How Auctions Work
And how to get one
I’m still chewing on all the great suggestions for newsletter topics from this subscriber post a week or so ago and today we’re tackling one of them: what’s an auction and how does it work? Tbh, I assumed I did this one already, and maybe I did in bits and pieces, but let’s talk about it all in one place here.
What’s an Auction?
An auction is one way a book can sell to an editor. Very generally, it means more than one editor wanted the book, and they bid different, increasing, amounts of money for it, and at some point, someone wins the auction and gets the book. It’s very exciting! But it doesn’t play out like you think it does, i.e. there is no auctioneer and no one has little paddles with numbers on them. It doesn’t even happen live, or more accurately, it usually happens over the phone or email, not with everyone in a single room or Zoom or conference call. Sorry to ruin that visual for you, lol.
So, How Does it Work?
Different agents do auctions different ways, and sometimes it varies from book to book. Agents sometimes use auctions to manage a sale when they think or know there will be a lot of interest in a book, and sometimes, I assume, agents may set an auction to drum up interest in a book. (It is my opinion that this doesn’t really work and will in the long run erode editors’ trust in that agent, but every agent is different and what works for some might not work for all.) Either way, the agent sets the auction rules and the editors promise to follow them. Trust is big when it comes to auctions, and if anyone messes around, on either side, it doesn’t bode well for future submissions or acquisitions.
Types of Auctions
There are roughly two kinds of auctions most commonly used by agents in the US. I’m not sure if it’s different in the UK, so UK friends feel free to let me know if you know otherwise. They are:
Round Robin: a Round Robin (tbh I do not know where the “robin” part comes in, but as a birder, I like it) auction is structured so that after all editors make their initial bid, the agent puts them in order from lowest to highest, and the lowest bidder has to try to beat the highest bid, and if they can’t, they’re out. Then the next one goes, and the next, and the next, depending on how many bidders there are, and eventually it comes down to one or two top bidders. Every agent sets different overall rules, and two I always set are: 1. Editors cannot match the previous bid and expect to make it to the next round. They must increase by whatever interval they wish. (Some agents set this interval, by saying increases must be my $1000 or $5000 or whatever, but it’s rare that an editor would be like “ok my bid is $10,0001.” just to get around a matching rule. It’s not like that.) And 2. The author can choose the offer of their choice. This means that if the top two bids are $10,000 and $12,000 but the author likes the editor who bid $10k better (or if the royalties are better or if there is some other factor that sways them) then they are not obligated to take the higher offer. Again, different agents make different rules, but I would highly doubt you, as the author, would be forced to take an offer you did not want just because the dollar amount was higher.
Round Robin auctions can take a long time—days, even a full week. You would think that each editor would know the top amount they can bid, and then mete out up to that amount round by round, but apparently it does not work that way! Or it doesn’t work that way at all houses. (Since I have never worked at a trade publishing house, there are still some inner workings that are a mystery to me!) Some editors have to go back to their bosses at each round and say “can I have X much for this book?” and sometimes there are several people to ask and those several people have meetings and are out of the office for vacations or their kid’s baseball games or it’s a company-wide meeting week or god only knows the things that slow things down. (This is not a dig on editors! They don’t have a whole lot of control over this!)
So why do it if it takes so long? Well, because speed is not most important thing, imho. We want it to happen fast because it’s exciting to sell a book, but that doesn’t mean it’s the best way to do it. I personally believe that a Round Robin auction allows for a book to earn its market rate, i.e. the most a publisher is willing to spend to acquire a book, on the open market. I think, and again this is just me and your agent may disagree with me and that’s fine, that other auction types can unnaturally inflate advances which, in the short term is nice because $$$$$, but in the long term can hurt an author’s career and/or an editor’s relationship with that agent. Bottom line, if an editor wants a book, they’re going to try and buy it, regardless of who is selling it and the hoops they have to jump through. But if an editor is on the fence and those hoops are super annoying, well….. Again, imho.
If a Round Robin auction isn’t the way to go, an agent might do what is called Best Bids. They say, hey editors, if you want this book, please send me your very best offer by noon on Wednesday and winner takes all (or whatever rules they stipulate). The other editors do not know who they are bidding against (which is also true of Round Robins) or how many editors they are bidding against, and they don’t know what the high bid will be so if they really, really want the book, they assume they have to throw a ton of cash at it. Kate, I know you are thinking, if an editor is going to throw a ton of cash at you, why would you not do best bids all the time????????? In a perfect world, this would make sense. But surprise, our world is not perfect. I believe that Best Bids scares off the middle of the road offers from even coming to the table and I would rather sell a book for $45,000 in a Round Robin auction than have that publisher not even make an offer because they think the book is going to go for six figures elsewhere. And if that six figures never materializes and we get no offers that means no sale. We can’t always go back and say Do over! It’s Round Robin now! That editor with $45k could be like hmmmm, no one wanted this for the big bucks. And then maybe, if we’re lucky, offer $25,000. See? This is FANTASTICALLY hypothetical, but it’s not out of the realm of possible.
Sometimes an agent will set up a two-round Best Bids auction, which is what it sounds like. The agent will open the Best Bids auction to everyone for the first round and then they may take the top three or whatever offers to a second round. I….do not do this. I mean, Best Bids should be your best bid, right? But my preference is not important here. Many great agents do this and I trust their judgment.
When Does an Auction Happen, Though?
It would be wonderful if I could just email everyone and say we’re having an auction! and the multiple offers land in my inbox and everyone goes home happy. If only! If I could, I would. I personally do not set an auction until I have two offers in hand. That means I have sent out a book and editors have read it and gone through all their internal hoop to make an offer and then sent me that offer, times two. Not all or even many agents do it this way! I could very well say to all editors reading the submission that if they want to buy it I need their offer by Wednesday at noon and they either can do it or they can’t. This a common thing agents do! It’s totally fine! But I don’t like to throw a party unless I know a few people are going to come. That’s just how I do it and it works for me and my clients.
If I had something so incredibly big, like Britney Spears’ memoir or something, I would definitely set an auction before I got a single offer. Not that my clients aren’t superstars, but I don’t really represent cELebRIties like that because I don’t chase them and I don’t have time for all that. (I mean Britney call me but you know.) Are only celebrities’ books the ones that go for huge auctions? Not at all. It’s a case by case basis for each book and each client and each agent. I would do a best bids if I thought it was the way to go, but so far, Round Robins have worked out just fine for me and my clients.
What if Your Book Doesn’t Get an Auction?
Congrats! You’re like 98% of all authors out there! Most books do not sell at auction. The mere holding of an auction does not guarantee multiple offers. It’s wonderful when it happens, but I always say, it only takes one offer to sell a book. And even if your book does go to auction, it doesn’t guarantee you’ll get a million bucks. I’ve had auctions end up at less that $20,000 because that was what the market rate was for that book in that genre. No amount of finagling on my end with best bids or whatever would have gotten that author a higher advance because the publisher would have simply not bid at all or gone that high. I can’t force a publisher to give me a dollar amount they aren’t willing to pay. If I could, I would! If you book sells at auction, it’s a nice feather in your cap. It means (the way I do things, at least) more than one editor wanted your book, which is always nice.
These aren’t any special trade secrets I’m sharing here. I tell all editors and, of course, clients, that this is the way I do things. Transparency and honesty are the keys to any agent’s business and reputation. There are things editors don’t get to know, like the specific editors or imprints they’re up against in an auction, but they do get to know the amount of the previous bid or the high bid (depending on the auction type/rules) and the number of people in the auction (again, ditto) and if comes out that the agent is misrepresenting that stuff well, it’s not a good look.
Auctions are fun and exciting, but they are just one way a book sells. We should all be so lucky to have auctions in our futures.