Someone wants to 'shop your tape'

You just get off the stage and you feel like you have given the best performance of your life when you are suddenly approached by a stranger wanting to ‘shop your tape’.  First question you might have is “What?” and then the second question you might have is “What is ‘shop your tape’?”  First ‘shop your tape’ is an old term that goes back to the 70’s and 80’s where a person would take a copy of your music, back then it was on a cassette tape, and try to get you a record deal.  People who shop ‘tapes’, DVD’s or mp3’s in today’s world, claim to have some contacts within the music business that may be able to land you a record deal.  Musician’s used to be wooed by this strategy thinking that they might finally have an in, into the music business.  But more often than not, these are deals that are usually too good to be true.
Scammers have a tendency to prey on the uninformed and if you don’t understand the business then you are prime bait.  Besides shopping a tape is speculative in that it is a gamble. No one can guarantee they can get you signed. There are however indications of a scammer looking just to con money off of you and your band. If someone wants money up front, there is probably something fishy about them. You can agree to pay minimal expenses such as providing promotional material copies of your music but don't ever pay someone's expenses to fly to NY or LA to shop your tape. More than likely you are just giving them a free trip.
A true shopping deal will pay the person shopping your tape out of future royalties from the deal they secure for you. If someone shops your tape and gets a record label to sign you, they will want a percentage of the income from the record deal. This is standard. What varies is the percentage. Some people are scrupulous and take only what is fair. Others over-reach and rip bands off.
What is fair compensation for someone who shops your tape? Fair compensation is 10%. It is not unfair to take 25% but should be done with great caution.   It is not unheard of for people to ask for 50% but highly unfair.  As such these points should be agreed upon before a deal with a record company is ever made and get the agreement in writing before they begin shopping.  If a person shopping your tape wants 50% of the profits you can say no thank you and nobody’s time is wasted.  Another option is to offer them a point or two on the record contract. A point is a percentage point. Usually a band will get between 10-15% of the price of the album. Offer the person shopping your tape one to three points. Three points on a 15% royalty rate is 20%.  The bottom line is that people who shop your tape are entitled to get a percentage, but don’t let them take too much.
Also make sure that any shopping deal made is non-exclusive. Do not allow someone to have exclusive rights. In an exclusive arrangement, if someone from Sony Records happened to be at your show and signed you, the person shopping your tape may be entitled to his cut, even though they had no part in the deal! With non-exclusive rights, anyone can shop your tape. Why limit yourself to allowing only one person to shop your material when more people increase the likelihood of getting signed.
Although getting someone to shop your tape can be advantageous it can also prevent a deal from being signed as well.  There are so many avenues now in marketing your product such as the internet.  If you can show a strong fan base and how many bought and sold downloads of your music or attendance to your shows you may not need a person to shop your tape at all.

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