Deep-discount royalty clause
This clause states that if your book is sold at a discount above a certain percentage of its list price, the royalty you earn on those sales will be lower
In plain English
This clause states that if your book is sold at a discount above a certain percentage of its list price, the royalty you earn on those sales will be lower than the standard royalty rate.
What it means in practice
In practice, this means that if your book is sold to retailers or distributors at a deep discount, such as for bulk purchases or special promotions, you will receive a smaller royalty for those sales. For example, if your standard royalty is 10% and the discount threshold is 50%, you might only receive a 5% royalty on sales that exceed that discount.
What's standard
It is standard for publishers to include a deep-discount royalty clause in book contracts, with the discount threshold typically set around 50% of the list price.
Red flags
A discount threshold lower than 50% of the list price
A significantly reduced royalty rate (e.g., less than half of the standard rate) for deep-discount sales
Lack of clarity on what constitutes a "deep discount"
What to ask for instead
Ask for a higher discount threshold or a less drastic reduction in royalty rates for deep-discount sales. For example, you could propose a tiered royalty structure that decreases gradually as the discount increases.
This is information, not legal advice. Contracts turn on their exact wording and your circumstances — before you sign, have a publishing lawyer or a body like the Society of Authors or the Authors Guild review the actual document.