Money Monday: Self-Publishing? Consider Consignment Sales

Hatch Editorial Services Money Mondays

It’s every author’s dream: to see their book on the shelves at Barnes & Noble or their local indie shop.

Though traditional publishers coordinate bookstore distribution for their authors, it is up to indie authors to do this grunt work for themselves.

If that thought makes you dig in your heels and procrastinate, consider this:

There's more to bookstore representation than your fifteen seconds of fame. 
If you're an indie author, selling books on consignment to a bookstore can greatly reduce tax burden.

How Consignment Sales Work

U.S. sales tax can be complicated. To touch just the tip of the iceberg, some states have it, some states don’t, and, at the very least, vendors are responsible for the sales tax on any direct sales they make to customers located in a state where they have a presence.

(If that long and rambling sentence made your blood pressure spike, don’t worry. I’ll follow up next week with an exploration of indie authors’ sales tax burden.)

The good news is, in most cases, a vendor is only responsible for sales tax at the point of purchase, i.e., where the sold goods change hands from the seller to the buyer (source).

In this case, your prospective reader purchases your book from a store, not from you directly, so the bookstore is responsible for reporting and paying sales tax to any state and local departments of revenue.

In return for shouldering your tax burden, a bookstore will likely have a consignment agreement on hand. This agreement typically states that you will sell your product to the store at a wholesale price, and they will turn around and sell it at a retail price that allows them a cut of the money.

To learn more about consignment sales, I direct my indie authors to Authority Publishing’s helpful resource article here

How to Approach a Consignment Sale

The following are four tips for how to approach a consignment sale smoothly, professionally, and with respect for your counterpart: the bookstore.

Do your research.

Before you approach a bookstore, check their website to see if their policy on consignment is listed. Some may restrict indie representation to local authors or to authors with an established sales record.

Be polite and to the point.

When you reach the store on the phone or in person, explain that you are a local indie author and would like to speak to the store manager regarding consignment sales. Have a sense of what books they already sell. It may not make sense to approach a used science fiction bookstore if you're a first-time biographer of naval history.

Remember that this is a business negotiation.

It is a great and wonderful thing that you wrote a book, but it is a bookstore owner’s prerogative to decide whether she will sell your book in her store. She may even accept now, but then decline to order more quantities if the initial order sells poorly.

Be a good literary citizen.

Whether you score a consignment deal or not, patronize your local bookstore. Show them that you’re interested in them more than just as a source of money.

Do these things, and regardless of the outcome, you can say that you gave it the old college try. 

Are you an author with dedicated consignment sales? I'd love to hear from you! Share your thoughts in the comments section below.


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Jessica Hatch is not a Registered Investment Advisor, Broker/Dealer, Financial Analyst, Financial Bank, Securities Broker or Financial Planner. The information in this blog post is provided for informational purposes only. It is not intended to be and does not constitute financial advice, is general in nature and not specific to you. Ms. Hatch is not responsible for any investment decisions made by you. You are responsible for your own investment research and investment decisions.