Let's get back to some agenting stuff! I received the following e-mail in my inbox this week, and with the permission of the author, I am going to quote an edited version of it, as well as my answer.
I have a brief inquiry of genre--I have been working on a collection of somewhat strange and dark-natured short stories for the past couple years, though until now, I have not considered having them published as a book. I understand the L. Perkins Agency takes on horror/dark literature, but was unsure of a book of short stories. Would the agency take someone on as a client, with only a short story collection? Thank you for your time, and I hope to hear from you soon.
My answer was the following:
This is a somewhat hard question to answer. From a purely business standpoint, short story collections do horribly in today's marketplace. The advances for them are usually quite low, and they don't do very well in terms of sales. There are some exceptions to this rule. If you're a big name author like Neil Gaiman, your stuff will sell (HarperCollins is doing a 150,000 first printing of his next collection, FRAGILE THINGS). Or if you're doing purely literary fiction, you can sometimes get a collection to sell. And then again, there's Kelly Link, who defies all the expectations of anyone in the business.
While you're welcome to send short story collections to agents, most of them won't take you on as a client with one of them, especially if none of the stories have been published befoe. One thing that you should definitely try to do is to sell the stories to speculative fiction magazines individually. The magazines will usually buy the first publication rights, but as long as you hang on to the reprint rights, you can later release them as a collection. Now that collection might only be with a small press, but having the stories published first can build up name recognition and essentially get you an audience.
To further elaborate on my answer, if you're writing speculative fiction short stories, you should definitely be doing it with an eye towards selling them to magazines. Short stories have always been and will hopefully always be the lifeblood of SF. Not only do they get you name recognition, particularly from online publications, but they help you hone your craft. Yet, there seems to be a persistent trend that short stories aren't read as often anymore; just look at the Hugo nomination results, where you only needed 14 votes to get on the ballot for the short story category.
So what should someone do?
I advocate that people should keep writing SF short stories, as I love them. I think that they take true skill, and that they're a necessary part of learning to write, in one form or another. But only time will tell us if they'll continue to be a regular part of the genre.
In other genres, such as romance, the short story seems to have died out completely. Now I'll admit freely that I'm not as knowledgable about romance short fiction, but I don't know of any magazines that regularly print it anymore. Some of my favorite short stories are old ones of Rosamunde Pilcher's, which were printed many, many years ago in places like Good Housekeeping. There is a current trend towards printing novella collections in romance, but oftentimes those are purely promotional tools for the companies involved. It allows them to showcase their current authors, and to keep them fresh in the public's mind, while they're between novels.