Business-savvy authors must learn to recognize and avoid a wide variety of scams and legal but inappropriate publishing deals. Some of the most dangerous ones remind me of my law school contracts professor’s warning that “a person can make as good a deal, or AS BAD A DEAL, as (s)he is able.”
Some publishing offers are very bad deals indeed.
Not all traditional publishers are out to take advantage of authors, but sometimes it's difficult to tell the "good" from the "bad" (not to mention the "ugly") unless you know specifically what to look for:
BEWARE OF “WE PUBLISH, YOU PAY” OFFERS.
The publisher, not the author, should be responsible for all the publishing costs in a traditional publishing deal. Author-publishers (aka, self-published authors) bear the costs - but also receive most (if not all) of the profits.
Beware of any contract that claims to offer a "traditional" deal but requires the author pay for some or all of the costs to produce the book. Often, the costs are not stated, outlined, or detailed up front, leaving the author on the hook for undisclosed (and often enormous) sums. Even where costs are listed, they usually exceed the amount the author would have to pay to self-publish the work - in which case, the author is better off publishing the work himself or herself, as an author-publisher.
Remember: a contract that calculates royalties on “net receipts,” defined as “amounts received by the publisher less the costs of editing and publishing the Work or less the Publisher’s actual costs to publish and sell the Work” is actually requiring the author to pay the publishing costs. This is not a traditional publishing deal.
A potential exception to this is an up-front, disclosed, properly drafted “hybrid” publishing arrangement, where the author and publisher understand and accept the cost-sharing terms.
In a hybrid arrangement, the author does share the publishing costs, but also receives an equivalent share of the benefits and increased control over cover art and other parts of the publishing process.
However, legitimate hybrid publishers are always up front about the fact that the author isn’t being offered a “traditional deal.” Anyone who tries to tell you that the “author pays” model is a “traditional publishing deal” is trying to take advantage of your ignorance.
BEWARE OF “WE PUBLISH, YOU BUY” OFFERS
A publishing contract should never require the author to purchase copies of the finished book.
Traditional publishing contracts often permit authors to buy finished copies, usually at a discount. However, traditional contracts don’t ever require the author to purchase books at any price.
One publishing “offer” I seeing a lot requires the author to purchase several thousand copies of the finished work—and to pay for them in advance!
Consider: if you contract to buy five thousand copies of the finished work, how many copies does the publisher have to sell someone else to make a profit?
Unsurprisingly, these publishers generally make no effort to sell the books they publish to anyone other than the authors.
NEVER sign a contract which requires you to purchase copies of the finished work.
BEWARE OF CONTRACTS WITH MANDATORY PAID MARKETING COMPONENTS
These contracts include a “mandatory marketing agreement,” requiring the author to pay the publisher (or an affiliated marketing agency) thousands of dollars to market and advertise on the author’s behalf.
This is not a traditional publishing deal, and it’s not a good deal, either.
Once again, the author pays thousands of dollars, up front, for normally-unspecified “marketing.” Where services are specified, they usually include only in-house press releases, trailers for the publisher’s own YouTube channel, writing Facebook posts, and other things the author could do for him-or-herself for free.
As with “We Publish, You Buy,” this type of publisher doesn’t make the bulk of its money from selling books. They make it from unsuspecting authors.
So: Never sign contracts requiring you to pay the publisher out of pocket, and if you suspect your publishing deal isn’t quite as fair as the publisher claims—don't be afraid to walk away.
The publishing "life" you save will be your own.