When I was a performer, managing the consignment of records/CDs was a thankless chore. The longer the band stayed together, the less motivated I was to keep stores stocked and collect income. Best-case scenario: I’d burn an hour (plus gas) to collect $10. As titles aged, even those meager returns were rare. On the plus side, our local record stores offer great terms for hard working artists – their doors are open to all kinds of music, they let you set your own price, and take a miniscule cut in exchange. While these stores are doing you a solid by carrying your product and handing over most of the profits, they’re unlikely to stay on top of inventory for you. And if your title isn’t carried by a physical distributor they have no easy way to reorder, if they wanted to. So as The All Night Party enters it’s second year, we’re wondering if there’s a better solution to stocking local retailer’s with consignment products.
We’ve been stressing over national physical distribution since day one – there are plenty of distros out there who would love to carry our catalog, but frankly the traditional retail terms demanded are a poison pill (ask Touch and Go). Only in the music business do retailers operate with “borrowed” stock. Only music distros get away with returning previously sold inventory for full credit, months after the original sales are booked and closed. It’s an inventory nightmare that’s saddled the industry with unsustainable costs. While avoiding this money pit, we’ve worked the problem for on-label artists. Talking to our bands and local retailers has given us a some fresh ideas we’d like to discuss here with the scene…
I’ve noticed it’s far more productive to stock retailers when you’re carrying many releases, than it is for individual bands. When I show up to service at least 3 recent titles, I generally leave the store with a few bucks from completed sales, which in turn need to be restocked to keep it going. Retail, like licensing and booking, is about persistence and effort. Your music’s got to be wherever and whenever the fan’s in the store or you lose the sale (often for good). There’s a need for regional distro, and a means to pay for it if you can carry some critical mass of titles.
I discovered how important a band’s activity and visibility are. A popular local band that plays regularly can often sell titles to local retailers for cash, while a part time band of weekend warriors must consign inventory on spec. As noted, this isn’t necessarily a bad thing, at least in Cincinnati. A CD that wholesales for $6 retails for $10. If you only pay $1 to the store for consigning your title, you stand to make $9 for waiting to collect. Obviously $6 in hand beats $9 in your imagination. But if you’re working hard and visible, there’s some reward for waiting.
This brings up what might be the key to a good solution. Wholesale prices drive the system we call capitalism. Manufacturers leave roughly half of their potential profits on the table to incentivize consumer-facing partners to pimp their wares. By selling to all qualified buyers, competition controls prices for consumers. The music business, like all capitalist enterprises, has wholesale price structures. Unfortunately these structures are opaque and bespoke. Shake It might pay a different price than Best Buy for the same title. South American distros sell the same titles at different prices than Euro or US distros. What you pay has less to do with market forces than who you know and how you know them. The good news: Participation in this funky kind of distribution isn’t compulsory. Like ANP, you can do something different. Set a single fixed wholesale price, between 50-60% of the retail price you expect your fans will pay for the set, and use it as an incentive. Kick it old school, Capitalism 1.0.
From a set wholesale price, many doors open, starting with ANP’s. We’re here to help you sell music in all it’s forms. So let’s talk… Would you be interested in a regional consignment program with a single contact for pickups, drop-offs and collection? Would you be willing to redefine pricing to incentivize more sales, and open the door to more conventional retail terms? Could we buy CDs from you outright at these new wholesale prices, and act as a regional distro to make sure your work is always available at local stores? If these steps seem reasonable, ANP can provide solutions.
These are a few of our ideas for fixing some problems we’ve seen. We’d love to hear yours, and get some feedback in comments!
-d-
