The conversation began with a tweet Sara retweeted:
#dealbreaker RT @victoriastrauss Just saw agency contract language that imposes a $2,500 minimum commission fee, regardless of advance amt.Essentially, this author's prospective agent would require at least $2500 in commission instead of using the standard % of an author's earnings. (ie, if Author gets a $15000 from the publisher, the agent would receive 15% of that [$2250])
So, I replied:
@SaraMegibow Woa. I've never heard of anything like that before. Does that show up in contracts often?Here was Sara's response:
@SarahMEden no and it shouldn't. My realestate agent doesn't say "I'll shop your house, but if they pay <$200,00 I won't complete the sale"Real estate agents, like literary agents, are paid a percentage of a sale. The sale price determines what their commission is.
If this agent who set a required minimum were earning off a regular percentage--we'll say 15% because that's relatively standard--they would have to sell their client's book for just over $16000 to earn that minimum. For some books, this would be an easy thing to do. But, not all books are going to get that advance--perhaps they are a better fit with a smaller publisher, or one that offers lower advance but better royalties, or the book is in a genre that doesn't sell in the big numbers that other genres do.
The agent may simply not close a smaller deal despite it being a better fit (or the only fit) because that commission is guaranteed them in the contract.
***Also: Please see Robin Week's excellent & insightful comment below for additional problems this scheme may create!!***
Minimum commission guarantees are not standard in agency contracts. If you see one in a contract, proceed with maximum caution!