Hugh Howey has not quite broken out in the way recent self-publishing superstars like Amanda Hocking and John Locke have, but his sales record has made New York publishing houses take notice. Best known among his avid fan base for Wool, his five-part science fiction series, Howey estimates that this year alone he has sold nearly 140,000 copies of his work. Now, with an agent, he’s been entertaining offers from traditional houses. The problem, he told PW, is the digital royalty rate he’s being offered.

The first title in the Wool series, called Wool, began as a short story, which Howey self-published through multiple platforms in July 2011. Howey had already worked with a small publisher at that point—Norlights Press, in Indiana, had released his YA novel Molly Fyde and the Parsona Rescue in 2009—and though he said he had a positive experience, his impatience, more than anything else, encouraged him to go the DIY route.

Howey is very active with his fans: readers who buy print editions of his books through his Web site receive signed copies, and he regularly responds to e-mail. But he believes that word-of-mouth ignited his sales more than any outreach he did via Twitter or other social networking platforms. With the Wool series, he said, there was something of a slow build and, for the most part, his sales have seen a major uptick in the past few months; he made $19,000 from his fiction in January, $50,000 in February, and $70,000 in March. Each installment of Wool is priced at 99 cents.

According to Howey, Wool accounts for roughly half his sales. and he credited the word-of-mouth mainly to his Amazon reviews. When he joined Amazon’s Kindle Select program (which forced him to pull his titles from Apple’s iBookstore and B&N’s Nook store), he said sales rose even more quickly—boosted by hitting the Kindle bestseller lists.

Coverage of Howey has been scant—he was featured on and on the tech-centric Web site BoingBoing—and it was a reader recommendation, not press, that turned agent Kristin Nelson on to the author. Nelson read the series and contacted Howey in February. In their initial discussions Nelson said she talked about how a traditional book deal might not suit him, but persuaded him that he would need professional guidance to get Wool into the right hands in Hollywood and published abroad. “I think a number of agents [Hugh] talked to wanted him to come on board so they could get a cut of his existing [sales]. I knew we’d make money somehow, so I was mellow about those kinds of things. And I believe, if you’re taking on someone who’s already got a brand, a traditional deal might not be the best way to go, since you likely won’t get the terms.”

Certainly Howey doesn’t view the terms from the traditional houses very favorably. “It’s hard to think about giving up a 70% royalty for an 18% royalty,” he said, referring to Amazon’s digital royalty rate, compared to the rate many large publishers offer. “The transaction has changed when it comes to successful independent authors,” Howey said. “I’d be giving up existing sales [with a traditional deal]. I’d be giving up the freedom to write what I want. To publish as quickly as I want. But publishers don’t seem to realize this.” However, Howey said he would still love to partner with a publisher and reach more readers “if the right offer came along.”

For now, Nelson and Howey are focusing on selling dramatic rights and foreign rights to Wool. Kassie Evashevski at United Talent Agency is shopping the book in Los Angeles, while Jenny Meyer, at Jenny Meyer Literary, is handling the bulk of foreign sales and will be representing the series at the London Book Fair. (So far, Wool has sold in a five-figure pre-empt in Brazil, and there are offers in Germany, Spain, and the U.K.)

Even though there is a lot of new activity around his backlist and the Wool series, Howey is not slowing his writing pace. He’s currently working on a prequel series to Wool, called Legacy (which will also be published in installments); the first one, First Shift, is set to come out at the end of this month.