I hope this is the right place to ask this but two co-authors and I are getting ready to self-publish a book with KDP. We're only having it published as an ebook, later we may go for the print, but I was wondering...how does that work as far as sending royalties? Anyone have any experience with that? Can they divide and send to all three or does it work that only one gets the royalty check and has to divide it amongst the others?
How are royalties divided if there are 3 authors?
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I'm pretty sure that Amazon will only make one payment, so you'll probably have to decide which one of you will receive that money and share it out.
You need to produce a legally-binding contract which specifies who gets what, and all that stuff. Do this now: it's really important.
You need to produce a legally-binding contract which specifies who gets what, and all that stuff. Do this now: it's really important.
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I second the "order" to get a contract in place, drafted by an attorney. Make sure it includes not only how and when any payments received by one individual are to be distributed, but what happens in the event of her death, or the deaths of any of you. The will of the person receiving the payments will need to reflect this contract's content as well. While the cost of the attorney's fee may exceed your profits, you need to ensure you all three get those profits on this and future books you all co-author.
Maryn, who saw such an arrangement go ka-boom, one writer keeping it all
Maryn, who saw such an arrangement go ka-boom, one writer keeping it all
Yes, absolutely specify everything in a contract. I've entered into a (as of now) verbal agreement with two other authors from the trade side to write one volume of a trilogy (the second act--YEAH, BABY) and we'll have to go to contracts. It's up to me to provide them, since I'll be handling the money. I don't welcome the responsibility, however.
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I understand why you don't welcome the responsibility. The "point person" for the publisher will need to handle all financial transactions (to keep the IRS happy). You absolutely need a co-author agreement, along with some financial things. At a minimum, you'll need to:
1. Receive the money into a bank account you must register with KDP
2. Put the money belonging to each author into separate accounts that don't co-mingle with the point person's own funds (I'd recommend having everyone set up a PayPal account.)
3. Deliver the royalty statement (along with any other correspondence) to each author by email or mail as soon as you get it.
4. Deliver a 1099 (if you're in the US) to each author at the end of the year that will take away part of the income the publisher will be telling the IRS that YOU have earned over the year. If it's not much, no big deal, but if the book is a success, you could get dinged for taxes on income you didn't get.
5. Whether or not you'll need a: franchise tax number, Employer identification number or trade name will depend on your state requirements. Also, whether or not you must withhold state tax or other taxes/assessments before giving the money to the other authors (and thereafter remitting to the state) also depends on your state.
The co-author agreement should also deal with: 1) Who retains custody of the original written manuscripts, notes, author copies (if any) and letters; 2) Notify everyone when a special event or deal is announced so you can decide whether to participate; and 3) Who pays the bills out of their pocket for reimbursement? For example, the publisher might have as a clause (you mentioned Kindle, and they do) that in the event someone returns a copy or demands their money back, the publisher will, in turn, demand ITS money back--from the author. That little tidbit is here (emphasis mine):
A written agreement solves all these little things up front so nobody gets weird later. I have had one with my co-author for years and even though some disputes are simply "flip a coin" to decide, it's served us well.
1. Receive the money into a bank account you must register with KDP
2. Put the money belonging to each author into separate accounts that don't co-mingle with the point person's own funds (I'd recommend having everyone set up a PayPal account.)
3. Deliver the royalty statement (along with any other correspondence) to each author by email or mail as soon as you get it.
4. Deliver a 1099 (if you're in the US) to each author at the end of the year that will take away part of the income the publisher will be telling the IRS that YOU have earned over the year. If it's not much, no big deal, but if the book is a success, you could get dinged for taxes on income you didn't get.
5. Whether or not you'll need a: franchise tax number, Employer identification number or trade name will depend on your state requirements. Also, whether or not you must withhold state tax or other taxes/assessments before giving the money to the other authors (and thereafter remitting to the state) also depends on your state.
The co-author agreement should also deal with: 1) Who retains custody of the original written manuscripts, notes, author copies (if any) and letters; 2) Notify everyone when a special event or deal is announced so you can decide whether to participate; and 3) Who pays the bills out of their pocket for reimbursement? For example, the publisher might have as a clause (you mentioned Kindle, and they do) that in the event someone returns a copy or demands their money back, the publisher will, in turn, demand ITS money back--from the author. That little tidbit is here (emphasis mine):
A written agreement solves all these little things up front so nobody gets weird later. I have had one with my co-author for years and even though some disputes are simply "flip a coin" to decide, it's served us well.
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First, Amazon sends the check where you tell them to. One check. Then it's handled according to your contract. One of you can pay the others, an accountant can get the check and pay all three, it could be deposited in an account that all of you have access to and the first one to withdraw it wins. Your choice.
Jeff
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Make sure your contract addresses character and future story rights as well. If there is success and you want to do more books, you want it to be fair to all concerned.
Just want to second what everyone else says and make sure you get a contract put in place between the three writers to cover this.
My primary advice, is to be sure this is the ONLY book that email account sells. You don't want to get a $60 payment from Amazon and first need to figure out how much of that $60 was for the book with 3 authors versus other books associated with the same email account. Amazon statements aren't that simple.