Online services versus doing it yourself

leavings

leavings

Member
Hey everyone, as I'm preparing for the release of my album, I've been trying to decide how I'm going to fulfill orders. I was considering using an online service, but I've been looking into alternatives and I thought I would let you know what I figured out.

I found that the online services take a pretty large amount out of every cd you sell through them. For example, cdbaby.com takes $4 per disc, and cdstreet.com takes 25%. Both services also charge a setup fee, which I found was fairly standard among others in the business. Most of them also charge a high shipping fee to the buyer, which, while it doesn't take away from your profits, makes the price much less attractive to your fans. My goal was to find a method that would save me at least a buck per disc, and hopefully avoid overcharging the buyer for shipping. I found that the cost of shipping cd's on my own is far below the cost of using a fulfillment company, even taking into consideration the time committment.

I looked around and found cardboard jewel case cd mailers (you probably know what I mean) available regularly online for about 18 cents each in bulk (500 of them for under 90 dollars including shipping). There are also bubble mailers that are about 1 or 2 cents more, and are probably worth the extra money since they're self-sealing. One CD in a box or bubble mailer weighs under 5 ounces, which would cost $1.29 to send first class.

The other thing you would need is a paypal link on your site. Of course, this is assuming you already have a website. If you don't and you're at the stage where you're selling an album, then I strongly suggest you get one. Anyways, paypal charges 2.9% + 30 cents for each transaction on a standard business account. If you sell a high volume they give you a merchant account and the percentage varies between 0.7% and 2.9%, dependent on your volume. So, suppose you sell your cd for $15, the worst you could do is owe them 30 cents plus the 2.9% on $15 which is about 45 cents, so a total of 75 cents.

So, what does it all add up to...
$0.2 for bubble mailer
$1.29 for postage
$0.75 for paypal services
= $2.24

This saves you about $1.50-$2 per disc. I know from experience that it takes about a minute and a half to package and address a cd. So, suppose you're selling about 5 a day, or 35 a week. If you shipped once a week, it would take you an hour to package them and however long it takes you to go to the post office, which for me is about half an hour. I'm pretty sure you can apply postage directly to these, put them in your mailbox, and cut out the trip to the post office, but I personally like to see them put in someone's hand. All told, you end up making back about $40 an hour for the extra time you put in.

You could also charge your buyers an honest shipping price to meet your cost, and save another $1.29, bringing the total cost down to under $1. Most people will see that shipping charge is insignificant and very fair compared to what's usually paid.

Naturally, there is a lot more to consider. If you're a high volume seller, then maybe the extra money spent is worth it. Also there's the possibility of failed delivery, which is (sometimes) conveniently taken care of by a fulfillment company. The list goes on, but what I've presented is a reasonably accurate estimate of what kind of investment you can make in taking care of business on your own.

I hope this is helpful to some of you out there, and let me know if you have any further thoughts.

Peace out from Delft,
Peter
 
Well done for all your research and sharing it with us. Interesting.

Like you said, if the expectation is that you are going to sell lots (and I would say 5 a day as you indicated is a LOT), then go for it.

However, I would imagine that for most independent artists, the type on here who are producing theoir own product at home on a shoestring then selling high volumes is just a pipe dream, so they may as well cut the hassle and use CD Baby etc. I guess you have to ask yourself how much hassle do you want to go through in order to save a couple of dollars? At 5 units a day its $10 or $70 a week so worth doing. At 5 units a month, maybe not so attractive an option?

Just my 2 cents.
 
tjohnston said:
What about nowhereradio.com .I though I read something about them handling that stuff.
Click to expand...

They look absoltely perfect... but it seems dodgy that the news hasn't been updated for a year.
 
g2sb,
i'm guessing you're not a member. not only does waldo (the person whose brainchild is nowhereradio) come by here, but i got an email from him not more than 2 weeks ago on changes/etc. he's a busy man, but i trust him as a professional who is really trying to help out the little guy.

leavings, looks you're calculating based on a $15 price. independant musicians shouldn't expect to sell cds for that kind of price. in fact, i don't think anyone should. however, your logic still stands.
 
very good thinking ,leavings.

The problem I see with sources like CDbaby is that they dont market a CD. They simply make them available online.

Without marketing, a CD cannot move.

I think it will be far better to do it yourself.

Have you considered using VISA/MASTERCARD rather than paypal. Setting up a visa card account will charge you a slightly lower percentage than paypal, and they are more trust worthy than paypal.

Also, you can get 1000 CDs nowadays for about $1500, including 4 pages of full color graphics and shrinkwrap. That comes to $1.5 per disc and looks more professional, and takes less of your time
 
zer0sig said:
g2sb,
i'm guessing you're not a member. not only does waldo (the person whose brainchild is nowhereradio) come by here, but i got an email from him not more than 2 weeks ago on changes/etc. he's a busy man, but i trust him as a professional who is really trying to help out the little guy.
Click to expand...

Yes I have been on the sites forums and spoke to Waldo myself. Great site, great services... I really can reccomend it.
 
CJ, I was analyzing this process looking only at fulfillment costs, not the cost of cd manufacturing and design. I was presupposing that one would have already purchased the merchandise, and just needed a way to sell it, in which case you are absolutely right, those costs are readily available. Some of the online services (like MP3.com and others) will make an album for you, but you're right that it doesn't look professional and if you're really want your album to stand out that certainly isn't the way to go. I'll look into the visa/mastercard bit. Thanks for the suggestion.

Zero, I initially undertook this little study because of a discussion I had been having with another independent musician friend, whom I spent the summer touring with. I think independent musicians shouldn't be afraid to set the price of their music close to industry standard, especially if they are producing professional quality material. My friend sells her cd's for $15 on cdbaby, which is why I chose that number. I'm probably going to go a little lower, but in either case you still save a significant amount of money (the math is easy to manipulate for different retail prices).

As for whether or not one SHOULD charge that much for a cd...I'm a bit ambivalent. I think you shouldn't try and charge more for a cd than you would be willing to pay.

Anyways, thanks for the replies!
 
leavings said:
CJ,
I think you shouldn't try and charge more for a cd than you would be willing to pay.

Anyways, thanks for the replies!
Click to expand...

Well I'd be willing to pay $50 for MY CD, because I like it. But somehow I don't think anyone else would!

Seriously, I think for an independent production (good quality pressing and printing presupposed) then you should be looking to charge soemthing a bit less than the majors would. Don't give it away, but don't expect people to take a chance on an unknown artist without giving them a little extra incentive of lower price than they are used to paying, but don't make it too cheap so it looks like its a worthless item. People tend not to value anything they get for free (and they're usualy wrong), whereas they are happy as larry to pay a high price for something because it has a certain name on it!!
 
glynb, what I meant was that you shouldn't try and charge more for a cd than you would be willing to pay in general. For example, if an album I want costs 20 bucks, I'm just not going to pay that much. I'll wait until it's cheaper or I'll burn it off of a friend. If it costs 10 then I'll probably buy it, and somewhere within that range is where I think most consumers fit.

All that aside, the luxury of being an independent artist is that you can change your price whenever you want! So see what works for you...
 
glynb, what I meant was that you shouldn't try and charge more for a cd than you would be willing to pay in general. For example, if an album I want costs 20 bucks, I'm just not going to pay that much. I'll wait until it's cheaper or I'll burn it off of a friend. If it costs 10 then I'll probably buy it, and somewhere within that range is where I think most consumers fit.

All that aside, the luxury of being an independent artist is that you can change your price whenever you want! So see what works for you...
 
This is a great subject.
Do you sell using Paypal, where noone else knows about your sales - and make more, or potentially sell more through CD Baby who gets tens of thousands of surfers per month?
I'm assuming if you make some noise at CDBaby, your CD will be featured and recommended to more of that high volume traffic.
I've bought CDs from CDBaby and because Derek is cool as s$#t I would continue to buy other CDs from there.
It's all about making people find your music from all angles on the internet.
CDBaby is making a ton of noise, so...I'll be selling there.
CDStreet is a little more...cold and unresponsive:-)


http://www.mountainmirrors.com
 
Indies can't afford to be choosy!

Mountainmirrors said:

It's all about making people find your music from all angles on the internet.
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Exactly. As an independent musician trying to do it all yourself you HAVE to take ALL opportunities that are out there. Every outlet, every online reviewer, every free chance of promotion, every offer of a link, it will all drive traffic to your site (assuming you have one, and you SHOULD).

Every email you send out should have a signature including your site address, join loads of discussion groups and include your URL in the sig, just use EVERY opportunity, without getting up people's noses of course which is counter productive.

If CD Baby and others offer a free chance for eyeballs and do not expect an exclusive relationaship then take it, and do the same with the others, its not 'either or'.
 
My advice is to get CD Baby to do it. You could do it on your own and save a couple of bucks, but your time is worth something. Also consider that people are more likely to trust an established company like CD Baby than they would you.

If you want to do it on your own though, I have some great options at www.indie411.com that will allow you to get going in a matter of minutes.

----------
Film/TV Music Licensing
www.krtipsheet.com
 
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