I read the coolest article in the RWR this past month about the cost and profit that a publisher makes on different trim sizes (hard cover, trade, mass market) and it got me thinking about how an agent makes money (or doesn’t – as the case may be). And I decided to try and put together some of my own numbers and see if it makes sense to be a literary agent.
For the purpose of this …erm, study… we will name our agent Ms. Goodread (haha, I crack me up) and the agency GoodReads Literary Agency. Now, Goodread has just started a new literary agency and on top of the normal business expenses of starting a new agency (i.e. : business permits; PO box – because she has decided to work from home for the time being; cards; webspace; etc) she has to have a “product” to sell and starts to take on queries. After posting to several websites she finds herself flooded with potential clients and begins to wade through the slush pile looking for “the next big thing.”
In her old job she made $15/hr (not bad, but a pain to do the math quickly – so lets make it $10). Having received one hundred queries, she requests ten, and requests three fulls in order to sign one new client – she can read 40 queries in an hour (before her brain blows up) and the rest obviously takes longer. Let’s say she has spent approximately 15 hours in order to find the one client she is going to sign (that’s $150).
Then we start doing revisions with the client – a freelance editor will cost anywhere from .015 cents a word to .03 cents a word – but let’s estimate that a full manuscript will cost about $2,000. to edit from start to finish (combined total – $2,150.00).
Next, let’s assume the agent knows exactly where to send the manuscript and calls ten different editors to pitch it to (time? 4 hours or $40) and three say send it via print and the rest are emailed over. To print and mail the manuscript is about $20/per – that’s $60 (combined total $2,250.00).
Now, Ms. Goodread got interest back from the editors quite quickly – all but three passed quite fast but two were interested and one is _still¬_ reading. Within another week and a half (and this is moving quite quickly – but then again, this is a short article…) the book sells for $10,000.00 – not bad for a new author. Ms. Goodread calculates her commission… $1,500.00 (combined balance left…. anyone, anyone?)
But Ms. Goodread loves this project, believes in it – believes it has a long, looooong shelf life and is looking forward to earning back her money on royalty checks and future deals with the author.
…But it makes me wonder why it’s so hard for agents (ok, just myself) to explain to authors that while I really liked their book – I’m not sure that I “love” it enough to take it on. Do I have a minimum of $2000 to put into this book (and these are VERY conservative numbers), knowing that it may never ever sell? Do I love it? Must I be a part of its publishing life? Will I cry if another agent gets it? (If I can answer yes to ALL of these – then I offer representation. Erm, Ms. Goodread offers representation.
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This is interesting! Thanks Nadia. A different perspective on rejection, that’s for sure.
Of course, if you calculate the time the writer spent in the first place, we probably earn .05 cents per hour or something – but we have the option of keeping day jobs. In your case, it IS your day job
Well, that explains a lot. I’m glad someone finally told it like it is–thank you.
Sigh.
I need a cup of coffee.
I’ve already had a great respect for agents, for all they do for writers, but this definitely gives me a whole new perspective! Thank you for sharing this.
As a writer, I hate getting rejections
, but on the other hand, I don’t really want an agent who CAN’T answer yes to all of those questions. After all, it’s my baby 
(I know you’ve heard that before), and I want someone who loves it as much as I do. So, I’ve come to cooly accept rejections 
and take things in stride.
Thanks for a wonderful post.
And Abby- you’re right about the 5 cents an hour! Like an agent, we’ve got to love what we do, love our characters, and enjoy the time we put into it, or it’s just not worth it.
It’s all perspective. As a writer (seeking representation)–we only stick with stories that entice us to FINISH them right? So why would an agent take on an author/book when they aren’t in it for the long haul either?
Trista–you’re so right! I really like your positive perspective!
Wonder if this is the economic rationale used by those agents who charge “reading fees.”
I think the prime difference is that good agents (like authors) have to have a level of confidence or ego to get them over the fear of not selling a book – to which they say, of Course i can sell this! Why would we need to charge fees then? (If I charged fees I’d have to respond personally to every query I received… bleh… when would I agent?)
Excellent point and a great reminder, Nadia.
Abby, you’re so right about what we writers really make vs the work we put into our books, promotion, etc. A lot of people I know who aren’t writers think I’m raking it in because I have two books published. LOL
Good thing that I love what I do!
Wow, Nadia. A million thanks for spelling this out in plain English. Definitely puts a different spin on the whole submission/rejection process.
Wow. This makes acquiring an agent an even bigger ego boost.
Writing is an expensive business from all sides. I sold this year, and still didn’t break even. (Had both a laptop die from overuse, and a printer that called it quits after the third requested full.) N didn’t even factor in postage for shipping out those requests after the phone calls.
Nadia–great post.
I have to say, though, that I’ve had three different agents over eighteen years, and not one of them actually EDITED my manuscript or paid someone else to do it. I’ve been given feedback and suggestion for revisions, but never edited. In fact, I believe that the agents I’ve had would never have taken on a manuscript that needed that much work.
I know every agent works differently, but I was still surprised that you (er, rather, Ms. Goodread) would put that much time into one manuscript. That’s dedication!
Okay, second thought: Maybe some of my manuscripts DID need that much work. Hmmmmmm ….
Thanks for that post Nadia. This helps us all understand what goes on behind the scenes from the agent’s point of view.
My non-fiction agent tells me one of the reasons he likes me is that I don’t need a lot of handholding and I don’t chatter at him unless I actually need him. I’m not sure how that works in the fiction world though. Maybe if I get this beast of a WIP done, I might find out!
Interesting post. Many thanks.
What do you do, Nadia, when more than one publisher is interested in a ms? How do you ultimately choose who gets it?
While we’re at it, we hear about books being sold at auction. What’s a book auction?
Kara’s point is well taken. Is the use of a freelance editor the norm? Do they charge a flat fee? It does seem surprising that a work that an agent would believe in so much at the outset would need $2000 worth of editing. Really doesn’t make good business sense. Also, take away the editor and Ms. Goodread’s made herself a tidy profit.
Now, how many books would need to sell over the shelf life of the book for the agent to recap their fee if an editor was employed? Let’s see: if an author makes .80 per book, 15% is .12 per book. You would need to sell 6250 books to recap your loss in the first year or 1562.5 books per quarter (assuming payment on a quarterly basis) Anything after that would be profit. Given print runs and the number of venues, such a number of sales North America wide would be considered modest. Also, assume that established authors command considerably more from publishing houses. So, if you snag a first time author you believe in who says upfront that they plan on writing more, profit is a far more likely outcome in the long run.
Whoops. Forgot to add in the advance. You’d need to sell 6250 after the initial 12500 to recap the advance of 10 g’s. Still, not impossible.
The use of a freelance editor is not the norm (for me) – I read (and reread) my clients’ manuscripts before they go out. But, if I was going to “outsource” that work – that’s how much it would cost me.
The least amount of work that I ever did on a book took me five hours – I read the book, made seven suggestions (all grammar related) and then sent the book out. The most I ever did was three rewrites of the same novel – working with the author to cut it from 110k to 85k over the time period of a month… over the phone, for almost two hours a night. Yikes, right?
I loved it, I believed it – it was worth it.
Well, if you take the freelance editor out of it, the cost goes down singificantly, doesn’t it? And from what I’ve heard, this is not a typical practice
::lol:: – I think I confused people. My only excuse being – I’m not a writer. The fact is I don’t pay for editors – but every manuscript I look at gets some form of editing (from me). I don’t charge for reading queries – but I estimated how much that would cost. I did the same for “editing” – If I was going to charge – that’s the cheap standard rate for freelance editors I have talked to. It doesn’t matter how “good” or “bad” the manuscript is – it’s done on word count.
so – I’d leave it in.
Anyway, sorry for the confusion. Note to self.
Hi Lottie –
What do you do, Nadia, when more than one publisher is interested in a ms? How do you ultimately choose who gets it?
When more than one publisher is interested – you have to really put the offers up against one another and talk with your agent about which is the best for your career. Unfortunately the higher advance is so darn tempting, but you need to take a look at the whole package – the editor’s vision, the trim size they’ll release the book in, the marketing plan of similar books on their list, other books on their lists, can you find their books easily in the bookstore – do they do special promotions, do you get input on the cover & copy? Do you LIKE the editor?
>> While we’re at it, we hear about books being sold at auction. What’s a book auction?
When multiple houses are excited about a particular project, the agent can choose to set a closing for an auction – typically he/she sets a date by which all the editors respond with offers (if they are going to offer) and the terms. sometimes the agent sets the terms before hand (”We’re looking for offers on two books for north american rights only.”) – then, usually it goes in rounds, the lowest bidder being contacted first (about the hightest bid) until the they “drop out” or until the author/agent team make a decision. There are half dozen ways to do auctions – but this is the most basic.
Hope this answers your question!
Most agents usually start out in major agencies. They get a client list while working for salary as an assistant. THEN they go off on their own–with a steady source of income. Fewer than 1% of submitted mss are accepted by established agents, and a decent agent sells at LEAST 50% of the projects he or she takes on. With the less-than-1% level, that means that few agents take on any writers they feel need major revisions. Some agents are pretty hands-on. Others are entirely hands-off. Mine is in the middle. Very, very few agents hire editors–or act like them themselves! Most simply read the ms and, if they love it enough, take it on, offering a few suggestions to make it better but doing nothing like a line-by-line edit.
I would not be interested in a new agent who hasn’t had an extensive background in the field with tons of contacts. If she doesn’t start out as an assistant in a major agency or as an editor, that means she’s gaining her expertise with her new clients. And I don’t want to be a new client she’s experimenting on while she’s developing her contacts!
I think Ms Goodread’s editing timescale was a bit pessimistic in its calculation, but yes, any work done on books has to be taken into calculation, because it’s time up front for an agent – they have to do the work _without guarantee for success_ and need to feed themselves in the meantime.
On the other hand, while a new writer is a gamble that might not come off (50% success rate? Is that realistic???) as an agent pointed out to me, the complete unknowns today are the writers who will support the agent in ten years’ time when they are established and earning well. An agent who doesn’t take those chances and helps writers to develop careers will find his client base drying up.