Hillary Clinton’s book about her failed 2016 presidential campaign is being published by Simon & Schuster. The exact amount of her book advance has not been disclosed, but it is likely in the $20-30 million range. Barack and Michelle Obama sold their publishing rights for a combined $65 million. With a book advance, you get a large check upfront. Until that amount is paid back out of your future royalties, you don’t receive any additional income. After it is paid back, you start receiving royalties. According to USA Today Bestselling Author Alan Jacobson, royalties after a certain level are 15% for hardcover books and 10% for paperbacks, and 25-50% for digital books. Those are based off the retail price and if Amazon, Costco, and others your “$29.95” book for $17.99, you can probably count on the formula being based on that lower number.
So let’s say that based on these formulas, the royalties for are somewhere around $3 per book for Hillary Clinton or Barack Obama’s new books. So the publisher of Barack and Michelle Obama’s book, Penguin Random House, is either counting on selling more than 20 million books or else the royalties are much higher than normal. For reference, selling 20 million books would put them in the range of hugely popular recent books like The Hunger Games by Suzanne Collins, and Gone Girl by Gillian Flynn, along with classics like Charlie and the Chocolate Factory by Roald Dahl and Animal Farm by George Orwell. George W. Bush’s Decision Points was first published in 2010 and has sold in the 2 to 3 million copy range despite the fact that he was not very popular when he left office and has kept a very low profile. In the case of Barack and Michelle Obama, let’s say the royalties were triple that of what a normal author could make (say $9 on a $17.99 book); they would still be counting on selling almost 7 million books. Let’s say Hillary Clinton’s book deal was for 1/2 of what Barack and Michelle Obama received and that would mean that a for-profit publishing company thought that they could sell at least 3.5 million books.
Now let’s say that instead of selling her publishing rights, Hillary Clinton decided to just sell the book for $29.95 plus shipping at her own website. She would be the sole supplier so there would not be competition from different retailers driving the price down. There would be no middleman (Amazon, Barnes & Noble, Costco, etc.) between her and the customer. The book might cost $5 to print and you might have to spend 1-3% on a merchant account, so if she could sell 3.5 million books, she could make about almost $85 million on book sales. Plus she would know exactly who bought her book and probably be able to build up her email list of fanatical followers for future fund-raising or charitable endeavors.
But what about all the other things the publisher does for her, like P.R., setting up book signings, and get her book in bookstores. Does Hillary Clinton need a publisher to get P.R. or set up book signings? The media worships her. She has an unparalleled network of contacts all over America where she could sign books if she wanted to (or she could just charge more for it on her website). Sure Barnes & Noble would be mad that she didn’t sell them her book, so they wouldn’t let her do a signing there. But she could easily replace them by signing at businesses of wealthy donors, community organizations she supports (Planned Parenthood, SEIU, Democrat Socialists of America, etc.), or even local malls.
But what about fulfillment? The cost to stock books in a warehouse and pay a couple dozen people to mail out the book during the surge period would be in the tens of thousands; a rounding error on a project of this size. Once the initial surge of orders died down (in 6-12 months), she could then send the book to Amazon, Barnes & Noble or whomever, or even have her own staff members fulfill the orders.
But what about everything else? Like book cover design, editing, printing? That’s a joke, these things are total commodities (also, the cover design for this book was terrible). There are hundreds of vendors that could do this without having to sell your income stream to a publishing middleman.
When it comes to authors like Hillary Clinton, publishing rights are largely an arbitrage between what a publisher thinks they can make and how much less than this amount the author is willing to accept. It doesn’t seem that celebrity authors have figured this out.