One agency's new 'business model'...(?!?)

Pat~ · Aug 25, 2009

"One agency has quietly come out with a new model that requires authors to pay a minimum commission--i.e., the agent must earn a minimum amount of a sale no matter what advance the publisher pays, which means authors would "share" a larger part of the advance upfront (or even pay out of pocket in the case of very low advances).

Undoubtedly, there's no shortage of aspiring writers who would be ecstatic to pay more to an agent if it meant securing a publishing deal. But such a model is sure to raise ethical concerns. Agents may take on projects knowing they will ultimately be paid by authors rather than by publishers. Is the industry (that includes the author!) ready to accept such a shift in how agents profit?"

This, by Jane Friedman, in the September 2009 issue of Writer's Digest, p. 45. (A good read, this month, by the way--with a great memoir article by AW's own Jenna Glatzer!).

This sounds to me like a trend that, in essence, might turn out a bit like self-publishing wearing a cloak of traditional publishing. Not to mention...once the 'risk' factor for the agent is gone, what's to keep publishers from being skeptical about the books an agent sends their way? Are agents as likely to be the filter the publisher is consistently needing and looking for?

ChaosTitan · Aug 25, 2009

I saw several agents discussing this over Twitter a few weeks ago. One of them made a comment that, when hours and money was tallied, she made about $1.50 an hour. Considering the average advance is between $5-10k, agents only make $750-1500 on such a deal. Not a lot when you consider how much time and energy goes into a sale, especially if it takes months and multiple rounds of submitting.

It's an interesting business model, although I don't see it taking off. And I'm curious what the minimum commission is.

Pat~ · Aug 25, 2009

Me, too. And I don't see this as agents trying to rip off writers or anything. Seems almost more of a survival tactic, given the situation. They're working harder and harder to sell more and more books to publishers who are trying to provide an array of blockbuster books to a public that is struggling to support the industry right now.

DMarie84 · Aug 25, 2009

Hmm, that is interesting.

But then I may reconsider looking for an agent if I have to pay them MORE than what my advance would cover. I understand the need for them to make a living, but some of us writers wouldn't be able to afford what they would ask (especially if it's anywhere in the thousands of dollars).

There may be a lot less authors willing to find an agent too depending on how much they would ask for. It could become quite a headache. LOL, it's hard enough as it is trying to get published!

MsGneiss · Aug 25, 2009

Interesting, curious if it would take off. But, I can't think of any other agenting that works like that. With real estate, you pay a commission off the sale price, and so on and on, so there isn't much of a precedent for it.

Darzian · Aug 25, 2009

I don't expect the idea to take off, but if it did, it would make an interesting experiment.

I seem to recall another thread somewhere in AW discussing this. I can't remember where, though.

Elidibus · Aug 25, 2009

I don't like this. I'm already broke as it is and if my book didn't sell millions like I believe it would, I'd end up being in a lot of trouble.

A better solution then, maybe would be to just increase the Agent's share from 15 to 20%. or even 25%. That, I'm not too worried about, as it comes out of money before I receive it. And the problem of the whole "risk" ratio is solved this way as well.

Although, admittedly, an extra five percent on top of a dollar fifty an hour isn't that much.

waylander · Aug 25, 2009

I'd like to know which agency.
Maybe the one that refers 'unsuccesful applicants' to a self-publisher

spike · Aug 25, 2009

The problem is that the only thing that causes an agent to make the best deal possible, is that their income depends upon it. If they are guaranteed an commission, what's to keep them from being lazy?

geardrops · Aug 25, 2009

spike said:
The problem is that the only thing that causes an agent to make the best deal possible, is that their income depends upon it. If they are guaranteed an commission, what's to keep them from being lazy?

I wouldn't be so quick to say that income is the "only thing" driving an agent (at least not all agents). I'm sure passion has a lot to do with it.

That said, if I were given an offer for representation, I don't think I'd sign with an agency/agent operating under this policy, if for no other reason than the only outbound cashflow I'll put up with are paper, ink, and stamps.

MissKris · Aug 25, 2009

Here's the way I see it: there are lots of writers who would love to write full-time and make millions. Very few of them do.

There are lots of agents who would like to sell lots of books and make millions. Very few do.

If our attitude to the writer is 1) don't quit your day job and 2) if you can make it in publishing, well, too bad and 3) it's your passion, so of course you do it because you love it then I think the attitude should be the same for agents.

Agents are salespeople. There are loads of salespeople who struggle for years developing a base of customers. Many of them have a second job. This is the nature of sales. Folks are in it for the elusive promise of the big sale. I agree that charging a fee reduces the agents' motivations for getting the best deal possible for the writer. And I think it would reduce the quality of submissions. Do we really want only those with deep pockets being published?

Hillary · Aug 25, 2009

dempsey said:
I wouldn't be so quick to say that income is the "only thing" driving an agent (at least not all agents). I'm sure passion has a lot to do with it.

I agree that passion has a lot to do with it too.

And talent. And... Jeez, unless I'm missing something, this idea sounds like a way to say "Oh, so, you're a crappy agent with no vision who can't get a good deal? That's okay, sweetheart, take my money anyway!"

Securing an agent shouldn't be charity work.

Because, yeah, a first advance for a book will be low. Four figures, likely. And yeah, the commission off that is sucky. But an agent with an eye for talent, a commitment to classy work, and shrewd business sense? He'll be fine with a small commission the first go around. Because if he's nailed a good AUTHOR (not just a good book) who is capable of producing work with staying power year after year, that first book will sell and sell and sell, and win awards, and get translated into a bunch of languages... And then the next time the agent has a manuscript from that author in his hands? He gets to negotiate for a much larger commission.

That's the skill set of a good agent, that's how they broker six-figure deals and make good money. Finding those sorts of authors is also what makes publishing houses TRUST an agent, and be willing to give him or her better deals in the future. It takes time, and it takes talent as an agent.

Sure, agents who manages to ONLY sell manuscripts from first-time or poorly-selling authors to smaller publishing houses for their entire careers? Yes, they're getting crappy money. I guess, in my opinion, they deserve it.

That sounded harsh, didn't it? Whoops...

Pat~ · Aug 25, 2009

sleepsheep said:
Interesting, curious if it would take off. But, I can't think of any other agenting that works like that. With real estate, you pay a commission off the sale price, and so on and on, so there isn't much of a precedent for it.

Yes, these scenario turns it into more like a percentage of 'their' [services] sale price. They get their time's worth, whether or not the writer does.

Elidibus said:
I don't like this. I'm already broke as it is and if my book didn't sell millions like I believe it would, I'd end up being in a lot of trouble.

A better solution then, maybe would be to just increase the Agent's share from 15 to 20%. or even 25%. That, I'm not too worried about, as it comes out of money before I receive it. And the problem of the whole "risk" ratio is solved this way as well.

Although, admittedly, an extra five percent on top of a dollar fifty an hour isn't that much.

Yes, I think that was probably the thinking behind this. The risk ratio problem isn't solved if an agent makes, say, 1.75/hour as opposed to 1.50/hour.

Pat~ · Aug 25, 2009

MissKris said:
Here's the way I see it: there are lots of writers who would love to write full-time and make millions. Very few of them do.

There are lots of agents who would like to sell lots of books and make millions. Very few do.

If our attitude to the writer is 1) don't quit your day job and 2) if you can make it in publishing, well, too bad and 3) it's your passion, so of course you do it because you love it then I think the attitude should be the same for agents.

Agents are salespeople. There are loads of salespeople who struggle for years developing a base of customers. Many of them have a second job. This is the nature of sales. Folks are in it for the elusive promise of the big sale. I agree that charging a fee reduces the agents' motivations for getting the best deal possible for the writer. And I think it would reduce the quality of submissions. Do we really want only those with deep pockets being published?

Good point; it's never been an 'hourly wage' type of industry...so why tally up the hours for agents only?

Wayne K · Aug 25, 2009

I just came in to say Hi to Pat.

While I'm here, I'll take the chance to say that agents are underpaid. I couldn't look at query letters all day for that kind of money. Not for that kind of money. (I said it twice on purpose

) From what I've read and heard here on AW, they deserve better.

Eirin · Oct 10, 2009

Pat~ said:
Good point; it's never been an 'hourly wage' type of industry...so why tally up the hours for agents only?

Why indeed. Even with a decent advance, quite a few writers would need a magnifying glass to spot the $/hour wage for writing a novel-lenght book.

CACTUSWENDY · Oct 10, 2009

I was a real estate agent for years. I understand the % stuff. There were many times that the amount of time put in on a listing and the end $$$ in my pocket did not come out well due to the amount of time given. It was part of the way things were done.

Then came about the 'for $ale by owners' programs and a whole new ball game started. The owners paid LOW flat fees. For the LOW flat fee some ads were placed and web sites provided with the listing information. That was the basic plan.

As applied to books....that is an interesting thought. At least in the real estate arena you had a 'finished' product and there was not much else you had to provide.

Now...if the publishers were to do this, it would fall under POD/vanity type stuff.

So I don't know how an agent can be a fiduciary if he is going to have me pay him up front. I wonder what the laws say about this set up? For that matter, what kind of laws are in place now except contract laws?

I personality think this opens up a conflict of interest. Not a good way to go. But that's just my two cents.

RG570 · Oct 10, 2009

I'd rather give my member of parliament a pay raise than these New York elitists.

At least they pretend to have read my letters to them.

And they might even deserve it more than the literary agent, because they don't fudge their hours by counting lengthy blog posts about how awful writers are and how much you hate them as work, thus inflating their sensationalistic calculations of wages . . .

Jamesaritchie · Oct 10, 2009

Seems to me that the only agents who need ths business model are those who lack the ability to recognize good writers. First, it isn't like an agent represents only one writer, and if she's earning 15% of what fifteen to fifty selling writers are making, she has no write to complain. If she isn't, it's because she can't spot selling writers.

And certainly those agents who handle the hundreds and hundreds of bestselling writers out there are making a lot of money. An agent who can't find the next Stephen King, Nora Roberts, Tom Clancy, John Grisham, Dan Brown, add a hundred other names, has only herself to blame.

An agent who needs this business model is not one I'd want representing my books.

ishtar'sgate · Oct 10, 2009

ChaosTitan said:
I saw several agents discussing this over Twitter a few weeks ago. One of them made a comment that, when hours and money was tallied, she made about $1.50 an hour. Considering the average advance is between $5-10k, agents only make $750-1500 on such a deal. Not a lot when you consider how much time and energy goes into a sale, especially if it takes months and multiple rounds of submitting.

It's an interesting business model, although I don't see it taking off. And I'm curious what the minimum commission is.

I don't know about the US but in Canada real estate agents have been operating this way for ever. They get a listing and generally obtain a 3 month contract to sell the house. They advertise the home, show it to prospective purchasers but if it doesn't sell in 3 months all their time and money is down the drain. They don't receive a dime for all their work. Good realtors know the market, know how to sell and will find a buyer. Good realtors sell almost everything they list. I expect it's much the same with top agents.

Smish · Oct 10, 2009

Part of the agent's job is to choose projects he or she can sell. The more experience they have, the better they get at this aspect of their job.

I wouldn't sign with an agent with this "business model".

The writer who doesn't sell has an "hourly income" much smaller than that of the agent...

Smish

willietheshakes · Oct 10, 2009

RG570 said:
I'd rather give my member of parliament a pay raise than these New York elitists.

At least they pretend to have read my letters to them.

And they might even deserve it more than the literary agent, because they don't fudge their hours by counting lengthy blog posts about how awful writers are and how much you hate them as work, thus inflating their sensationalistic calculations of wages . . .

I think it might be time to push away from the desk and go for a walk in the sunshine...

Stijn Hommes · Oct 10, 2009

Luckily there's such a thing as a contract. If I saw a clause like this come up in a contract, I wouldn't sign it. Perhaps Victoria should discuss this on her blog to warn the newbies...

swvaughn · Oct 10, 2009

Jamesaritchie said:
Seems to me that the only agents who need ths business model are those who lack the ability to recognize good writers. First, it isn't like an agent represents only one writer, and if she's earning 15% of what fifteen to fifty selling writers are making, she has no write to complain. If she isn't, it's because she can't spot selling writers.

And certainly those agents who handle the hundreds and hundreds of bestselling writers out there are making a lot of money. An agent who can't find the next Stephen King, Nora Roberts, Tom Clancy, John Grisham, Dan Brown, add a hundred other names, has only herself to blame.

An agent who needs this business model is not one I'd want representing my books.

JAMES! Where have you been?! I missed you! Nice to see you - well, you know, hear from you. Can't see through the intertubes.

scope · Oct 10, 2009

I think this is one of the worst ideas to come down the pike in a long time. The reasons why are voluminous and many have already been posted.

I do think that agents are underpaid and overworked, but that's the fault of their employers - literary agencies. If these agencies aren't making enough money to pay agents a proper wage and also alleviate them from some of their present responsibilities, then as I suspect, the entire system is broken and it needs a dramatic overhaul (other things included). Will this come about? Yes, I think it will. Things seem to get worse every day and I don't see any signs of relief in sight. WHEN will it come, I have no clue.

One agency's new 'business model'...(?!?)

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