Monday, April 12, 2010

A Piece of the Proverbial Pie

One of the interesting aspects of working in publishing sales is that, unlike sales professionals in almost every other industry, we don't work on commission. Whether we sell ten thousand or a hundred thousand or five million copies of a book to an account, we make the same salary at the end of the pay period (although arguably if you were to consistently sell five million copies of your titles to your account, you might qualify for a pay raise or a bonus or something, because holy hell, that is crazy).

I was intrigued, then, when I read this Galley Cat article in which Ann Patty (formerly of Poseidon, Crown, and Harcourt fame) argues that book editors, as well as agents and authors, should get a cut of a book's overall sales (she suggests 1 to 3%, with the caveat that they not kick in until after the advance is earned out).

One of the many advantages to the commission model is that it rewards higher achievement and harder work while simultaneously solving the principle-agent problem—that is, getting employees to do what's in the company's best interest (i.e., sell more books) by aligning them with employee's best interests (i.e., make more money). Arguably, agents work hard for the books they acquire not only because they love their work, but because the better the deals they can make for their authors, the higher their remuneration. Likewise, editors and sales people at publishing houses would likely work harder and go the extra mile more often if their paychecks were directly tied to the books they were selling.

What do you think, mes auteurs? Would you want your editor to work on commission for you and your book?

24 comments:

  1. I can see a flip side to that too. The editor getting a commission on each book may work faster (i.e. not as carefully) in order to pump out more books from his/her desk. Editing can certainly help some projects, but can you look at a piece like the oft criticized Twilight and say that it was well edited?

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  2. At first blush, the commission idea does not seem appealing to me. I think that - given how much of publishing is guesswork - having concrete terms and fewer surprises is better.

    Cheers, Jill
    www.jilledmondson.blogspot.com

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  3. Hmmmmm, interesting. If it would mean that they'd work harder for you ... why not?? I think -- just like the standard 15% for agents -- it would end up paying for itself in the end, wouldn't it?

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  4. I'm only new to the sales and marketing end of things in publishing but my boss did mention the possibility of getting commission for high sales figures. As of yet the opportunity has not presented itself but I have to tell you it certainly has me gearing up the marketing juices.

    So, from that perspective I think it could possibly work. However, what happens to all those niche market books? Surely they would lose out in a commission based model?

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  5. Personally I'd be afraid of an editor signing on to edit my book for more money rather than because they have the time to give their careful attention into perfecting the project. That said, everyone could always use more money these days.

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  6. The upshot?

    * Editors battling agents for smaller advances to artificially spike profit margins.

    * In-house battles for marketing/advertising resources because authors really can't do it all.

    * A widening gap between bestsellers and the rest of the pack.

    * Publisher entreaties to do more with less without sacrificing commitment or quality.

    Sounds like publishing might finally be catching up with the rest of the corporate world. In all honesty, it seems something's got to change. The current model could likely survive either the technology revolution or the economic crisis. But both? Sitting on the laurels of tradition may not be enough in the coming years...

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  7. I'm thinking a bonus model would be more conducive to extra money for editors and good books. To be honest, what an editor does is not sales. I think that's the misapprehension at work here. An editor edits, the sales staff deals with the accounts.

    The other issue I had was this comment:
    "When a book editor's work is extensive (re-structuring, re-plotting, re-writing) and substantially contributes to the final book,..."

    Why are they buying this book if it needs that much work?

    Editors already have a salary. If they want to play the royalty or commissions game, then that salary would need to go.

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  8. An editor edits

    An editor acquires. They are the first to see and champion the potential in a ms. They are, indeed, a major part of the sales cycle serving, in effect, to qualify that sale.

    I work for a large IT services company. While our salespeople make good commissions, the people who support our sales get a cut, too. This includes technical people and even the people who write and edit winning proposals -- who never have direct contact with the account. These people get bonused on top of making decent salaries. That's an effective way to attract -- and retain -- top talent. Otherwise you wind up with a lot of mediocre people doing a mediocre job when it doesn't matter whether you put forth a "good enough" effort or a stellar performance.

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  9. This hinges heavily on the predicate that editor work quality correlates to a significant extent with book popularity, and thus, sales.

    That might be a bit of a dangerous assumption!

    Should it turn out incorrect, then the winning strategy for an editor, as CoachMT points out above, will be the scattershot approach of rushing out as many edits as possible to increase the odds that one strikes gold. Clearly not the intended result!

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  10. How would that work for the author? Considering the push (and I do mean PUSH) toward the e-book versions at lower sales prices to begin with, it just seems that the author will end up with next to nothing. On the other hand, if it truly meant that others (publishers, editors, etc.) took on the job of the marketing/selling, and allowed the writers to actually write, maybe we'd all do better.

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  11. Honestly, I thought agents worked by commission! So I wouldn't mind at all, and I think an agent would deserve it. I think it would make them work harder at getting the best out of a manuscript with tougher edits and more focus on getting a lot of sales on each ms. Then, the risk is that they will form the ms after what they expect will sell - and that isn't something easily forecasted!

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  12. Hi Malin,

    Agents do work on commission, but editors don't.


    E

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  13. A number of the small indie presses, particularly the epublishers, already have this arrangement. A few go so far as to give the cover artist and a few others in the process a cut.

    With a very small salary, if any, and no advances, literally everyone has a stake in the success of each book, and the cash-poor publisher is able to create product.

    This appears to be successful since those publishers who do this have been around for years.

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  14. I think every employee in every industry should be on some form of performance-related pay structure. If my hard work results in the company making more money, then I should share in the rewards. Likewise, if my company is not performing as well, my pay should reflect that.

    Coincidentally, I am in the process of buying a distribution (not related to publishing) company. The salesmen are on salary. If they do a great job, they get the same paycheck. If they do a lousy job, they get the same paycheck. I am very likely going to change their pay structure to 100% comission. In the end, I hope they'll be making more money than they are now. But they'll have to get up, get out, and get busy to make that happen. The point is, the potential is there to make more money. If a person's paycheck never changes, they don't have a whole lot of motivation to do more than what is required. You know why Wall Street brokers are so hyper and work from dawn to midnight? Because the more they work and the better job they do, the more they get paid.

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  15. Having started in book production, hearing an editor talk about how they want more remuneration just touches a raw nerve. How many hours did I spend turning the shit you delivered into a publishable book? You get paid more, you get a yearly bonus, and you get a "sales meeting" in some exotic locale that suspiciously includes a lot of alcohol.

    Remember the people that actually make the book. They hide from the rest of the world the thing you turned over and called a book.

    [/soapbox]

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  16. On a calmer note, my wife works in educational sales and they are on a commission structure. Her salary is about half what I make, but if she exceeds quota and the department exceeds quota it's possible for her to make more in her bonus than I do in an entire year.

    It can be stressful (especially last year with the economy in her toilet and a much lower bonus payout), but bonus month is a really good month in our house. :)

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  17. Where's the money going to come from?

    I'm assuming the pie won't get bigger (ie price rises for books, readers suffer).

    I'm assuming the booksellers won't cut their income (just can't see it happening).

    Two scenarios. 1, it comes out of the publisher's profit (I doubt it).

    2, the author gets less money. He gets his %, pays his agent, his editor, the guy that waters the plants, whoever, and goes home with the pittance that's left.

    That might be okay if you're Michael Crichton or Stephen King, but as always the midlist authors will suffer.

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  18. It's a nice dream, but in an industry that still takes pot-luck on what will be a success and what won't, a commission structure isn't going to help.

    Individual bonuses like commissions have also been shown to hamper teamwork and encourage competition rather than cooperation; I'd rather not think that other editors in Big McPublisher are trying to scuttle my book in favour of their own.

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  19. I'm not sure if I like this idea. Commissions for agents make sense to me: they'll work all the harder to sell a book because they don't get that 15% otherwise. But editors are the ones who buy the books. What would stop them from buying everything and giving each book sub-par editing because they acquire too much to handle?

    The publishing houses' acquisitions budgets likely won't change that much, so each author (and agent, in return) would probably get a smaller advance. If the market is flooded by all these extra editor purchases, it makes it harder for any one book to stand out, meaning royalties probably won't be as high. I'm assuming publicity departments will also have to split the same amount of money they have now among more books, so the ones that don't get a lot of help will sink. And if those books sink, the authors will have a harder time selling additional books, etc.

    Someone tell me if my economics are off, but I don't see how this will help anybody besides the big-name authors. It seems like it will definitely hurt every other writer.

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  20. Yes, just confirming what @Marilynn said. This model is already in place for many e-publishers. For the record, I still make the same 35/40% royalty from those publishers. (That's net, but it works out to that percentage on the full price from the publisher's site and half that from places like Fictionwise, where a 50% discount on listing applies.)

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  21. I agree. If someone helped me get published, the least that can happen is actually have them get a commission out of the sales. I mean it takes more than one person to make a book.

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  22. I put an ad in Craigslist a minute ago for editing my next book, Kicking Life's Ass! - in which I offered commission, or straight pay.

    I'm thinking about this idea... offer commission to the editor, but, if the commission doesn't add up to amount x by date ______, then I must pay the balance of x - commissions already paid.

    That way it's a win-win. IF the book takes off and really sells - the editor wins because the commission rate can stay in effect for as long as we agreed it would - a year?

    If not - the editor gets some cheese anyway and I get out of the commission contract upon paying whatever balance we agreed to at the start.

    Any editors out there willing to work this way? That's the question!

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