Book Signing Event Challenges: Protecting Your Sales and Profits
Got a couple of questions on a post I wrote a while back titled, Book Signing Event Tips for Self Published Authors. In that original post, I discussed a number of the opportunities and challenges that hosting a book signing event hold for self published authors. But it appears that authors have some additional concerns about these events, particularly as they relate to dealing with the event host. So I thought it would be good to address them in case other authors were facing them, too.
In the following discussion, “author” will mean “self published author.” Traditionally published authors will usually not do these events on their own and at their own expense. The publisher would typically be responsible for that.
As well, since it is unlikely that large chain brick-and-mortar bookstores would want to work with self published authors, this discussion will primarily refer to smaller, independent bookstores and other venues who might be more amenable to hosting these events (even though that's no guarantee they will).
What is a Reasonable Cut for the Book Signing Event Host?
The first question I received asked if a certain percentage was a reasonable cut for the book signing event host. Though the question didn’t identify who the host was, I’m guessing it was a bookstore. So I’ll presume that’s the case.
Before it can be determined if any percentage is reasonable, we have to figure out what the working relationship is between the self published author and the bookstore. Although bookstores could purchase inventory of an author's book for either the event or to offer on the shelves, a consignment arrangement is more likely.
What is Consignment?
Under a consignment arrangement, the bookstore will agree to inventory a specific quantity of the author’s book. But the author will only be paid when a sale to a customer is made. The author technically still owns the books and, depending on the terms of the agreement, could ask to take back any unsold copies. Similarly, the bookstore could tell the author to take back any unsold books.
While consignment is usually an equitable arrangement for both the bookstore and the author, there is a possibility that returned unsold books could become shopworn, representing a loss for the author since he can’t resell them as new.
A limited time consignment arrangement could be set up specifically for the book signing event, with the author immediately taking back any unsold copies.
Regardless of the details of the consignment, a written agreement between the bookstore (or event host) and the author is strongly recommended. Consult an attorney to help draft this agreement.
Why Bookstores May Ask for a High Percentage of Sales Dollars
Regardless of the time frame or number of books, the bookstore pays the author a percentage of each sale, not the full retail price of the book. The bookstore's cut covers the cost of running a retail business (which can be very high!) and any extra costs associated with hosting the event or carrying inventory.
The actual percentage can vary widely, depending on the particular bookstore. A bookstore cut of 40 or 50 percent (or more!) would not be unreasonable. If you have any retail operation experience, you realize that a gross profit margin of 50 percent can quickly get eaten up by overhead expenses (rent, staffing, utilities, etc.). So bookstores are not trying to cheat authors; they are merely trying to retain profitability and prevent losses by asking for a substantial cut of the book sale revenues.
But a significant cut of sales for the host should not unsettle any self published author who might be working with Amazon’s Kindle Direct Publishing (KDP) self publishing platform. Even on Kindle eBooks, KDP can take anywhere from 30 to 65 percent, plus fees.
And don't ask for a more author-advantageous cut claiming that the event will bring in customers who will make additional purchases! Signing event attendees are likely there just to see you and buy your book.
How Can Authors Get Money Back from the Book Signing Event?
I was a little puzzled by the second question which asked how to get money back from the book signing event. Hmm...
That question could be answered in a number of ways, depending on what the author meant by “getting money back.”
Getting Money Back: When Authors Get Paid
“Getting money back” could mean actually getting paid for books sold on consignment as discussed above. Typically, a hosting bookstore will want to handle the sales so that they can be assured of getting their cut. They’re assuming more risk and have more expenses than the author. So this requirement is not unacceptable.
But authors could worry that they won’t get paid or paid properly. That’s why a written agreement should be executed between the author and host which clearly details who pays for what and when everything gets paid. Also, how claims for breach of contract will be handled need to be part of that agreement. Again, consult an attorney to help prepare this agreement!
Getting Money Back: Profitability
If “getting money back” means the author makes enough money to satisfy their costs or profit goals, then the question becomes one of what is an equitable split between the author and hosting bookstore. This means that both parties need to have a good handle on their financial needs, and all expectations need to be detailed in a written agreement to prevent misunderstandings.
Getting Money Back: Refund
What if either the host or the author is unhappy with how the book signing event turned out? Refund requests could go both ways. Authors might want refunds for any costs or fees paid. Bookstores might ask authors to take back any books purchased and/or cover costs the store incurred. These eventualities also need to be part of the written agreement.
Tips to Help Preserve Sales and Profits from Book Signing Events
Always get any book event, consignment or inventory purchase agreement in writing! Consult an attorney to help create an agreement that is equitable for both you and the bookstore or book signing event host. Without a written agreement, it will be difficult to make claims for payments or damages.
Remember that bookstores will not actively market your book... and are doing you a favor by hosting your event. It is unlikely that a bookstore will be very interested in promoting your book or the event you're hosting there. Your event’s demands represent a cost to them and they are in business to make money... not just to help you make money.
Know your costs and set realistic profit objectives. If you don’t understand your costs and how you make money from any event or book retail opportunity, then you will never know if you are making a reasonable profit or “getting your money back.” When you sell books, you’re in business. Act like a business!
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
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© 2018 Heidi Thorne