Step 4: Earn a Percentage of Sales
At Hol, everyone—author, team, and publisher—is paid a percentage of their book's sales, for as long as it sells.
As the publisher, Hol gets 65% of the book's Net Revenue to cover printing, marketing, development costs and hopefully some profit. The team gets 35% of the Net Revenue, and determines how that share is divided among them. In this way, an author may choose to give up a percentage to entice an editor they really want, a young designer might take less to gain experience in doing the cover, or everyone may take less to hire an additional member.
"Net Revenue" is the cover price of the book, minus retailer discounts, fulfillment costs and sales commissions. But looking at it from just the cover price of the book, the overall breakdown looks something like the following:
To give a concrete example: On a first printing of 2,500 copies of a medium-length paperback with a cover price of $16.00, we can estimate the Net Revenue at $18,000 (again, the cover price of the book, minus retailer discounts, fulfillment costs and sales commissions). Using our recommended percentage breakdowns for the team, the earnings would then be:
Author 16% for earnings of $2,880
Editor 6% for earnings of $1,080
Publicist 6% for earnings of $1,080
Designer 5% for earnings of $900
Project Manager 2% for earnings of $360
Download our Team Publishing Calculator (.xls)
Obviously, the picture gets brighter the more copies are sold, but think conservatively when considering your own project's potential. We took 40 existing books similar to those we might publish—ranging from scholarly theoretical texts to popular art fiction—and applied covers prices and page lengths for each, and estimated sales of 500 to 5000 per title (the minimum and maximum for Hol's first printings). The average Net Revenue across all 40 titles was $11,000, not the $18,000 in the above example. The most successful brought in $43,000, and the least, only $2,000.
For every title accepted for publication, Hol pays 100% of the up-front costs for printing and distribution. Based on the proposal for your title, we also provide a small amount of development money, usually between $200 and $1000, for you and your team to use as you'd like. The money might go for a cover illustration, travel expenses for a book event, extra copy editing, a commissioned introduction, or anything else you can think of. In addition to printing and development, a further part of our 65% share goes toward marketing efforts for your title and for the house, including our seasonal book catalog, participation in art and book trade fairs, advertising and promotions.
And lastly, bear in mind: In addition to paperback copies, we also publish simultaneous e-book editions of all our books. Though not yet as significant a source of revenue as the paperback example above, this additional format will bring extra income to your team.
