This is a sample book publishing contract for:
- Single author Allesandra Bellini who is represented by a literary agent.
- The acquisition editor managing this author is John Smith.
- Royalties are paid every twelve months.
- Two advances; $1,000 paid on signature and $1,000 paid on publication
- Reserve for returns is 15% of royalty earnings. The reserve is withheld only from earnings of paperback and hardcover titles. No reserves are withheld from the royalty earnings of eBooks.
- For below cost sales the royalty rate is zero. Below cost sales are not included in royalty escalators.
- Account executive specifies the acquisition editor for this contract.
- Royalty schedule; Annual Print, specifies the royalty statement period and the royalty statement format. You can define new royalty schedules in the Data & functions > Royalty schedule view.
Contributor Details tab
- Beneficiary is Allesandra Bellini.
- Beneficiary type is author. The beneficiary type can print on the royalty statement.
- The Agent is the Dawson Literary Agency. The contract at this agency is Calvin Harris. Contact information for Calvin Harris is specified in the Companies record for the Dawson Literary Agency.
All Contributors tab
- The All contributors tab specifies the contributors for this contract.
Advances & fees tab
- Two advance records are created. One is for the 1st advance due on signature. The second advance is due on publication.
- There is one reserve for return rule.
- This rule applies to paperback and hardcover book royalties. It does not apply to eBook royalty earnings.
- The reserve rate’s method is % of royalties earned. This method does not alter the reported quantity sold or sales revenue.
- 15% of royalty earnings is withheld for 1 royalty period and the entire amount is recovered in 1 royalty period.
- The reserve rate continues indefinitely.
This contract has 4 royalty rules;
- Below Cost rule pays zero royalties on sales below cost. The below cost rule is at the top of the royalty rule list and will be evaluated first. If the sales activity matches the criteria for this rule this rule will execute. Subsequent rules will be ignored.
- eBook rule for eBooks pays a 25% royalty on sales. This rule only executes if the format of the edition is eBook. The format is specified in the title edition record.
- Paperback rule for Paperbacks pays escalating royalties based on MSRP. 5% for the first 10,000 copies sold, 7.5% for the next 10,000 copies sold and 10% thereafter.
- Hardcover rule for Hardcovers pays escalating royalties based on MSRP. 7.5% for the first 5,000 copies sold, 10% for the net 5,000 copies sold and 12.5% thereafter.
Rule: Below Cost
Applies to tab
- This rule applies to sales below cost.
- WARNING: The below cost calculation requires that the edition (product) record has a unit cost; used when a sales record is created, or that the sales import file includes the cost of sales. If there is no unit cost this rule will not execute because the unit cost will be zero.
- Specifies that the royalty rate is 0%.
- Sales for this rule are not added to the escalation tally. Escalators will not include products that were sold at below cost.
Applies to tab
- This rule applies only to products with a format of “eBook”.
- Royalty rates apply to sales, the net sale amount. Many publishers calculate eBook royalties on net revenue (sales less expenses).
- The royalty rate is 25% of sales.
- eBook sales are not included in the escalator tally. Though it is not required, it is consider a best practice to specify this.
Applies to tab
- This rule applies only to products with a format of “Paperback”.
- Royalties apply to the MSPR, the published retail price. Many publishers base royalties on sales or net revenue (i.e. net receipts).
- Escalators are based on quantity sold for this format: Paperback. Note that paperback sales at below cost; see the below cost rule, are not included in the escalator.
- Royalty rates are 5% for the first 10,000 copies, 7.5% on the next 20,000 copies and 10% on copies thereafter.
Schedule & progress
- To do list shows three tasks for this contract; author signature, countersignature and send the author 20 copies.