Finally!

Here at last a clear breakdown of the agency model and what it means to authors.

Via Agent Kristin of Pub Rants:

Let’s say a title will sell on Amazon or Apple’s iPad for $10.00 (might as well make it easy math).

Now let’s look at the difference between net receipts if the publisher absorbs the cost of the agency commission versus if they don’t in defining and calculating net receipts.

If Publisher absorbs commission:
eBook price: $10.00
25% of net royalty (all the rage with publishers as of late)
Royalty to author: $2.50 per title sold

If Publisher does not:
eBook price: $10.00
$7.00 received by publisher (after 30% sales commission to retailer)
25% of net royalty
Royalty to author: $1.75 per title sold

Yep, definitely worth the time to find out exactly how this term is going to be defined in the contract when it comes to electronic books.

Agreed!

-JMC