In recent years record prices have been steadily rising and I hear people moaning about the cost of records, ya I get it ain’t cheap buying records when I started doing distro most records were €8.00 and max €10 now lower priced records are about €12.00 so where do these ‘extortionate’ prices come from. I thought I would give an idea to you on how I ran/run distro.
I have been running distro for about 12 years now and most of the time not knowing what I should be doing to run it, in recent years with 3 kids and life in general it has made me think abit harder in making it work, which is not easy when you life in the west of Ireland miles away from a punk scene and even punks with one or two exceptions.
So I guess I should explain how I run distro I use experience and spreadsheets, experience as in I know where to get records from and how best to get them to me in terms of shipping and other charges. This may be boring to some people but to other i hope I explain it clear enough that it can help in some way or another and I encourage questions.
When I am placing an order I use spreadsheets, I have built lots and lots of spreadsheets for all the places I buy records from so for explanation purposes lets say I am ordering from a new distro I have also done up an example spreadsheet for any of you nerds,(https://docs.google.com/spreadsheets/d/1DESDqBFI8Tk_54ZKpOeMgcCYCEtXghSMB2Xg8u3prJM/edit?usp=sharing) I ask for a wholesale list I will then pick out what I think will sell in Ireland and to people who usually order from the distro, I create a new spreadsheet and enter the quantities and price to get a total, I then divide the total by the estimated postage rate so any record that costs more wholesale will take alarger majority of the postage rate so as you would expect 12″s take lot more of the postage rate than 7″ based on their price and I do the same type of thing for any other charges customs/taxes/payment fees using the spreadsheets it will eventually give a column of what it will cost for me to buy in each record, I then religiously add on 30%, why 30 I will explain in a minute, the price that results from factoring all these costs and the 30% is then rounded to the nearest reasonable unit whole euro or 50 cents in most cases. I then check these prices against the going rates and if it is the round the mark I will place the order if not I will either not order or I will order more back catalog which I will talk the issue of this in another future blog post,
So lets do this in short, I am actually am currently looking at ordering a record to my distro which is coming out this month from my favourite label:
Wholesale Price £8.00
Wholesale Price in Euro €9.00 (based on 1.127 exchange rate)
Postage per Unit: €0.60 (based on ordering about €300 of spread across 34 LPs records and postage at about £18)
So now we are about €9.60 now we add the 30% which is €2.89 added in
Bringing the Sale Price to €12,49 which I then check against the going rate and if ok thats how I come up with the price of your €12.50 record you want but I still had to order over €300 worth of records to make your record that price.
Ok that I said I would come back to that 30% what is that for well when people buy records off the webstore online they usually pay with Card/Paypal which is fees something like (€0.30 + 1-3% of sale) depending on the order this could be about 5% or more of total cost seeing that it takes the shipping someone pays into account, with shipping it is as high as ever so I try to not add any extra costs to shipping prices so the packaging and labelling of each package comes from this 30% which usually equals to about 40 cents per record give or take for boxes or envelopes which I buy 100s of in bulk. The rest of the 30% goes to paying for everything else. I pay for storage space out of my own pocket see my other post on the cost of running a distro, Other costs like seller fees on Bandcamp/Discogs/Ebay all add up as well at about 10% of each order. So expect to pay more on my Discogs than my actual website. To keep the distro ticking over you need to constantly order new stock and stuff and not everything always sells so that also takes up more of the 30%
Ok I know there is a bunch of maths and I hope it all makes sense as I had a few beers while writing. If you wonder why a record costs more in the distro and more than the going rate factor the above into everything else. Best ways to save on ordering records order larger quantities in Ireland you can order 40 LPs for 8 euro postage instead of 1 LP for €6.20, order off your local distro as it supports the local scene there is no point two people from the same town ordering the same record off a distro in a different country.