A Conversation: Barry Eisler, Joe Konrath, and Me

Paying For Self-Publishing Help

Thoughts on Sunk Costs and Commissions

with Barry Eisler, Joe Konrath, and Dean Wesley Smith

Joe:

Before Barry and I went live with our 13,000 word ebook dialog, we reached out to a few folks we respected and asked for their opinions.

One of those people was writer Dean Wesley Smith.  Dean is the bestselling author of over a hundred novels and more short stories than he cares to count. He’s been a publisher and even an editor for Pocket Books. You can find his many opinions about publishing at www.deanwesleysmith.com.

Dean strongly disagreed with one of the points we brought up in the dialog, namely that agents could morph into a model that I call estributors, and take on both agent and publishing duties for a writer in exchange for the same 15%. This would include editing, proofing, creating cover art, formatting, uploading, and ultimately paying authors the same way they’ve been doing–taking out their commission and passing the check along.

Dean:

I hated and I do mean HATED, the part where Joe thinks that agents will start being a form of packager or publisher (he calls them estributors) and taking a percentage.

Everyone who reads my blog knows how I feel about giving a percentage of any kind of your property for day labor. (Like giving the gardener a percentage of your house for trimming a hedge.) I feel that goes back into the area that Kris talked about, the “must be taken care of” aspect of writers’ belief systems.

By the way, there is one major agency already doing this and taking 50%.  If you do the math, it turns out the writers would be better served staying in traditional publishing than giving an agent 50%. And this agency is getting tons of stupid writers signing up who think they are jumping onto the indie published movement. They are just leaving one pan for a very stupid and hot fire.

How to avoid this: As Barry said he did with his short story. Pay a day job labor fee to have someone for a set price do the things you don’t want to learn how to do yourself, such as covers and launching and so on.

One time fee.

NEVER PAY ANYONE A PERCENTAGE OF YOUR PROPERTY. Sorry, Joe, I just believe you are wrong on that and it’s old thinking you haven’t cleared out yet.

If a writer is going to jump to self-publishing, keep all of the seventy percent.

Joe:

I like to call old thinking “analog thinking” but I don’t think I’m acting analog in this case.

You and I and Barry and your wife (writer Kristine Rusch) are savvy enough to do everything on our own. Editing, formatting, uploading, cover art, proofreading, etc.

But I know a lot of writers, and the ability to run a small business is an entirely different skill set than it takes to be a writer (and once you self-publish, you are the president of a small business.) They simply aren’t cut out for it.

So I believe some writers won’t mind paying 15% to an estributor who takes care of all of that for them.

In fact, I often think I’d pay that too, just so I could focus entirely on my writing, and not on running a business. I spend a lot of time doing stuff other than writing. If I didn’t have to do all of that, I think I could get more writing done, which would offset the cost of paying someone to do all that stuff for me. Plus, I love writing, but don’t love stuff like formatting epub files or uploading metadata, so if I could write more but do less of the the business stuff, I think I could make even more money.

I believe agents, and some publishers, will become estributors, allowing writers to write, and managing all the other stuff.

Barry:

FWIW, I don’t think either Joe or I was arguing that indie writers should pay agents a percentage; we were more predicting how agents will morph their business models and predicting that many writers will find the new model attractive.

You, Joe, and I are probably not great examples because we’re do-it-yourself types, but I think a lot of writers will be happy to pay an agent/estributor 15% of the backend in exchange for the agent/estributor taking care of everything but the writing. I’m a do-it-yourself type so I don’t know that I’ll go that route myself, but in theory, I could be enticed.

For example, if Joe decided to quit writing and become an agent/estributor, I’d gladly pay him 15% to handle everything but the writing.  He knows digital publishing cold and he’s a marketing genius. Plus he prefers Red Bulls to sleep. The extra writing I’d get done, and the additional product I’d create, would make it a good deal for both of us. So for me, the percentage thing is more a practical problem than a theoretical one, if that makes sense. Regardless, that’s just me and I could be wrong.

Dean:

My point isn’t that most writers don’t want to be business people. Sadly, most don’t, I agree.  Scott Carter (Young Adult writer) and I have taught a course to 40 self-sufficient professional writers who want to learn how to do it all themselves. And we’re doing another class this summer and another next fall. Last one was in October and had over 40 professional writers from around the country here on the Oregon Coast.  Great fun.  We taught them how to do covers, how to layout books, how to launch them, and how to set up a WordPress web site, all in two days. (grin) They all launched short stories before they left town.

And Cindie Geddes (a nonfiction writer) started a business called Lucky Bat Books where she has a menu of services, all flat fee, to do different tasks for writers. And she is constantly turning down writers who want to give her a percentage. As writers, we are all trained in giving the gardener who trims our hedge 15% of our house. So I’m going to keep pushing writers who don’t want to do it themselves to search for programs where they remain at 70% instead of giving 15% of the 70% away.

So on that one tiny point we’re going to differ on the outcome. But I do agree completely that most writers are not do-it-yourself types like we are. (grin) And most writers are going to need help, no doubt on that at all. We just differ on the type of help they should get. (grin)

One prediction I will make. In thirty years, the long term writers, the survivors, will be writers like the three of us, willing to take the chance, willing to take the responsibility. And those that want traditional publishing to take care of them will be “what-ever-happened-to?” for the most part. That’s a safe bet. (grin)

Joe:

Again, you’re making some great points, but you haven’t persuaded me yet about the 15%.

You told me you and Kris have 900 backlist titles (books, stories, etc.) If you had someone to help you get all 900 of your titles live, with great covers, on all platforms, by the end of the month, you’d easily offset the 15% you’d give that person with massive increased sales across the board.

Every day an ebook isn’t live, is a day you aren’t earning money. You and Kris are sitting on a ton of property that isn’t earning you anything. And if you were to pay a good cover artist, proofreader, and formatter for each title (which would cost over $800 a title), it will cost a fortune to launch all 900 ($720,000), and also take hundreds of hours (hours you could have spent writing), and unless you have super powers (you may) it will take you years to get all of your backlist titles live.

Yes, you’re going to be VERY rich. :) But that money could come within a few weeks, rather than a few years, if you had help doing all of the business stuff. And if an estributor, besides covering all of those sunk costs, also did marketing and advertising, I can see how that’s worth the same as an agent’s commission.

That said, I ultimately do agree with you that giving away a percentage of income forever, in my specific case, probably isn’t wise. But I’m not 100% sure of that, because if an estributor saves me so much time I’m able to write more ebooks, then I could ultimately be better off long-term. I spend an awful lot of time doing business stuff when I’d rather be writing.

Dean:

Again, not disagreeing with the fact that most writers are not like you and me and Barry. Most are not willing or even capable of learning all this stuff, and don’t want to for limited time reasons. That I agree with completely.

But that does not mean anyone has to give a percentage away of the property. I don’t have the will, the tools, or the time to go out and do yard work, but that does not mean that to get someone to do yard work on my property, I need to give away an ownership right in my home. That kind of thinking is old writing thinking that was forced on us by publishers and the agent model.

So, as I’m going to talk about in my series on Think Like A Publisher, I’m suggesting that writers think like a publisher.

When a publisher needs a cover done, they don’t give away a part of the percentage of the book. They hire one done. If they want to get the book up electronically or get it laid out or get it proofed, they don’t give away a percentage of the profits, they hire it done.

All the things you are talking about are one time “day job” work. (Mike Stackpole’s term.) So my suggestion, and something Kris and I are working toward because of our vast backlist is hiring a “managing editor” as any publisher would do. Why would we ever want to give away 15% of all our future earnings when we can pay someone a simple salary?

But, alas, writers are short of money all the time and it seems logical to give away a percentage to keep out of cash flow binds and get things up quickly. Right? That’s a very good point.

So here is the trade-off in math terms.

To do a cover, layout, and putting the book up maybe ten hours for a day labor job. Longer if also putting it up on POD. So say 15 hours of time total for a professional designer. To go to Lucky Bat Press,( to mention only one of many who are working on menu flat fee rates) that might cost in the neighborhood of $500.00 for the novel for all those services. More with some firms, less with others.

The book over ten years sells 10,000 copies at $4.99 (my price, not yours (grin). 1,000 copies per year or less than 3 per day average.) 10,000 copies x $3.25 = $32,500 x 15% = $4,875.00.

So your are paying $4,875.00 for a $500 job.

Over ten years a book could sell 100,000 copies or more at $4.99. Same math, only now for the $500 job you are paying $48,750.00 for those 15 hours.

Now imagine your grandkids still doing the math and the bookwork on this in 50 years….

And THAT IS NOT COUNTING the time it’s going to take you every month to divide out the 15%, do the math from the 15 different sources of income and send a check or PayPal the money to the person. Every month, or every quarter. And, of course, if you have the person get all the money first, like an agent, then you are back into the “trust me” mode, or Stockholm Syndrome using your terms. And not counting the 1099 tax forms every year you would need to file and so on and so on. To ugly for me to even consider.

Joe:

I trust my agent. Her accounting is meticulous and she’s as honest as they come. If she became my estributor, that would also mean less work for me. She’d send me her yearly 1099 like she usually does, and I wouldn’t have to worry about hiring all of the people I normally do (proofreaders, cover artists, formatters) so taxes would be a lot easier.

Dean:

(Tiptoeing past the agent discussion) If you give a person 15% to do a cover and such for the life of the product, can you ask them to change the cover for no extra charge every year? Or every six months? And is that in the agreement??? I would think if a person can get a couple hundred grand for a few hours work, they should be forced to work if changes need to be made.

Joe:

Yes. That’s another advantage to the estribution model. I can’t tell you the number of times I’ve changed covers or descriptions to try and find the one that worked best. I’d much rather let someone else do that tweaking and fine tuning. Plus, there’s the general upkeep. If I release a new title, I’d like the first two chapters to be in the back matter of my other titles. That would require new formatting and new descriptions for 30+ ebooks.

It’s a time suck. I’d much rather have someone doing that full time. And I wouldn’t have to pay the estributor each time, which is great if I’m strapped for cash.

Dean:

Here is another solution to the upfront cash flow problem that writers have who don’t want to spend the time to learn how to do it themselves.

Give a percentage, such as 15% up to the $500.00 and then that ends it. That limits all the problems. You still have the problems, but it at least limits them. You still have accounting issues, but they will end shortly.

But that said, imagine a New York publisher trying to work like that. Give the book designer 15% up to a certain fee, give the cover artist 15% up to a certain fee, editor 15% up to a certain fee, and so on. Of course that’s silly.

So I stand by a simple way of solving the problem. Hire it “day job” labor. And learn how to do most of yourself up front until the money flows enough to pay for a managing editor as any publisher does.

Joe:

I like that you broke down the numbers, so I’ll do the same.

The time I spend tending to my media empire (as my wife and I jokingly call it) is time taken away from writing.

For each book I must:

  • Obtain cover art both for ebook and print
  • Get the book formatted in various ebook formats and in print
  • Write product descriptions, unique to each format
  • Upload files to Amazon kdp, PubIt, Smashwords, OverDrive, IndiaNIC, and soon Google Books and possibly Scribd. There will no doubt be others cropping up, Mike Shatzkin [link] talks about some upstarts worth keeping an eye on
  • Very often repeat some of these steps when errors or typos are discovered, or to add new excerpts in the back matter

I can safely say that the above require a solid 10-15 hours of work on my part, per project.

In the last 12 months, I’ve created thirteen original properties. The time to bring all of these to market took between 130 and 195 hours.

I write 750 words an hour. If I had that 130 hours back to write, I could have cranked out an additional 97,000 words.

For me, that’s an extra novel, plus a novella and a short story. Three more intellectual properties.

On average, I sell 2000 copies of a novel a month, 1200 of a novella, and 500 of a short story. That’s $6575 a month I could have had, for life, because an estributor freed up some time for me.

Let’s do the math over ten years, assuming flat sales.

Thirteen properties a year that I upload myself (three novels, five novellas, four short stories) will earn me $31,000 a month, without an estributor. Over ten years, that’s $3,720,000.

With an estributor, I’ve be able to do sixteen properties a year (four novels, six novellas, five short stories) will earn $37,575 minus the estributor’s 15%, which equals $31,938.75. That’s $3,832,650 over ten years–over $100k more.

This also doesn’t take into account the money I pay to bring a title to market. $500 for cover art, $230 for formatting, $200 for proofing. That’s over $12,000 in costs I’ve had to pay by doing it myself, where an estributor would absorb those costs.

And I can’t tell you how much I dislike the business aspect of self-pubbing. I’d much rather write the books, let someone else do all the busy work. That’s worth a lot to me.

Plus, if the estributor continues to market and promote my work, that’s an added, continuous value that goes beyond the initial set-up costs.

Dean:

Joe, I also agree with your math. I am not arguing that writers could use the help. Not in the slightest. I think most could, and from the looks of some of the early covers I did on some short stories, I could have used a ton of help as well. (grin)

And trust me, I too would rather be writing than doing publishing work. I enjoy the publishing work, honestly, and always have, but I enjoy writing more, to be honest. So no argument there at all.

What I am arguing against is giving a percentage for the life of the work.

Or in other words: How You Hire the Employee.

I an arguing against what I call “a forever percentage.”

If a writer doesn’t have the upfront money to pay for contract help, they might need to give a percentage to get the professional help with covers and such.  I understand that. But unlike an agent, just give a percentage for a set time.

For example: If it takes the 15 hours at $20.00 per hour to get a project launched, that’s $300.00 worth of labor. One time labor. Day Job Labor.

So either pay the person the $300 up front or pay them the 15% up to $500.00 and then cut off the payment at that $500.00 amount. That returns you to the full 70% you have been talking about.

The point I am worried about is the life plus 70 years nature of this medium. Sure, this might not last for three years, I got that, but just in case the work going up now lasts for much, much longer, how many years do you want to do 1099 tax documents to the person you are paying the 15%?

Or ten years from now, when you total up your sales and you have paid a person who worked 15 hours ten years before over $50,000.00, and you are still paying, won’t you be in the slightest bit upset?  I know I sure would be.

So that’s my point. It’s fine to get work up quickly. But pay for day labor help as day labor help. And if you have no money to pay for the help up front, give them extra as a percentage, but cap the end point.

I’m just getting writers to get out of the “agent-think” mode and think like a publisher. No issue with getting help on problems and craft issues and getting more time to write. Just pay for it like a publisher, not a writer.

And one more point…

The accounting on this is just off the charts. I know I want all my money first and then I pay an employee (unlike the agent model used now, where an agent gets all the money and all the paperwork first, then you have to trust them to send you your share).

So with help like you are talking about, I would be paying an accountant more than I already pay one and sending out 1099s every year to each person who I gave a percentage to. And then after I die, the poor people who get my estate would have to do that as well. Ughh.  That one fact alone would stop me from doing as you suggest.

But am I hiring help with our self-publishing?  Yup, worked for an hour today with an artist who is doing covers for us. We had the Grayson covers done by a professional graphic designer. We have the Fey covers being done by a fantastic artist out of Germany. We have hired some proof readers for the novels. And down the road we have lined up a managing editor we will put on salary.

So, yes, I agree writers need help. I need help as my wife and friends will tell you. (grin)

I am only arguing against the 15% for life thinking that writers have gotten into because of agents. Nothing more.

Barry:

I think the argument here is narrower than it appears. We all agree that it would be useful to have a business manager or COO to handle all the aspects of self-publishing other than the writing itself. The question is how useful, and at what price. Different people will have different answers to that question, depending on how much they like a do-it-yourself approach, what the COO has to offer, etc.

In my experience with service professions–lawyers, accountants, literary agents, PR people, etc.–40% are incompetent, 40% are competent, 16% are excellent, and 4% are magicians. The magicians are rare and hard to find. But in exchange for the right range of services, I think they’ll be able to justify a 15% cut of an indie author’s earnings. The rest will be overcharging.

Which is where I think the gardener-type analogies start to show their limitations. First, because the condition of your lawn is unlikely to have a material impact on the selling price of your house; second, because cutting grass is a pretty fungible skill set and easy to hire out to a variety of people who want the work in exchange for a flat fee. The right (or wrong) business partner, on the other hand, has a much more significant impact on your overall fortunes, and might be someone worth motivating by making him a partner rather than simply an employee.

Anyway, fundamentally, I think we’re all just saying that an author shouldn’t pay more than necessary. If you can get the job done for a flat fee, go for it. But if you find a magician, and maybe even someone who’s “merely” excellent, you might make more money paying that 15% than you would have through some other arrangement.

Joe:

Agreed. Perhaps a better analogy is you give 15% to the gardener for the sale of a house, but the gardener continues to work there for life.

In the estributor case, there is added value that would be more difficult and expensive to do on my own.

Say an estributor has forty clients who work in the same genre as I do. She could do excerpt exchanges, and promote both my backlist and frontlist titles in their ebooks. She could also set up a hub, like Goodreads, where readers visit to interact with each other and authors. Such a hub would have user-aggregated content, both from fans and from writers. Chats, forums, contests, freebies, excerpts, updates, mailing lists, newsletters, catalogs. It would be a destination, and get more hits than my current hubs (Facebook, website, blog) because the estributor has me on that site, plus other authors, all with the latest information about what is being released next. I haven’t updated my website in forever. I haven’t had time.

A person who you constantly hire to help you has a name: a full-time employee.

What is the difference between hiring a fulltime employee (who you will need forever) or paying someone 15% forever?

But there are more duties an estributor could perform. What if, out of that 15% we paid the estributor, 3% went back into marketing and advertising? Print and radio ads, Facebook and Google ads, promoting my books.

Take it a step farther. What if the estributor also served as a publicist? Doing press releases, securing reviews, getting the author interviews and media attention.

Is that worth 15% yet?

I’m with you that a writer shouldn’t pay commission on sunk costs forever. But if there were ongoing duties the estributor performed–like that lifetime gardener–then I not only have more time to write, but I’ll likely sell more books because of that extra effort.And it goes without saying that the estributor would also be constantly looking for new venues to sell rights; foreign, translation, audio, film, enhanced mutlimedia, etc.

Take it one more step re: adding value. There’s a concern that the ebook market will become glutted with poorly written crap. A savvy estributor, who only releases edited, formatted, polished material, could very well become a brand label. Much like a publishing imprint. A book released by ESTRIBUTOR X could have a logo which automatically signifies to readers that this ebook has been vetted and is quality. I believe, in the upcoming years, such a stamp of approval could become very valuable. It has been in the past (people would buy all Arkham, Gold Medal men’s adventure, or even more recently all Leisure horror titles without caring who the author is, because they knew they’d be getting a certain kind of book.)

Plus, there are probably things an estributor could do for me that I haven’t even thought of. Such as help me create enhanced interactive multimedia ebooks.

Guess what? Most publishing contracts drawn up before 2010 give interactive multimedia rights to the author.

Think about the importance of this. My legacy publishers, which have my backlist titles and will likely never give them up, are keeping 52.5% of the royalties on ebook prices they set.

But if I released an interactive multimedia version of those titles (I have specific ideas about the content, but am staying hush hush for now until I work things out), I could release an enhanced version Of Whiskey Sour or Afraid or Timecaster for a lower price than my publisher’s bare-bones version.

Of course, that would require a lot of extra work on my part. Audio recording, interactive games, links that lead readers to specific websites, footnotes and annotation, artwork, and perhaps even added video.

If I had an estributor do this for me, I’d pay them 15% in a heartbeat.

I’m fine with paying my agent for the work she does. If she took on estributor responsibilities as I’ve outlined above, I believe she would be adding a great deal of value to our relationship, by saving me time and money, and selling more books than I could on my own. I think, in the business model I’ve described, that’s worth 15%.

Dean:
Joe, you make some great points, and I hope to have good help working for us doing exactly as you describe. Only difference is that I will be paying the person a salary instead of 15% of the 700 plus products Kris and I will have in the next year.

And when the person goes south or flips out or becomes impossible to work with, I can fire them and find someone better, a top person as Barry said, a new miracle worker for whatever is happening in five years.

So our only difference is that forever is too long for me to give anyone part of my work. I need and will hire the help, and might give short-term limited percentages. But the idea of giving someone 15% forever just does not make good business sense to me and is a toss-back to bad publishing practices.

And that one place is just about the only place we are disagreeing.

But great fun talking about it. Thanks, Joe! Thanks, Barry!

Note: This is part of a larger conversation that Joe and Barry are having on their web sites about indie publishing. Please check it out later this weekend.

Joe Konrath and Barry Eisler

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74 Responses to A Conversation: Barry Eisler, Joe Konrath, and Me

  1. Right now I have one book up. I am working on getting three more up this year plus a short story that I will give for free. I’m unknown so I’m hoping the free short story will entice more readers to order my book.

    So far this month I have earned a little over $10.00. I would like help with all the things you all discussed, but I wouldn’t want to pay a % of my sales because trusting someone now is one thing, what if their future company is taken over by a scam artist leaving my children or grandchildren with no inheritance?

    So, paying a one time fee is a good idea. Since I am broke all the time, giving me payment arrangements is also a good idea.

    Right now, I am sharing critique with two other writers. I have an editor who is on a payment plan. I have an offer to do a Beta Read for free from a writer friend and I have a Professional Illustrator who will take payments too. I just negotiated an agreement with a struggling newbie writer to critique his work and he will format for me.

    What’s wrong with this, all the critique time I spend on others takes away from my writing. However, I love helping people, so I may continue to do this anyway.
    Nancy
    N. R. Williams, The Treasures of Carmelidrium.

  2. I agree with Dean. I cannot see paying someone 15% for what amounts to day labor. Even if they are putting together book covers, formatting, etc., it’s a one-shot deal. Paying 15% for the life of the short story or book is insane.

    A writer I worked with approached an agent she was determined to have represent her and the agent told her there was no way. She had no experience to speak of and was only offering her one book. She didn’t bother to query any other agents. I helped her put together a proposal and targeted a publisher. She and I made the requested changes and submitted the proposal again (NF book). She got the contract. What did she do? She went back to the agent and said, “Now will you represent me?” The agent said yes. Why wouldn’t she? She didn’t do any of the work and she gets to collect 15% off the top for saying yes. And the agent also charges an annual fee, in addition to charges for copying, overnight mail, long distance phone calls, etc. To me, that’s just highway robbery. Her fee should be sufficient and no writer should have to pay for the agent’s overhead, but that’s another rant.

    The point is, unless the agent is actually provides an ongoing service or is involved in the creative process, the agent’s job is over quickly. A set fee should be sufficient. I’d rather hire a lawyer-in-a-box to look over contracts and advise me than to pay an agent 15% forever for looking over a contract. It’s just not cost effective, not as a liaison to a publisher and certainly not to put together cover, formatting, etc. I’d rather keep the money and invest it in me.

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