One of the most common questions people ask me is, “How much does a literary agent cost?” or “How does a literary agent get paid?”
The answer is pretty straightforward, but if you don’t know the industry standards, you might fall prey to an unscrupulous so-called ‘literary agent’ who is operating below the industry’s ethical bar.
So, if you’re ready to find a literary agent, don’t go into the process blind. Keep reading to find out how literary agents get paid, what the industry standards are, and how the publisher pays you.
How Much Does a Literary Agent Cost?
A real-deal, ethical literary agent doesn’t ‘cost’ you anything. Literary agents should never charge you upfront. That’s right – not a single penny. They only make money as a percentage of your royalties on book sales, and that check comes directly from the publisher.
How Do Publishers Pay for a Book?
Publishers pay authors for the rights to publish their book in two stages. The first is as what is called an “advance on royalties.” This is exactly what it sounds like. It’s money the publisher pays the author in advance of the book’s publication, before any books have been sold.
The other way publishers pay you is as royalties on actual book sales. You receive royalties on book sales only after you sell enough books to “earn out” the advance the publisher paid you. In other words, royalty checks start coming once you’ve sold an amount of books that has earned a royalty that equals the “advance.”
Most books do not “earn out” their advance. Good news is, the author never has to pay back the publisher for the difference. Neither does the agent.
How Does an Agent Get Paid?
The general agreement that you sign stipulates that the agent agrees to represent you and sell your book to publishers. They only get paid once the book is sold.
Once your book sells, the agent’s share is 15% of your share (i.e. what you make on your book). Most of the time, the 15% will only apply to royalties on book sales. But in some cases, the agent may also represent you to sell foreign-language rights and/or the movie rights to your book, in which case, they would get their percentage on those sales too.
Side note: Do NOT attempt to negotiate this percentage down. You will fail. And probably lose the agent’s interest.
When Do I Get Paid?
When you sign a deal with a publisher that includes an advance, they usually pay it in three installments. One upon signing, one upon delivery of the manuscript, and the final payment comes right before the book’s release. But don’t wait by your mailbox for a check from the publisher. The agent is the money handler in your relationship.
The publisher sends the check to the agent directly. The agent cashes the check, takes their 15%, and then sends you a check for the remainder–with a statement from the publisher, so you can see it’s all legit.
You’ll start earning additional royalties once the publisher has made back the money they paid you for the advance. And yes, your agent continues to get the check first, and continues to take 15% of these payments as well, forever and ever, as long as your book shall live.
When to Walk Away from an “Agent’s” Offer to Represent You
Unfortunately, there are some scammers out there.
If an agent is asking for money upfront, beware! Sometimes they’ll say it’s for the coaching that they give you beforehand, but if they’re asking for a 15% commission on top of the ‘coaching’ fee – that’s unethical. In the publishing industry, that kind of deal is considered ‘double-dipping.’
The rule of thumb is that you either pay for a service (like book coaching) or you agree to pay a commission (like 15% of royalties). But not both.
Now you can feel prepared to go out and find the best agent for you. Most importantly, be sure you find an agent who believes in you and your book – and will do all they can to get your book published!
The Bottom Line is This:
Legitimate literary agents don’t double dip. Beware of any so called agent who asks for money upfront or charges you for ‘coaching’ before they pitch you to publishers AND takes a commission.