Sales
Tables
Part 1 &
2
by Joel Mabus
originally
published in:
North American Folk Music and Dance Alliance
Newsletter
Vol. 10, No. 2 & 3, 1999
used by permission
Part 1
This issue, let's take a look at the back of the room. At every self-respecting folk concert these days, there is a table of recordings - CDs, mostly, and tapes perhaps - and maybe some books, videos, t-shirts or even fly swatters for sale. The reason is simple: the artist's sales are an increasingly important part of the overall touring picture.
First, there is the basic fact of life that the door receipts alone sometimes just can't support the cost of the artist's appearance. A brisk night at the sales table can often overshadow the artist's cut of the door, or the flat fee. Secondly, for many folk performers the off-the-stage sale is the only viable distribution that is available to him or her. The best way for your work to land in your fans' collections is to sell it to them yourself.
Even if you are with an established label with decent (in folk music terms) distribution, there is just no practical guarantee that the local “Best Buys” will be stocked with plenty of your latest for the weekend after your local concert. More often the scenario is that fans will plead to deaf ears to order your CDs into the “folk” section of the local mega store. And the local mom-and-pop store (if there is one) may not have the budget to stock all the good music they would like. You may sell via the internet, but not everyone is comfortable buying the hi-tech way. The table at the back of the concert is still your best bet to get the music in the hands of your fans.
Many of the most important decisions concerning the sales table happen long before you arrive to play: First and foremost, you should negotiate the strategy of sales with the venue at the same time you negotiate your contract. There are four big questions:
- Will they let you do sales without a commission?
- Will they provide a table or area?
- Will they staff it?
- Will the staff be fiscally responsible and cover any shortfalls at the end of the night?
Many of the smaller, friendlier folk clubs answer yes to all or most of these questions. Bless them. Some see this as a courtesy to the struggling performer who is playing for peanuts anyway. But, please, don't assume that this is the case. And please don't take a personal offense if any or all of the above questions are answered with a firm “no.” Everyone has a different business sense - or a different circumstance - and may have some fixed ideas about the way things should be done. Besides, if you are a little past the “struggling” stage, the venue might want a taste of your sales as a way to share the rewards of a well-staged event. But remember - it is entirely reasonable to negotiate any of these points.
The question of commissions is probably the biggest one. There are, of course, two sides to this question. The club may view the CD sales as a revenue source to be shared - they are delivering an audience to you, after all. And they may see 15% as a small take off the top to help recoup their expenses. But you may argue that the audience came to see YOU, not the club itself, and that selling the CDs is your own side business with its own overhead, inventory and fixed costs. And a little easy math can prove that the simple 15% of gross can quickly approach 50% or more of the profits of your retail operation.
There are no easy answers as to which side of the argument is “right.” Each concert situation is different. My point is simply that these things are usually negotiable, just as surely as are the terms of the performance itself. Weigh all the issues when you are deciding the initial agreement. If the venue insists on 30% of your sales, but will not provide you with any support for your table, then you might not give them much of a break on your fee. On the other hand, if you suspect a good turnout and brisk sales of a new release, you might play for a much lower performance fee if the venue will sell your product at no cost to you.
But it is, of course, in your best interest as the artist and retailer to try to avoid paying any fee for the privilege of doing business. Here are a few points you might consider in your negotiations:
- Don't rob Peter to pay Paul. If the club pleads poverty - that they truly need part of your sales profits to meet their budget - ask about a commission kicking in only if they can't meet their “nut” on the ticket sales. Do they expect your show to be a deficit in their books? If that is indeed their expectation, you should be aware of that fact. It should frame the entire discussion of fees and percentages. It doesn't make a lot of sense for the promoter to take fifteen percent from your left pocket in order to fill your right pocket at the end of the night.
- Whose crowd is it anyway? If the venue is arguing that they deserve a share of sales because they provided the audience, ask them if they draw the same crowd for every act that appears. Have you played in this town before? Mention your mailing list (and the cost of it) if you send one. Do they sell coffee and baked goods? Or liquor? Do they offer a percentage of those sales to the performer?
- Quid pro quo. Some venues (often art fairs, First Nights, etc.) will demand a percentage of your sales, but are not providing any support services - no salesperson, no table, no security. If you must pay a fee, try to get something for your money. Ask for help schlepping (or storing) the boxes - ask for a table and some chairs - try to get something in exchange for your loss of profit. Appeal to basic fairness.
- Know when to concede. It doesn't pay to make an enemy of your partners in concert promotion. Good faith negotiation can lead to some good-natured haggling. But don't let the haggling turn into acrimony. Know your break-even point. Always remember that if you really believe you are being screwed on commissions, you have the option to leave the CDs in the trunk of your car. Would you rather do that? That, indeed, is the bottom line.
Just be sure to broach these issues up front. Nobody likes an unpleasant surprise. Minutes before a concert is not the best time to negotiate a deal on sales. Even worse is negotiating the terms after the sales have been made.
Next time we'll look at the sales table itself and how to make the most of the opportunity to sell your wares.
Part 2
Last time we looked at the issues involving sales of recordings "off the stage," or more accurately, off the table in the back of the hall. We considered the negotiations between the artist and the presenter concerning percentages and so on. This time, let's pay attention to the sales at the gig itself.
One of the first things I do when I arrive at a new gig is scout the location for the sales table. Sometimes the venue has a regular spot for this - sometimes not. If the issue is up in the air, I try to find a place that is in an accessible part of the building, where passersby can see my wares, yet will not become a bottle neck if more than two or three people are looking over the CDs. If the presenter is providing staff to handle sales it might be well to put the sales table next to the ticket taker, or near the refreshments or somewhere else where patrons might congregate during the break or after the show. If you need to work the table alone personally, you might choose a location nearer the stage, where you can keep an eye on the merchandise while you perform - and keep an eye on your stage gear while you sell. The perfect solution is to have your own trusted employee handle sales. But that is prohibitively expensive for many of us. Sometimes a band member, spouse, or loyal friend will do the job. But for those of us who travel the circuit alone, the responsibility for security rests squarely upon our shoulders.
If a staffer is there to sell for you, it is of prime importance to meet with that person and establish a few facts. First you must agree on beginning inventory. Sometimes an inexperienced volunteer won't have a clue about this, so it's up to you to insist - count in the merchandise. That goes double - make that triple - if there is someone else's product sold at the same table from a common till. You may or may not prefer to have a title-by-title count, but at least you should put down in writing how many CDs, how many tapes, etc., are there on the premises before the sales begin. Then agree on the price per unit. If you are providing start-up cash, write that figure down. The second half of this equation is to do the count again at the end of the night. Having that beginning inventory and startup cash written down is imperative, because you might find yourself dealing with a different volunteer when cashing out at the end of the night. Of course the whole point of this exercise is to check the sales receipts against the reduction in inventory. Let's hope they come out even.
I always try to have a title-by-title count on a spreadsheet before I leave home, and at the end of the tour I will enter my remainders. The spreadsheet will tally my sales by title. I find that this chore is best done by me for my own purposes of bookkeeping, so I don't ask it of the sellers. All I really need from the sales person at the gig is to make sure each CD that leaves the room is paid for. If there is a discrepancy (usually a shortage) at the end of the night, you should be prepared to either eat the loss or stand up for your rights and demand the shortage be paid. This is where having the details negotiated in advance is so crucial. Know whether the presenter is to be held accountable or not before you entrust your wares. You must use some common sense and perspective as well. If you've sold 100 CDs in ten minutes and find you are down $15, you might just want to chalk up the loss to "shrinkage," and count yourself lucky to have had brisk sales. On the other hand if you've "sold" three CDs and ten have "walked off," then there might be some explaining to do.
It is in your best interest to have a tidy and attractive display of your recordings. Rummaging through a cardboard box is not the best way to have your customer explore your CDs. Make it easy for your customer to choose a recording. If the print on your CDs is very small, consider a larger printout display of the song titles for each CD. Or provide a magnifying glass - or even a reading lamp. Good lighting is important to making out fine print as well as making correct change! I like to provide a stack of flyers nearby, offering mail order sales as an option. There may be a potential customer short on cash at the moment - or a fan who will want to order a second CD after he or she has heard the first. Have a supply of business cards with you. Keep some pens handy for autographs or check writing. I try to keep my mailing list on or near the sales table - people who buy your stuff are precisely the people you will want to contact again. For this same reason, I allow personal checks to be made out to me. This relieves the club from a banking headache and gives me the addresses of my customers. (It says something about the integrity of the average folk fan that I have never had a bounced check on a CD sale.)
It has become the norm at folk concerts (in the US) to charge $15 for CDs and $10 for tapes. It is curious that the prime economic factor in this pricing structure is not the law of supply and demand, nor the cost of goods sold, but simply the fact that making change is a hassle. If you want to be nice and charge, say, $13 for a CD - or if you are offering a super package for $17 - you must be ready with a huge roll of one-dollar bills. Even so you will get hateful glares from the poor souls who will be making change. I don't see a good solution on the horizon for this simple fact of life until either the currency introduces new denominations, or inflation raises or lowers the value of a recording to the next $5 plateau.
This brings us to the sticky issue of SALES TAX. (US rules only in this paragraph! In Canada, taxes are very different!) I know a lot of working folkies who sell their wares with no thought of collecting sales tax. Some may be libertarian tax rebels, some may be simple scofflaws, and some may just be casual to the point of laziness. If this is you, be aware that you skate on thin ice. The federal government doesn't do it yet, but almost every state in the US levies sales tax. And it is the seller's responsibility to collect it and turn it over to the state. If you are selling CDs in the state in which you reside, and you are not collecting sales tax, your own state government could make life miserable for you if you are caught. (If you are outside your own state when you make your sale, you may be just as culpable within that other state, but might be less likely caught and punished once you cross the border home.) Let me be clear. I am not a lawyer. THIS IS NOT LEGAL ADVICE. But it is common sense that the one state government you should square up with first is your own. Don't rely on the folk club to collect your tax - this is where they will likely wash their hands and close up shop if you put the onus on them.
If you do decide to collect tax, learn the rules for your particular state. Filing policies and licenses vary. Rest assured there is a bureaucrat waiting to assist you. Be aware of the option of selling with "tax included." Say your state's sales tax is 6%. Selling with tax included means you can be paid a total of $15 for a CD, as is the norm, but for accounting purposes, you count the sale as $14.15 plus 85 cents (6%) for tax. If, instead, you wanted to sell the "tax added" way (like they do downtown) you could charge your $15 and then add 90 cents (6% of 15) to the fee to your customer. Often the convenience of making change sways the choice. Whatever you do, don't charge the $15, and then pay the full 90 cents out of your own pocket to the state. Count it as a "tax included" sale and save the nickel. At the end of the year, those nickels add up! And remember that our "real" price of $14.15 is the one that any commission should be figured from. If the venue wants 15% of your sales, pay them 15% of sales price, but not the sales tax too.
Of course, all this begs the question of bookkeeping. If making music is an art that some of us have made our business, the selling of CDs is a business pure and simple. You need to keep track of inventory, vendors, customers, sales etc. Not only to satisfy the taxman, but to help you plan your next move, you need to keep track of those numbers! How are tape sales compared to CDs this year? How is the second album selling compared to the first? How many did you sell at that club last time you played there? Only your books can answer these questions. A number of software programs are out there to help you. An over-the-counter computer program like the ubiquitous Quicken makes juggling figures a snap. A basic spreadsheet program can do a lot of chores. Old-fashioned ledger books still work, too. Get some help if you need it to set up your system, but don't let the task of tallying numbers slide. Don't sell yourself short!
Lastly, communicate with your audience. Find your own good-humored way of calling their attention to the sales table and your newest release. But be mindful that no one likes a hard sell. Don't come off like a carnival vendor. Even if the evening's sales are economically vital to you, you must remember that the listeners are there to be entertained, not "sold." Keep your ears open to your customers. Listen to their comments as they peruse your offerings. How will your next project be better conceived, better executed, and better packaged? Your customers will guide you if you pay attention.
Joel
Mabus is a
singer-songwriter, but he doesn't sound like one. His roots are in
American old-time music, yet his music speaks to the times we live
in. "He knows his way around the English language and
American culture just as well as he knows his way around a
fretboard," wrote one critic. A maverick in the folk world,
Mabus defies any easy pigeon-hole. His palette ranges from
mountain banjo to jazz guitar -- from sensitive introspection to wicked
satire. Yet from coast to coast, he has brought audiences to their
feet -- newly won friends asking for more.
That's not an uncommon response to Joel's music. As one fan told him -- "It's music from the heart that hits you right between the eyes." The prestigious Vancouver Folk Festival wrote of Joel -- "He has perfected the art of being entertaining without pandering, he teaches without lecturing, and does it all with great style."
