Our thoughts on the idea of publishers requiring authors to buy books in quantity.
Number six and seven in our “Top TEN questions you should ask a publisher before signing” series, we are talking about publishers requiring authors to buy books they’ve authored in quantities that may not make sense.
Some online and hybrid publishers will put in their publishing agreement that the author is required to purchase a certain amount of books up front and that quantity can be high—anywhere between 250 up to 1,000 units—and suddenly authors are stuck with excess inventory and no means of selling them all. I do not advise authors to agree to those terms; they should be free to order however many copies are desired at the time, and order as often or as little as needed.
Prior to committing to a publisher, authors should also find out how much it would cost to purchase their own books, and ask if there is a volume discount granted for higher quantity purchases. Much like the traditional publishing space, indie publishers will sell authors their books with a certain percentage off the retail price. Although authors will not purchase their books at cost, they will enjoy purchasing at a wholesale rate and can earn a sizable profit when they sell their own books and retain all proceeds.
It would be wise to consult an accountant on the state tax implications when selling their books on their own. As of this writing, the Massachusetts state tax rate is 6.25% and authors are required to collect that if selling to another Massachusetts resident. Every state is different and internet sales across state lines can get a little complex, so my recommendation is to find out the tax responsibility prior to creating an e-Commerce website and organizing other book selling events.
I don’t support the idea of publishers requiring authors to buy books, and I ensure this is not included in SDP’s publishing agreement. You will want to make sure you address this when interviewing publishers and decide what works best for you in determining who you choose.