Make Money on Vinyl record sales: How to recoup your investment
Wondering if pressing vinyl is worth the investment? Learn how you can make money on vinyl record sales directly to fans, plus key insights on profit margins and sales strategies.
Make Money on Vinyl record sales: How to recoup your investment
by Tony van Veen via Disc Makers Blog
One of the questions our Disc Makers product specialists get asked the most is this: If I spend $1000 to press vinyl, will I make my money back?
In this article, I’ll discuss the cost of vinyl records and what your profit margins will be when you sell your records directly to fans. This will allow us to calculate how many records you’ll need to sell to cover your vinyl manufacturing cost. I’ll also explain the profit margins for distributors and stores, and I’ll provide some surefire tips for making money on vinyl. Let’s get started.
How much do vinyl records cost?
Let’s start by looking at what it costs to press a starter run of 100 records. Our most-economical vinyl option at Disc Makers is 100 12” LPs in black vinyl with color jackets and shrink-wrap for $999. This, by the way, is the lowest price in the United States by a long shot.
In addition to the pressing, let’s assume you’ll need a UPC barcode so you can also sell your records at local indie record stores and online. That adds 20 bucks. Plus, we’ll need to ship those records to you. Records are heavy, so figure about $150 for freight. The total cost for your project would be $1,169 for several cartons of beautiful vinyl records delivered to your doorstep. That averages out to $11.69 per record.
Of course, if you wanted, to you could spend more on your records to make them a collector’s item, like getting fancier jackets, or doing colored vinyl or heavy 180 gram pressings. But for today’s budget-conscious artist, let’s focus on what we just calculated.
Making your investment back
One of the biggest drivers of how fast you’ll make your money back is: What will your selling price be? At a minimum, you’ll want to sell your records for $20 a pop. That’s pretty much the lowest that vinyl records are sold for nowadays.
At most you’ll want to charge $35, though I’ve seen records from major acts sold for $40 at concerts. But you’re not a major act yet, so let’s assume you’ll sell your records for $25 each, which is a fair price music fans will pay all day long for a vinyl record.
Remember that you can set your price anywhere you want! A lower price will mean you’ll sell more records. A higher price will mean more profit power record.
I know from our artists that most of them sell their records directly to their fans — mostly at their concerts. And since the majority of small indie venues don’t take a cut of an artist’s merch sales, let’s assume that if you sell your records at a concert, 100% of those sales revenues would go to you.
If a record costs $11.69 to press and you sell it for $25, you make a profit of over $13 on each record you sell — a 53% profit margin. This means you will need to sell just 47 records to make back the full cost of pressing your records.
The cool thing is that you’d still have 53 records left to sell! And if you sell them all at $25, you’ll make a profit of $1325!
Now, of course you’re not limited to selling your records just at concerts. That would be silly! If you use email and your social media to direct fans to your website, you can easily sell some records to fans who may not have been able to make it to your concerts.
A platform like Bandzoogle charges no commission when you sell vinyl from your website, which means the economics are the same as selling records at your concerts. Plus you can charge a couple of bucks extra for an online order to cover your shipping and handling costs.
There are other selling channels, too. You can sell through Bandcamp, your local record store, and even traditional distribution.
Comparing vinyl sales margins
When comparing concert sales versus Bandzoogle, the economics are the same since Bandzoogle doesn’t take a sales commission.
Many independent artists have their own Bandcamp page where they sell their music. Bandcamp does charge a modest 10% commission on physical sales, plus they take a 4 to 7% credit card processing fee. So, it costs you about 15% to sell on Bandcamp. Instead of netting $25 for a record, sold you’d net $21.25. That still leaves you with a very healthy 45% profit margin on every record sold — per my example, that’s a profit of over $9.50 per record.
Many artists also want to sell some records directly at a local record store. You’d go in, talk to the owner or manager, and leave some records for consignment sale. You won’t get paid up front, but most stores will take a record from a local artist on the chance that a local fan will walk in and want to buy it.
A record store typically takes a 35% margin. So, if you sell your record for $25, their cut is $8.75. This leaves you with $16.25 per record, which means a more modest 28% profit margin for you, or a bit over $4.50 a record. If those records don’t sell on consignment, you can always pick them back up and sell them at your concerts.
Is digital distribution profitable for vinyl record sales?
Finally, there is digital music distribution. Frankly, it’s hard to get into a physical media distributor as a relatively unknown emerging artist. That distributor will want to see a track record that records they stock will actually sell through.
If you’re able to get your records into a traditional distributor, the margins get really tight, because the distributor’s gotta eat, and the record store’s gotta eat as well!
Let’s do the math. When you sell your record for $25 and as I just mentioned, the record store takes 35%, or $8.75. That leaves you with $16.25 per record. The distributor might work on 13%, so they take another $3.25. That leaves you with $13 per record sold. If you paid $11.69, that leaves you a bit over a dollar in margin per record sold, if you can get physical distribution in the first place.
So, if all you’re doing is pressing 100 records, forget about traditional distribution. Sell your products at your concerts, on your website and Bandcamp page, and maybe a few on consignment at local stores.
But, if you’re a more established band with a built-in fanbase, obviously pressing larger quantities makes your per-record cost cheaper, which changes the economics of selling records. 200 records at Disc Makers net out to about $8.80 a piece including freight. 300 are around $7.60. Larger orders are even less.
Surefire tips for making money on vinyl
Now that I’ve explained the cost of vinyl records, some ways to turn a profit, and how the distribution works, I’d like to conclude with some surefire tips on what you can do as an artist to pretty much guarantee you’ll sell enough records to cover your manufacturing costs.
Ask for the sale
The big secret to selling the most records possible is this: You can’t be afraid to ask. This is a big deal. You have to ask for the sale. I’ve been to many concerts where the artist has a merch booth, but almost no one in the room knows about it, unless you happen to go to the bathroom and see the table in a back corner somewhere.
If you’ve performed a show and kept your merch table a secret from the audience, you’re unlikely to sell records. You have to ask people to buy your records!
Encourage people to buy records
Another secret to selling records is that you have to make people want to buy your merch. Ask them to buy your merch, and then make them want to buy your merch!
Think about your friends and family. You have their phone numbers, you have their email addresses, and you see them in person. You want to use each of these channels to ask them to buy your record, plus you want to take every opportunity when you see them in person to tell them about your record.
After hearing about your record once, most people won’t take action. In fact, studies show that the average person needs about nine impressions of a message before taking an action. You’re going to have to send multiple emails to your list, and do multiple social posts about that one album.
It may seem annoying to you to repeatedly message your list, but the truth is most people will flat out ignore your emails and posts, so you have to hit them over the head several times.
Tell the story behind your record
One of the most-important things when you talk to people about your record is to tell a story about it. Tell them something interesting that grabs the reader or viewer’s attention. Something compelling. Something that tugs at their heartstrings, maybe.
Talk about how excited you are and how special this project has been for you. Offer up some details about what inspired this record, as well as the struggles, heartbreaks, joys, and thrills you experienced which led to this final product. And of course, don’t forget to tell people that you really want them to own a copy.
Don’t just use text in your communications. Photos are great and video is better. Get footage of you holding the record or playing the record.
Have a clear call to action
In your emails, social posts, and when you’re on stage, you want to have a clear call to action. Tell people what you want them to do. It’s amazing: If you actually tell people what it is you want them to do, some of them will actually do it!
When you’re on stage at a concert, tell the audience that you have a merch booth, that you have your brand new LP for sale for $20, and that you’ll be at the booth yourself after your set. In your emails, tell them they can be among the first to get your new album! Don’t leave any confusion about what it is you want a prospective buyer to do.
Get set up for accepting sales
Of course, you want to make sure you are set up to accept credit cards at your concerts with an app like Square. Nobody walks around with cash anymore. You don’t want to lose out on any sales because you only accept cash.
Post an unboxing video
Here’s a way to let strangers know about your record. When you receive your cartons of records from Disc Makers, film yourself unboxing them, marveling about how amazing they are. Post that on social media and tag us. Most of the time we, will share that content on our Disc Makers social channels. It’s a cool little way to get a bit more brand awareness.
Perform with other artists
The absolute best way to reach strangers is if you perform on a bill with other artists. Their fans won’t know you, but if you give an amazing show, you can sell records to total strangers
Sit at your merch table
One of the best ways to sell more records is to sit at your merch table yourself after your set to sell your records, and to autograph those records for fans. That makes the record such a special, unique memento that your fans will always hold onto.
Create a limited edition
Another great way to make fans want to buy your album is to issue it as a limited edition. If fans know that once this pressing run is sold out there won’t be any more made, that will make your record a much more desirable merch item.
Release your physical album before distributing it
I know just about every artist out there is eager get their music out on streaming literally just minutes after you’re done mastering it. Don’t do that! Hold off on your digital distribution and release your physical album two weeks before your music is all over streaming. If you have any fans at all, they’ll want to buy your album to hear your new music before it hits Spotify.
Start pressing vinyl
The time to start pressing vinyl (and making money on vinyl) is now! You can do this. Reach out to Disc Makers to get started!
Tony van Veen is the CEO of DIY Media Group, the parent company of Disc Makers and BookBaby. As a college student, he played in indie bands, created his own LPs, cassettes, and t-shirts, and sold them at shows. Today, he collects CDs, vinyl LPs, and concert t-shirts to support the artists he loves.
