Amazon Advantage … or Disadvantage?

I wanted to get the physical version of my debut CD, On the Level, on Amazon.com.    Being one of the top retailers so it seemed like a “must do” … so I signed up for Amazon Advantage (the service that allows you to do so.)    I am now questioning the financial logistics of it for an independent musician.  I am, in fact, contemplating cancelling my enrollment in Amazon Advantage after this term is up.

Here’s the lowdown:

$35 annual fee
50% of all sales

Unless you are think you are going to sell a huge amount of CDs through Amazon.com there is likely little point in having your physical CD on there.  Even if do feel you will sell a lot how much is it costing you to ship them to Amazon?  How much duty are you going to get charged on a big shipment if you are shipping from outside the U.S.?  These are other costs you have to take into consideration.

In my experience, they have only allowed me to ship 1 to 5 at a time; a number chosen at their discretion.  Their last few shipment orders were for 1, and I believe it cost me $2 to ship to them (because I cheaped out on the envelope and just used printer paper to wrap it.)   Once that “1” sells, then there is downtime in stocking it because I have to send them another copy and wait for them to receive then process that it is in stock.

If your CD is selling fast (and they take a big order) but then sales dwindle (as they tend to after the first year so) Amazon may feel they have too many in stock will charge you the shipping cost to send any extras back to you.

You also have to deal with re-sellers who somehow got a hold of your “new unopened CD” and sell it at a price that entices your fan to buy it through them.  Some of them even say in their description “Support the artist, buy their CD through us.”  I’m still trying to grasp how their selling my CD so I lose the order is supporting me.

I suspect these re-sellers are buying review copies or radio copies in bulk, then re-sealing them if they are open but in great condition.  I was trying to keep mindful of re-sellers selling my CD as new.  I made sure I took the plastic wrap off.  I made sure that whoever I sent my CD out to wanted it.   But, somehow re-sellers got “new” copies.

The only method I was able to come up with was to try to undercut the re-sellers by opening my own re-seller account to sell my own CD slightly below the re-seller listing.  I also offered a collectible version at the same low price which came autographed.

There is obviously some prestige in being able to say “You can buy my CD off Amazon.com”, and some advantage to your fan being able to bundle it with other items in order to get free shipping.   However, on my last sale I only made a little over $6.  Subtract from that the $2 it cost me to get it to them, plus the  cost of  manufacturing the CD and I am only looking at a net profit of $2 once I recoup the expenses of making the album ( a light I am still not quite seeing at the end of the tunnel.)

As an aside, I’m not saying it costs me $2 to make a CD … it costs a LOT to hire producers, session musicians, book studio time, to get it mixed and mastered, photo sessions, packaging design … not to mention money spent on promotion so you’ll know that the album exists.  The $2 is just the cost of manufacturing the end product.

If you have a fan base that is buying your physical CD in droves they will likely not mind using a more cost effective retailer or having it ship directly through you.  Who really sells a lot of the physical CD outside of live shows anymore, anyway?   The majority of my sales are digital.   Services like CDBaby.com they will list your MP3s with all Amazons for a low fee.  Tunecore will do it for a yearly fee.   The whole CDBaby vs. Tunecore is another debate.

___________

Jef Kearns is a musician who cares about you. Now go care about him and check out his music.

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2 Responses to Amazon Advantage … or Disadvantage?

  1. aaron says:

    it’s a rip off. get out fast. nowadays everybody is scavanging from musicians and the only poor one is the actual musician. one of the worst scenes in canada is toronto!. i have seen more live action and culture in a 3rd world country than here. by teh way the place on your t shirt is in tehran, iran , where did you get it?

    • soulfisticated says:

      Thanks for the comment, Aaron. The shirt is by a company in NYC called Nimany. I got it at a shop on Queen West here in Toronto at Niagra called Hush Von Osafo. It’s a great little store. He designs most of his stuff but has a small collection of clothes he imports. The link for the Tshirt company is http://www.nimany.com

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