Distribution is a huge part of the success for any writer and a special challenge for Self-Published authors, simply because they have to do all of the work on their own. Distribution of books is a big deal because if you have no way of getting them before the public, you have no way of selling them. So, one way for an author without a distribution contract to sell books is to sell them through consignment deals with independent bookstores. Independent booksellers can be found right down the block, or on the Internet.
Now, you’re not going to just hand over a case of books to a stranger and hope that you will make money – right? What you’re going to do is sit down and work out a consignment contract with the bookseller. When you do this, you become the consignee.
The way it generally works is that you (as the consignee) will complete a Consignment Agreement with the store (the consignor), usually for a twelve (12) month period. In the contract, you will agree to bring or ship a specific number of copies of your book to the bookseller and they will agree to sell them for you, in return for a percentage of your book’s cover price.
Once your books are in the store, they become a part of the store’s inventory, and may be placed on their shelves. Your book will also generally be included in their database and any online stores. Most stores will send you an inventory list describing the books, with their sale price. Many consignment stores make it a practice to review sold items for a quarterly update, and make consignee payments.
Consignment Agreements are good only if both parties agree to enforceable terms. The Agreement should specify obligations and rights of both the author and the bookseller equally. Items that should be covered in contracts are:
- Descriptions of consignments noting each item’s condition (to avoid claims later).
- Specific duration of the Consignment Agreement, setting beginning and end dates, and providing stipulations for any extensions.
- Agreement should specify the retail selling price, and set forth author payment, and store payment.
- How will often will consignee payments be made? For most book consignments, payment is made quarterly, on the first or 15th of the month.
- Who pays shipping, handling, packing, insurance, and other costs, if any?
- Will a buyer’s fee apply (an amount to be deducted from sales proceeds prior to applying the store’s percentage)?
While you undoubtedly are hoping for a great experience – lots of sales and a reputable bookseller – remember that sometimes, “stuff” happens. When reading/writing your agreement, remember to take the “worst case” scenarios into consideration.
- Is the store liable for damage to books? Jurisdictions conform in various ways to provisions of the Uniform Commercial Code (UCC) – laws intended to protect sellers. In most states, the bookstore must pay for damages due to negligence but not for damages caused by ‘Acts of God’. Individual state provisions and legal interpretations are different.
- Who pays for promotional expenses?
- In bankruptcy, property may be seized by creditors. What happens if the store fails? Some states have consignment legislation preventing this but it still may be necessary to file a claim in bankruptcy court and produce a Consignment Agreement Form which clearly addresses this issue.
- To protect sellers, the store should post a sign stating that goods are consigned (not available at all locations).
- In the event of arbitration or litigation between consignor and consignee, who will pay attorneys? Will the loser pay the winner’s fees?
- Form UCC-1 should be filed in the county of the consignor who should stand ready to prove that creditors knew items were on consignment.
These and any other issues should be spelled out in written form in consignment agreements. Each party should have a copy signed by all participants.