Folk Alliance Newsletter
by Joel Mabus
written February 1999
THE SALES TABLE, 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.
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