Negotiation

After a work is accepted for publishing, commissioning editors negotiate the purchase of intellectual property rights and agree on royalty rates.

The authors of traditional printed materials sell exclusive territorial intellectual property rights that match the list of countries in which distribution is proposed.  In the case of books, the publisher and writer must also agree on the intended formats of publication, “trade” paperback and hardback are the most common options.

Once the parties in a book agreement agree on the scope of the publication and the formats, they must then agree on royalty rates, the percentage of the gross retail price that will be paid to the author, and the advance payment.  The publisher must estimate the potential sales in each market and balance projected revenue against production costs.  Royalties usually range between 10-12% of recommended retail price.  An advance is usually 1/3 of first print run total royalties.  However, well established authors command large advances.


Inside Negotiation