What are sales channels?

Sales channels are categories in Consonance for reporting sales details in the manner you have agreed with distributors, sales agents and authors, by geographical area, for various product types. Sales channels are used in two ways: royalty calculations and setting profit and loss defaults.

For each financial agreement in your contracts, you need a “channel”. E.g. paperback, ebook, subright, export, gratis. Each channel has a name and a royalty rate.

Each channel belongs to a masterchannel which has a name and a cluster of channels, that reflect your business reporting structure. See below for examples.

Relevance to royalty calculations

Consonance calculates royalties at either the masterchannel, the channel or the product default level, and royalty specifiers can be set at any or all of those levels. Channels and masterchannels can be used for aggregating unit escalators or sale value escalators.

Royalty statements are broken down per product, per channel. For example, if you have Home UK as a masterchannel, and Bookstore and Online channels, the statement recipient will see the all the channel sales broken out into rows as Bookstore and Online.

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Channel structure must also take into account escalators, because escalators are applied at channel or masterchannel level.

Relevance to forecasting

Forecast sales estimates require a product, its sales channel, and the forecast quantity. In parallel with the sales profiles, Consonance can use the default discount and default currency on the sales channel to build up a detailed monthly volume and value forecast. Read more about setting profit and loss defaults.

Sales data must be able to be produced at the level of detail matching your channels.

What are masterchannels?

Each channel belongs to a masterchannel. For example, the masterchannel ‘All UK’ might contain channels: ‘UK Home’, ‘UK Trade’, ‘UK Concessions’ and ‘UK Gratis’. This hierarchy matters because of different royalty rates for different channels.

How to decide what sales channels to set up: consider your sales reports.

A data source needs to exist for your sales channels. Consonance calculates royalties at channel level, but only if you import your sales tagged up with the channel that they belong to. This means if you create a channel called ‘US Sales’, you need to be sure that you want to report royalties for ‘US sales’, and that you are able to import sales from ‘US sales’. If you want to be able to calculate royalties at a lower level, for instance ‘US Concessions’, ‘US Trade Shows’, ‘US Author Gratis’, then firstly create those channels, but also make sure you’ll be able to import sales tagged up accordingly in the future.

Masterchannel and channel set up example

Masterchannels:

  • All UK
  • All Export
  • Subrights

Channels:

  • All UK => UK Home, UK Trade, UK Concessions and UK Gratis
  • All Export => Export North America, Export Rest of World
  • Subrights => Rights North America, Rights European, Rights Rest of World

or

  • General sales => Hardback, Paperback, Ebook, Audio
  • Subrights => Licensed audio, US, Europe, Rest of world
  • Gratis => Gratis

or * Physical => Hardback, Paperback, Audio physical * Digital => Ebook, Audiobook download

or * Home => Hardback, Paperback, Audio, Ebook * Export => Hardback, Paperback, Audio, Ebook

How channels work with royalty specifiers

A royalty specifier is something like 7.5% of net receipts. Read up on them here. If no royalty specifier is present for a sales channel, then the specifier for the parent master channel is used. If there is no specifier present for a master channel, then the specifier for the product is used. It is also possible for a specifier to inherit particular attributes from a parent, so we can modify the royalties for a particular channel in respect of, say, the base rate, while also using the same date escalator steps as defined for the product.

Forecasting

Consonance assigns sales to a channel, which are themselves assigned to a masterchannel. A masterchannel might be called ‘eBooks’, and it might have multiple channels assigned to it, named ‘Direct eBook sales’ (sales through your own website, if that’s something that you do), ‘Vearsa’ (sales through Vearsa), and ‘Amazon Kindle’ (…).

How to determine your channel structure

  • Gather a list of all possible contractual rates (not the numbers, but the categories: hardback rate, paperback rate, subrights rates, etc).
  • Gather a list of which types of escalators apply to which products
  • Consider your current, internal top level sales reporting structures, to influence your masterchannels
  • Consider your available sales data

Once you have all the information requirements, work with us to solidify your channel structure.

Create a sales masterchannel

Go to Settings > Configuration > Masterchannels to add a new masterchannel, and click the Add button. Fill in the name and code of the masterchannel. Codes are required for bulk importing sales.

Create a sales channel

Go to Settings > Configuration > Channels to add a new channel, and click the Add button. Select the masterchannel. Then, fill in the name and code of the channel. Codes are required for bulk importing sales.

Delete a sales channel

Go to Settings > Configuration > Channels and click Delete in the last column for the channel you want to delete.

You may get a notification that you Cannot delete record because dependent estimates exist.

Whenever you see the P&L page for a work, an empty estimate record is created for you to fill in. You see those empty estimates when you click on the plus button next to sales estimates and you are given a grid of all your sales channels, and all your products. You don’t delete these system-generated sales channels if you have set up these estimates, even if they are zero. Get around this by going to the list of all your estimates. Go to Estimates. Delete all the zero-value estimates there. Once you’ve done that, go back to the sales channel page and delete the one you don’t want.