Today I added my new album to CD Baby and Amazon, which puts my music pretty much everywhere it needs to be. I’ll discuss each of them in turn.
I’ve known Derek Sivers, the creator of CD Baby, for a dozen years now. I’ve always admired his outlook, creativity, and work ethic. Back when I released my second album in 1997, Derek processed the credit card orders from my site, taking $4 per sale. A year later, he launched CD Baby to expand that model to independent artists worldwide. Today, 255,504 artists sell their music at CD Baby. Recently, Derek sold CD Baby to Disc Makers so that he could pursue other ways to help musicians.
I can’t say enough good things about CD Baby. For $35, they sell your album in CD and mp3 formats on their site. More importantly, they’ll place your music on all the major download sites, including the #1 music retailer, iTunes. They take only a flat 9% from digital sales. There are other companies that will get your music on iTunes, like TuneCore, IODA, and SongCast, but I’m not switching. I’ve learned over the years that distributors come and go, and I don’t want my music or my money to be stuck in limbo.
Unless you sell a lot of CDs, you can probably skip the Amazon Advantage program, which has an annual fee of $29.95. If you set the price of your CD to $11.99, they only pay you $5.40. Adding insult to injury, unless you move a lot of product, their automated order system requests one unit at a time. It costs me about $2 to ship that unit, bringing my net take per CD down to $3.40. The new CD cost about $2.80 per unit to make, resulting in a whopping $0.60 profit, not factoring in the annual fee. That’s worse than the major labels pay their artists!
An alternate strategy is to set the price of the CD to something outrageous like $14.99, and also list it at a more reasonable price through Amazon Marketplace (the “Sell yours here” button), which pays a lot better. They take 15% plus $1.79 per unit, but credit you $2.98 to cover shipping. So an $11.99 listing ends up paying $8.39 plus the shipping credit. That way the CD will still come up in a search, but savvy shoppers will buy it new through the Marketplace listing. The downside for the buyer is that they can’t get free Super Saver shipping through Marketplace, which might be a deterrent if they’re buying other items that qualify.
Speaking of Amazon Marketplace, I’ve got a lot of competition. CD Baby has an opt-in distribution program that allows distributors to buy CDs at a discount. It seems a handful of distributors are in the habit of buying my albums for cheap and undercutting me on Marketplace. If you give out a lot of promos, you’ll see them there too. Obviously, you can’t help it if people want to sell their used copies at bargain basement prices. This time around I don’t plan to service radio or press at all, and I’m not offering a discount to distributors, so I should have a corner on the market.
Even if you don’t deal directly with Amazon, you’ll still have a presence there through CD Baby. They’ll place your album for sale as a digital download for $8.99. That’s probably good enough for most independent artists.