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December 5, 2006

The Amazon Advantage?

A question was posted to the Musicthoughts list about Amazon and how to best get sales through it. I have kept my eye on this for some time but have never considered it viable. The perfect solution for Bun' Ber E would be the Marketplace option, in which anything listed in Amazon (which we are) can be sold by anyone else - as long as they have a US postcode ...

However, I have reconsidered the Advantage option, in which we pay US$29.95 a year and Amazon takes a 55% commission on sales. I had always considered this unviable, but crunched some numbers this morning. In order to break even on this selling the CDs for $10 (same as CDBaby - Amazon.com has Unplugged listed at US$14.99), we would have to sell $29.95/$4.50 - 6.7 CDs. Call it 7. Add to that the cost of posting 20 CDs to the USA (estimate AUS$25) and we would need to sell 13 CDS a year to break even.

Now, so far in 2006 we have sold 5 hard-copy CDs through CDBaby. Most of these sales have come from previous CDBaby customers searching the site and most of the traffic to our sales pages has come from people searching CDBaby by genre. This means that people are finding us by searching for music of the kind they like - not by searching for us. This amounts to "background radiation" sales. If we assume that the Amazon.com marketplace is 4 times the size of the CDBaby marketplace (and I have no idea of the relative volumes but this sounds reasonable), if it not beyond possibility that we could sell 20 copies a year from "background radiation". Since the outlay is

However, since Unplugged has been listed for ??? long and has no sales rank at all, I might just save the money until I'm sure something has sold ...I'm not sure how Unplugged came to be listed but we have an arrangement with a distrutor through CDBaby that is supposed to place our stuff in Amazon ... I'll wait ... until the Marketplace option is extended to non-US postcodes.

Posted by Hughie at December 5, 2006 10:49 AM

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