Kevin McLaughlin has advice for self-publishers to help them watch for scammers. It’s quite good, yet the whole time reading it I had this sense of discomfort. See, there’s a lot of overlap of how I said I’d run a modern publishing house. It bothers me a bit as I know I’d be doing it in good intent. This, then, is partly introspective examination and partly defense of the model I would use.
If you’re hiring assistance you have two basic types of payment. One is a flat fee, the other is a share of your royalties.
From the writer’s point of view, the advantage of the flat fee is that it is, indeed, flat. Done and gone, no need to keep track of where the second check is going, no need to deal with possibilities of audits, no need for contingency contracting in the event of extreme success, failure, or acts of law. Just one lump sum and you’re done. The disadvantages of flat fee are there’s no reward for success (good enough is paid just as well), and that done is done. You pay for an action, and there’s no back and forth without more money changing hands. This last is often hidden; you actually pay more because back and forth will vary and those who use it less subsidize those who do it more. What this means in all is that you need more up front.
That up front cost can be enough to cause most entry-self publishers to decide to just do it themselves, even though they don’t have the time, experience, or skills to do it well.
The “slice of royalty” is the reverse of all those. Your publisher is taking as much risk as you are that your work will be successful. He or she is also deferring payment for the services with the expectation that patience will be rewarded. However, in doing this the publisher is establishing a trust relationship. One of you will be getting the checks from the distributor and forwarding the appropriate share to the other(s). That means one of you is liable to the auditing (if there isn’t an audit clause and the other person won’t agree to one then you are being scammed), one of you is responsible for various accounting paperwork, etc.
The main reason I’d prefer to charge a portion of income is that the publisher can and should also provide marketing and layout and editing and a host of other things, all of which done well magnify your sales. Again the bottom question is whether you will get more from a solid flat fee or if you’ll get better performance by rewarding success.
A hobby horse of mine on this subject is book covers. Book covers can be purchased for flat rates. Book covers can also be purchased for ‘share of royalties’. The rate in the latter case needs to be small, but it’s a valid process. (Image copyright isn’t book copyright but it’s all under the copyright law. And you’re not purchasing the image, you’re purchasing the right to make numerous copies of the image. Want to paid a single flat fee for your book? Thought not.)
All that said, I think that if the publisher wants more than 50% of revenues after printing costs, consider it a scam. Note that I agree with Kevin that if the publisher is claiming more than what Lightning Source charges, or if it doesn’t provide at least the service that comes from Lightning Source or CreateSpace or their professional peers, they’re cheating you on the printing costs as well.
Kevin mentions one scam-like action that can be such or might not be. That’s the fees up front PLUS share of income. That is actually very similar to what traditional publishing does, and so I can understand why he considers it a scam. It feels that way to me, too – at least in most cases.
However, I’d ask you to not drop immediately but to look at the details. Look for a deal that is actually a mirror of the current advance model publishers use with authors. That is, you agree to pay 30% of income after printing, and you pay $300 up front with the agreement that you don’t pay share on the first $1,000 of income.
The bottom line is that not all scams are scams. Some look like them due to the biases, abilities, and experiences of the observer. As example/metaphor, I know many people who change the oil in their cars who consider shops that do it to be scams: you’re paying HOW MUCH for 15-20 minutes of work?
In the end, then, listen to the advice of others but don’t take it blindly.