Recently there has been a new trend in offering Multi-Author Bundles or Boxed Sets for sale. It’s a great deal for the readers, who are getting to sample from many authors at once, and a great deal for the authors who get to cross-promote their work to readers who may not have been introduced to them yet.
The bundle phenomenon is really picking up steam, and I’ve formatted quite a few multi-author and single author boxed sets for many of you. But I’ve started getting a lot of questions about the multi-author bundles and how certain financial aspects should be handled. I hate not having answers for my clients so I started looking into it. But after several hours of striking out on Google trying to find a blog or website devoted to the financial side of the issue I started asking some of my clients who’ve been successful at bundling about their experiences and advice on the subject.
Sometimes the bundles are published by publishing houses, but a large portion are now being self-published. The authors that go through a publishing house have things a bit more streamlined in terms of sorting out the logistics. They have professional contracts and the publisher handles all the royalty payments.
However, when authors choose to self-publish their boxed set this can present some challenges when figuring out how to set things up on the financial side. Specifically, how do the authors distribute the royalties for the sales?
For example, if you have 5 authors and they self-publish a single titled bundle of five stories, that’s technically 5 books by 5 authors smashed into one. Currently all the major self-pubbing retailers (KDP, Nook Press, Smashwords, etc.) are only set up to accept a title from an individual source, be that a publisher or an author. So, that means only one “entity” can submit the bundle. And consequently that one “entity” is the only one who gets paid. So, how do we handle this challenge?
1. Here’s one scenario from New York Times Bestselling author Stacey Joy Netzel. I learned from her that for the highly successful bundle, Loving The CEO, (she contributed her title More Than A Kiss), they had one author submit the book and receive the royalties. Then that author paid out the equally divided royalties to the other authors at predetermined times, monthly, quarterly, etc. A contract is probably advisable here just to make sure that everything is consistent and every person is on board with all the details.
The tricky part with this method is for the author who originally receives and distributes the royalties. They also have to send out 1099-MISC tax forms at the end of the year to each author to make sure that the tax burden is evenly divided. Otherwise the royalty catcher will also catch a massively disproportionate tax burden from Uncle Sam. So, discussing the finer points with an accountant would be a great idea here.
1.a. Here’s a trick I learned from New York Times Bestselling author Lauren Hawkeye. It is the same as the above method, but is a helpful way to handle the royalties when publishing a short run boxed set for between 1 and 3 months. Instead of paying out the royalties as they come in each month, wait for the entire publishing run of the book, then a few months past it until all final royalties come in, then distribute a single payment to each author. Keep in mind that this is going to be a 3 to 6 month wait considering that most royalties are paid 60 days after the sales months by some retailers, and quarterly by others. So if you take your book off sale on the 31st of the month, you’ll have to wait 60 days until you get that last payment from Nook and Kindle, but will potentially have to wait longer for payments from Smashwords and All Romance e-books if the quarterly cycle is later in the year.
2. This next scenario from another author is more technically involved and may be a bit more of a logistical challenge when working with so many people who may not live in close proximity to each other. The collective of authors can set up their own publishing LLC or corporation in order to act as the single entity to publish the book, then receive and distribute the royalties. This frees up any one author from having to handle payday each month and tax documents at the end of the year, but it’s more difficult to set up. Once again, an accountant may be needed to help setup the LLC and manage and distribute the funds each month. But that accountant will of course have a fee for those services. The benefit of this method is the potentially “hands free” nature of it once everything is set up. The drawbacks are the initial set up and cost outlay.
3. This last method is what I’ll call it the Charity method. It’s basically the same as the first method, but in order to avoid the payouts and tax documentation the authors agree to donate all profits to charity in the name of the book and its authors. This way the authors still get the benefit of cross-promoting, the readers get a variety of different author voices, and a worthy cause gets some much needed financial help and visibility.
I hope this helps answer some questions and offers some possible solutions to the challenges of self-publishing multi-author boxed sets. I’m interested to know of any other methods or experiences you might have had with multi-author projects. Feel free to comment. I’m grateful for any insights that can help others to succeed with this. Thanks for reading:-)