Who arranges for the illustrations for new childrens short stories, the Publisher or the Author ?
Generally, the publisher arranges for all artwork. There are cases where the writer of the story is a well known illustrator and illustrates his/her own work, but these cases rare. (Maurice Sendak is a good example.) You can submit illustrations, depending on the submission guidelines. It is up to the publisher to decide whether they will be used unless the writer stipulates the use of the artwork as a requirement of the rights to the story. Do your research. Children’s stories are, along with poetry and short stories, the most difficult genre to publish. You enhance your chances by researching the entire process completely before sumitting.
