Attention Authors: I Tripled My Royalties, And You Can Too
So, I think this piece I wrote on the Huffington Post (and reprinted below) is fairly important. Or at least, it could end up being important, if other big authors understand what I'm saying and end up doing something similar. This is very much the same thing I talked about on TechCrunch TV last week.
This all ties into what I've been working on recently. I sold the publishing company I created to do my last two books with, Tropaion Publishing, to a three guys running a similar--but I think better--start-up called Lioncrest Publishing. It was mainly a talent acquisition, and I joined them as an equity partner in their company. There were a lot of reasons why I did this, but the main one is simple: I needed help in order to effectuate my vision in publishing, and these guys get shit done.
I'm not sure how much you're going to see about us in the press--we aren't that type of company. If you notice I barely talk about the company in either piece. And I probably won't spend a lot of time talking specifically about what we do at Lioncrest or how we're doing it on this blog. Talking about doing shit means you aren't doing it. That's not us. But we are hiring, and I am always looking for motivated, hard working people to work with us. Show me you are one: [email protected]
Here's the Huffington Post piece, reprinted here:
Attention Authors: I Tripled My Royalties, And You Can Too
DISCLAIMER: This post is only intended for successful published authors, agents, editors and other people in the publishing industry. It might also be interesting to people who enjoy reading case studies about disruptive business strategies, but I can't guarantee anyone else will care. If you're looking for a funny, light read, this isn't it.
Part 1: First the test, then the lesson
I know how an author can triple their effective royalty. This is on the same sales, with nothing else substantively changing in any other aspect of their book. Same books (print and ebooks both), same bookstores, same placement, same customer experience, even the same publisher (sort of). I'm sure you're skeptical. I know you think this can't be done. You're wrong.
I know an author can triple his royalties on the same sales, because I've already done it.
First the backstory, and then I'll explain precisely how I did this:
My name is Tucker Max. I published my first book, I Hope They Serve Beer In Hell, in January of 2006, with Citadel, a division of Kensington. It spent the next six years on the NY Times Best Seller list, hitting No. 1, selling more than 1.5 million copies worldwide (it's still selling great) and was called the book that invented the "fratire" genre. My follow up was Assholes Finish First, and was published by Simon & Schuster in 2010. Basically the same sales/press story -- three years on the NY Times Best Seller list, hundreds of thousands of copies sold (still going strong), etc., etc.
After two very successful books, I realized the weird paradox of the publishing business that every author eventually learns: It's terribly exploitive of authors (paying them a very small royalty on sales), yet it doesn't even do a good job maximizing overall revenue from book sales. Publishing companies are like schoolyard bullies that can't even fight well.
In preparation for my third book, Hilarity Ensues, I stepped back and tried to figure out a different approach. Frankly, I wanted to keep more of the money my books made, and I wanted more control over the publishing process, but I didn't want to deal with the problems that come from being in the "self-publishing ghetto." There had to be a way that was fairer and more lucrative to me as an author (and maybe even more productive to the publishing companies), so I set out to find it.
Part 2: "I'm not an author anymore. Now, I'm a publisher."
I was not one of those people just happy to have an ISBN number and Library of Congress entry to my name. I expected the publishing industry to act like a real business. When that didn't happen, I was well-equipped to figure out why, having come to writing by accident from an educational background of economics and law. I read everything I could about the publishing business, compared it to other similar businesses, saw how those were disrupted, applied my experiences with publishing and came to a key realization:
I could replicate everything that a publishing house did -- except for distribution. So what I needed was a distribution deal, not a book deal.
Think about what basic services publishers provide for authors:
- Paying an advance
- Editing (content and copy)
- Cover Design
- Layout and production
- Marketing and promotion
Nos. 2 through 6 can be easily replicated with freelancers, and usually with a higher level of skill than a publisher can provide. If you are an established author who has sold a lot of books, you don't need No. 1. Yes, big advances are nice, but what if you made more than three times as much money in the long term -- on the same sales -- by taking a bigger cut of the revenue? I would skip the upfront money to make more long-term.
The big choke point is No. 7. It's essentially impossible to replicate the trucks, warehouses, retail relationships and sales teams that publishers have developed over the decades. And the reality is, even if you could replicate these things, the Big 6 publishers would still be better at this specific job.
These facts make the path forward clear: I would no longer be just an author. I would cut a distribution deal with a major publisher, become a publishing company, do more work -- but keep all the profit.
Distribution deals themselves aren't unusual. There are hundreds (maybe thousands) of publishing companies in America. How many of them have trucks and warehouses and sales teams? Almost none. You didn't think Harvard University Press handles book logistics or sends people to B&N buyer meetings, did you? Of course not. They use a Big 6 publisher to do their distribution. In fact, there are really only about eight major book distributors, and each of the Big 6 has a separate distribution division that handles the distribution services for other publishing houses.
Well, why can't I do that? Why can't I be a publishing company and just cut a deal directly with a distributor, do everything else, and keep all the profit of my writing for myself? Yeah, I'll have to take a risk by skipping my advance on my third book, and it'll require some more work on my part -- but I am more than happy to hire freelancers if it means by royalty checks triple in size.
So that's what I decided to do. There was one problem: No author had ever done this before (at least, no one I talked to had heard of this, but who knows, maybe it's happened). I couldn't find a guide or instructional manual to follow. I explained my plan to my agent, Byrd Leavell. Byrd is very smart and always willing to test new things, but even he was unsure how to do this. Not only that, we already had two seven-figure offers for my third book in hand. Byrd was very unsure about turning them down to try something so new and unproven (there's a "Byrd in hand" pun to make here, but I'll spare you).
The publishers themselves didn't really know how to deal with my proposal. I won't name the house, but Byrd and I took a meeting with an editor at one of the Big 6 publishers who'd made a seven-figure advance offer on my third book, and we brought our counterproposal to them. I told the editor I didn't want a book deal. Or an advance. Or even an imprint with a revenue-sharing deal. I was now my own publishing house, and I wanted them to be my distributor only.
He looked at me with this confused, quizzical look, as if he couldn't believe I would even think of such a thing, much less have the balls to ask for it out loud. After a few seconds, he said, "Tucker, we wouldn't even give that deal to [huge author they publish who sells way more books than me]." I shrugged, smiled and said, "Well, maybe you should."
There was no distribution offer from that publisher.
Part 3: Tropaion Publishing
I won't bore you with all the details about the deal negotiation, but eventually Byrd and his partner Scott Waxman helped me get the exact distribution deal I wanted with Simon & Schuster. I was no longer just an author; I now owned a publishing company with full retail distribution. I had to do all the work a publisher does, but I also got to keep all the money. The terms were really no different than they give any of their distribution clients, and the way it works is very simple:
My publishing company (I named it Tropaion Publishing) contracted with the author to write the book (that would be me, obviously), did all editing and production work on the book, and paid all up-front costs for printing and distribution. Simon & Schuster handled the printing, shipping, warehousing, sales, accounts receivable and returns.
This means I went from just another author with the same royalty deal every author gets -- 15 percent of hardcover price -- to owning my own publishing company and taking 89 percent of net receipts. In practice, the amount of money I made on each hardcover book sold went from about $3.60 to about $12 (before distribution costs). Nothing else really changed.
This is not a theory about what an author could do. This is already done. Hilarity Ensues came out in February of this year, released under Blue Heeler Books (which is an imprint of Tropaion Publishing). It looks and feels just like my first two books. It was in all the same bookstores, same front tables, same press and marketing (that I handled, like I already had to do on my first two books, because publishing houses don't think you actually have to tell people you have a new book). Everything was basically the same, except I did some more work...and my checks tripled in size.
There were a few other benefits too: because I owned the publishing company, that meant I was in charge -- of everything. Now I could do all the marketing things I always wanted to do in the past, but couldn't because of how risk-averse Big 6 publishers are. I could give various sales offers to my fans, I could immediately put my books on digital platforms all over the world, I could spend a bunch on co-op, I could do all sorts of things that I always thought my publisher should do, but didn't. Outlining all the different ways I used this new marketing freedom to help sales would require a second post (that I will write soon), but consider these two facts:
1. Hilarity Ensues debuted at No. 2 on the NY Times Best Seller list -- which is a higher debut than either of my previous books (and it's still selling great, on a faster pace than either of my previous two best-sellers).
- The marketing I did was so effective, it pulled my previous two books back onto the list. In the long history of the NY Times Best Seller list prior to 2012, there were only two authors that ever had three books on the non-fiction list at the same time: Malcolm Gladwell and Michael Lewis. Well, this year, my name was added to that list, because of the way I marketed this book.
Part 4: The path forward
Like I told you, this is not self-publishing. Nor is it a trick or a scam or anything like that. It is, quite literally, owning your own publishing company. It's also an extremely effective way to substantially increase the amount of revenue you make on your book sales and gain total control over all aspects of your book's creation and promotion.
I won't pretend that this is easy to do. Figuring out that it was even possible to get this deal, and then negotiating it, was hard enough, believe me. And it's also a lot more work than normal publishing. I didn't just get to hand off my manuscript and then let everything take care of itself. And of course, there is a bit more financial risk involved -- after all, advances don't have to be paid back.
But it can be done. There is nothing special about me that would prevent other authors from doing what I describe above. I got this deal simply because I asked for it. If you are an established author who has a track record of success, you can do the same thing I did, and it can work just as well.
Not only that, but I can teach you precisely how to do what I did. In fact, I am going to end with this offer:
If you are an author who has an established track record of sales success (lets say at least 500,000 books sold, either print or digital), and you are interested in doing this for your next book, I would be happy to talk to you further about how to do it. I've explained enough in this piece that a smart person can figure out the rest, but there are still some details left out for the sake of brevity (for example, how to structure the distribution contract or the specific production steps you need to take). I know I wish someone had walked me through all this at the beginning of my negotiations for Hilarity Ensues, it would have saved me a ton of time. I'm willing to save a ton of yours.
There is no catch to my offer. There's no contract or NDA you need to sign (I already talked about this on TechCruchTV, after all). I'm not going to charge for this information, or even my time. Obviously, I won't do the work for you, but a few emails or phone calls to help you really flesh out the specifics are no problem. (If you want the set-up I have, but don't want to do the work, I can refer you to a brand-new publishing services company that will do everything I outlined for you, and of course, I have a financial stake in the company, but I don't even have to mention their name if you don't want me to.)
Understanding what to do isn't the problem; if you are a successful author with a high level of consistent sales, the only obstacle for you now is the decision to take control of your career and own your own publishing company. If you want to talk, the best way to start the process is to just email me: [email protected]
Please be clear: Unless you have a long track record of sales success genre such that you can be reasonably sure of future success, this sort of deal doesn't make sense. You have to pay distribution costs upfront, so unless you know what your sales are going to be, you could lose a lot of money. Realistically, there might only be 250 authors currently publishing in America for whom having their own publishing company with a Big 6 distribution deal makes financial sense, and definitely not more than 500. For newer, smaller or mid-list authors, I think a very good case can be made that a Big 6 publisher still brings a lot of value, and for most beginning authors with no audience, self-publishing is probably the best bet.
I'm making this offer to help because I'm tired of the way publishing is done. I think it's wrong and non-sensical for both authors and publishers in many ways, but instead of just complaining about it, I want to help change it for the better.
Yes, I could probably figure out a way to charge for this information. But that's not really my goal. If I try to profit directly from this information, that limits the impact it can have. The more people that know about this alternate model of publishing the better. Frankly, I'd rather make a little bit less money if it means living in a better world for books and publishing in the future.