Hi Leon, I reached out to the National Market Traders Federation for you. Here’s what they said:
By charging a set fee, the organiser is guaranteed a certain amount of income from the traders. As a first time organiser this may be the best way to charge. Food businesses are generally charged slightly more due to service charges, waste removal etc.
Charging a percentage of the profits is usually better suited for food vendors, as a rule of thumb they are more likely to sell their goods then and there - craft traders may get interest for future sales but may not sell as much on the days. It depends on the event.
A percentage of the profits can work well - if traders have an idea of the footfall and how many other businesses may be there selling the same or similar goods the more established businesses will generally know how much stock they will need to cover the event. An organiser could work out a predicted income based on their menu and how much they charge.
The issue here is the businesses providing accurate accounts. Most will, however if what an organiser receives is significantly different from the expectation then questions may be raised.
The answer to this really comes down to what suits the organiser best - what resources do they have to manage the trade part of the event i.e. do they have an individual who will manage this and will have the time to do so.
Whichever route is taken, it is important that communication is clear between the businesses and the organiser and the final agreement is done in writing, any special agreements should also be noted.