Setting up in-house retail sales? (By Kenny Love)
Now, that you are familiar and likely connected with online music sales sites, suchas CD Baby, or combination online/offline retail sites, such as The Orchard, you are probably comfortable in having your music distribution and sales fairly covered.
But, what if you could get even more music sales, and even more profitable income?
I’m speaking of consigning your product to retail stores, but, with one exception…consigning your product nationally, or even internationally.
For all concerned, “consignment” means placing your music in retail stores on a trial basis, then collecting payments when it sells, with the retailer keeping a portion of your sale.
You see, as consignment goes, most musicians who consign their music to retailers, usually limit their consignment territory to only local retailers, or on a regional level at most. Their reasoning is that any larger area will be too difficult to manage.
But, that is simply not so, and they are losing a fantastic amount of money by limiting themselves to their local regions.
So, I am going to show you how you can easily consign your music to retailers and be able to collect payments for sales every thirty days (or so) via a “step-by-step” process.
It is important to note that the consignment process will be most successful if you are already receiving some degree of promotion and publicity results, such as radio airplay, press coverage, video airplay or through your music being played in nightclubs via record pools, of which I have addressed in a previous article.
Otherwise, you may find your ability to move your product from retailers’ shelves almost as difficult as if you did not have product on them. And, if you do not have some degree of promotion or publicity, whether you have hired such a service, or you choose to conduct it yourself, practically, the only way that you will experience sales is purely by retail customers’ accidental discoveries of your music.
1. Concentrating on retailers (both major chains and independents) in areas where you are getting radio airplay, video airplay, press coverage or any other form of promotion or publicity, contact retailers in these areas who your distributors may not service. One of the best up-to-date online sources to use, particularly, for the U. S. is www.yellow.com
This is the online version of the Yellow Pages, and you should look in such categories as “Compact Discs,” “Compact Disc Retailers,” “Music Retailers” or similar categories.
2. You may prefer to visit local retailers in person, introduce yourself and make them a consignment offer, such as the amount that you will need from each unit sale, etc., and how often you will need to collect payment for any sales (usually every thirty days is the normal time frame). Retailers will also expect you to make a written agreement available to them that spells out the terms of the consignment.
3. As for retailers outside of your local area where you are already getting promotion or publicity, you can simply contact them via telephone and relay the same information that you do with local retailers in person.
In both cases, you should direct them to your website, whereby hopefully, you have your music streaming for them to listen, as well as have a bio and other important information regarding you and your project.
You are also free to utilize the retail consignment form that I have already created, and which you can download, customize with your own information, then upload to your own website, that is freely available at www.MuBiz.com/CnsnmtFrm.html
4. Once you have uploaded your customized version to your website, your retail accounts can then simply download it from your site, or you can fax a copy to them if they prefer.
You will also note that I have included discounts for retailers within this 1-page form that are designed to dramatically reduce the number of returns that are a commonality with retail consignment and distribution. The less returns, the more money you make (and keep).
Additionally, you will see where I have limited the number of units to five (5) at any given time. This is to ensure that there are just enough copies that should sell with no problem within a 30-day period, especially, if you already have promotion and publicity occurring in the retailer’s area. This limit also ensures that you have enough product to reasonably service enough retailers.
Also, with this limit, re-orders are more likely to occur before the end of your 30 day periods. This type of retail activity looks really great to traditional distributors who, after seeing your product’s retail track record, may contact you to inquire about carrying your product. This will give you stronger bargaining power with them, as well as wider distribution, than if you did not have retail product available and moving.
And, even if distributors do not call, this will allow you to approach them with an attractive sales history and track record.
Also, be sure to provide local retailers with two copies of the consignment form to sign (carbon paper between two original copies still works) so that both you and the retailer have copies.
5. As for retailers outside your area, or local retailers that prefer to use the online consignment form, be sure that they download, sign and either fax or mail the form to you *BEFORE* you send them product. This creates an initial record and verification of a purchase request. You then, in turn, sign the form then return a copy to the retailer along with his order.
6. When sending retailers product, be sure to *ALWAYS* send your product via some shipping/tracking method. I would, personally, use the Certified/Return receipt service with the U. S. postal service, and I believe that the U. S. postal service also now has tracking for 2nd Day Air/Priority mailings as well.
These particular services are probably the least expensive services on the market, but they will ensure that your product doesn’t get lost or stolen en route to the retailer. They also ensure a record of the retailer having received your product for those few unscrupulous retailers that may not wish to pay for your product if they received it by first class mail, but would sell it and keep its profits.
7. At 30-day intervals, contact your retailers, whether in person or via telephone, to inquire of any sales that have occurred. While you can pick up payments locally, you should have distant retailers forward you a check for payment that corresponds with the number of unit sales.
You could also have them pay you online via a credit card through PayPal, or another such online service. This would eliminate lost/stolen checks through the mail, while guaranteeing your payment quicker.
8. If, for example, within a 30-day period, you have three sales, with two unsold units with a retailer, you have the choice of either waiting for the remaining two units to sell prior to forwarding more product to the retailer, or you can offer to forward three more units to the retailer. However, it is probably best to wait until the two remaining units sell.
9. In either above case, once all five units have sold at any given retailer, begin the complete process over, starting with the retailer signing or faxing another copy of the consignment form in order to ensure accurate sales records and sales continuity for your project.
Note: Should your project begin to experience a large sales volume, you may wish to hire someone, i.e. a student or intern, to work this aspect of your project, and whom you can pay a commission for each sale. This will eliminate your need to pay hourly wages or salaries, and will further save you money.
As always, I welcome your comments regarding the content and subject matter of this particular article. Please feel free to send them to me at kennylove@MuBiz.com
Editor’s Note: Kenny Love is president of MuBiz.com, a radio promotion and media publicity service that also provides business and career services for musicians. See the company’s corresponding website at MuBiz.com