I finished my first novel over a year ago. I've spent time sending queries to agents with no result. By chance last week, a friend of a friend, referred me to a small, brand new publisher, who wants to read my book. My question is, do you think going with a small, new publisher is a good idea?
Before I address the name she actually sent me, which is kind of hilarious, I will address the question at hand.
So I work for an agent, which means by all rights I should say no immediately. Agents don't like small presses. Their advances are minuscule or non-existent, and their profits are in the crazy land of "don't check the mail for a check anytime soon." Agents don't make money because authors don't make money. Also your book doesn't get a lot of distribution, meaning it has next to no chance of earning back the non-advance on royalties or becoming a bestseller. Ultimately, it's better for your career and your wallet to be with a major press.
On the other hand, maybe what you've written is very experimental, or isn't so great, or is great in a way no one can appreciate (meaning it's very experimental), or you just want to get published, damnit, and you don't want to self-publish. And small presses are legitimate courses to take at this point if you've failed to get an agent. It will count on your publication record more than a POD book. It's not the best of stepping stones but it is one.
Now the press she mentioned was The Grumpy Dragon, which has a worse page layout than the small press I started last year to republish one book, which means the layout is really, really terrible because I started the bar pretty low. I'm not great at .html at like, advanced levels. G-d, I think I even used the same color for the background. Still, I didn't have an MS Paint logo, and I had frames, so I'm up on these people in the realm of creating web pages meant for 1998. They also have an amusing "Where does the money go?" .pdf, which is more basic than anything needs to be. My first "this is sketchy, even for a small press" alarm that hadn't gone off based on the web page design went off in their royalty section. The royalties are way too high. From the looks of it, they seem to be about 35% but vary based on the sale price, which they shouldn't.
The way it works in a major publisher, your royalty rate is a set figure (usually between 7.5-10%) based on a set retail price. Whatever price they choose to set the actual price of the book at - whether it's in the discount bin or it's in pre-order or they're spending $4000 a week to put copies on the front tables at Barnes & Noble - your royalties per book remain the same. The time your royalties change, which will be carefully stipulated in the contract, is when the book starts selling in higher numbers, at which point there will be what's called an "escalation." That means the company has made back it's initial investment and at some pre-set number, usually 10 or 20 thousand copies or so, the royalty rate will jump from 10% to 20%. Other editions - audio, digital, etc - will have different rates entirely.
Without looking at my contract, I'm gonna estimate that for the first 30,000 copies of my book (if it were to ever sell that much) I'll make about $1 a book after I earn back my advance. I think my escalation was at 30k; not 100% sure, just remember it was bad because the press was an independent (but huge) publisher and cried poverty despite all those nice articles in PW about how well they're doing.
ANYWAY. The last, and more terrifying alarm was that there's one book out by the company and it's out through Lulu. Meaning, they didn't actually publish it. They might have looked it over and edited it (I suspect they did), but they didn't publish it. The real work of putting together a bound book and distributing it was done by another company, so going through Grumpy Dragon means you really should have just done it yourself and gone through Lulu yourself unless you are really a horrible editor and want Grumpy Dragon to edit you. Hopefully they won't do your cover art in MS Paint.
(This little tangent was for the general public, not the person with the question, who had a legitimate question and yes, it can be a difficult decision)