Selling Albums Online

By David A. Barber
Author of Gigging, Everything You Need to Know About Playing Gigs (Except How to Play Your Axe)

For musical artists there are 3 basic ways to sell your CDs online.

(Note: this article does not directly address selling downloads)

1. Get your own credit card merchant account and sell directly. This is expensive and requires an online shopping cart, usually custom. You’ll have to fulfill the orders yourself, too (shipping, packing, etc.). Credit card companies and banks charge a monthly fee and various per transaction fees, as well as substantial set up fees, all of which are negotiable and vary all over the place. If you aren’t selling hundreds of CDs each month, it’s probably not worth the cost and effort.
Some hidden advantages to this, are that you can also get the equipment to handle credit card transactions at your gigs and you can use that to sell your other merchandise as well.

2. Go through a distributor who will distribute to online sales outlets like CDNow.com and many others. They will also offer your CDs for sale on their own website. You can link directly to the distributor’s online store to sell CDs from your website.
This is cheap to get going, and low hassle, as they handle the fulfillment and the tricky website stuff. A real distributor is also going to make sure your CDs are available in record stores in the regions where you are playing and probably promote your music as well.
However, most distributors will take a big cut, generally around 50%, so the CDs have to be marked way up or you will just get less.
Companies like CDBaby.com and CD Street.com fall into this category except that they don’t do retail distribution. For that reason they may be cheaper than a retail distributor (But then you need that kind of distribution, too. Don’t you?) Some of them will only allow you to sell your CDs. They don’t want to deal with your other Merch. (You do have other merch don’t you?)

3. You can sell directly through your website using a 3rd party company like PayPal.com to process the credit cards. This one gives you the biggest cut per sale. It’s basically free to set up and they charge a very low per-transaction fee (2.9% plus 30 cents pre transaction as of the time this was written). You have to handle the fulfillment. But you can sell whatever you want online, to anyone with a credit card.

No matter which option(s) you choose, make sure you shop around and compare prices. Go with the approach/company that you feel the most comfortable with. There are always new companies and websites out there that may be offering some combination or hybrid of the above options. (Beware: Sometimes low prices also mean low service levels and constant problems, and online companies are notorious for suddenly going out of business – taking your stock with them into oblivion) As your band grows you may need to reevaluate your approach and make changes.