

Helen said...

In regards to Lisa Iriarte's returns question: I work in an Irish bookstore, so my experiences may be different to booksellers in the US, but the three month period is a ball park area mainly to get rid of excess. We start counting from when the book is actually physically on the shelf (noted on our system), not from release date.

The most important figure is how many sales the book has managed in that three month period, which is what we work out the amount of returns from. If the book has been steadily selling and the figures add up, everything's fine. But things get dodgy if sales haven't been happening as we were hoping they would be when we subbed in the book many months previous.

Other factors contribute, such as the time of year it was published, what new titles are out when the older title has reached its three month sale mark, and how tight we are for space. If there is a lag in new titles, or we have a bit of extra space, we do try to keep the title in a prominent position in the hopes of potential sales. Ideally, bookstores don't like returning vast quantities of books either because it takes up time and money on our part too.

ryan field said...

Very interesting post.

Margaret said...

Thanks for this. It's an interesting addition to the original post.

I have read Lynn Viehl under several pseudonyms (cross genres) and she's a great read. My husband and I take turns buying her books.

I do have a question...

The subsidiary rights are in addition to any sales, correct?

Amie Stuart said...

>>If your book hits the shelves early, does your critical "first week" also start early?

Not sure it actually *starts* early. And take my comment for what it's worth but if a book goes on sale before it's supposed to and especially if it's put out at different times all over the country prior to it's on sale date, you risk not having the velocity necessary to make the lists.

I have a very good friend whose books always sell well but she never makes the list because her publisher won't pay for strict laydown dates.

Hope that helped!

Jenny Rae Rappaport said...

Margaret, the subsidiary rights are in addition to any sales. In addition to the licensing fee, Ms. Viehl will get paid for any book club copies (yet another royalty rate!) she sells that earn more than $1500.

Margaret said...

Thanks. That's what I figured, but...

lynnrush said...

Wow. Thanks for sharing!

Tochi said...

Thanks for the breakdown, Jenny. Much appreciated.

Authoress said...

Thanks for this, Jenny! Well done. I'm sure it was MUCH more fun to read than it was to do all that disturbingly math-like writing. =D

Lisa Logan said...

Great and informative post. I appreciate the simple and straightforward breakdown!!