way to go.

I got a phone call one day from a woman who worked for a CD manufacturer called “Way to Go Music.”

Before I could cut her off, she rattled off a lengthy list of indie labels and bands that her company had worked with. It was an impressive list (although today I don’t recall a single label she mentioned), however, I did manage to cut her off.

“I’m sorry,” I said. “We’re just a tiny indie. We only do seven-inches.”

“Well, don’t you want to do CDs?” she asked.

“Someday,” I said. “We did one once. We don’t have the money to do another one right now.”

“But you can’t really make money on a seven-inch,” she explained. “You can make a lot more money on a CD.”

“Sure,” I acknowledged. “But if I put out a CD, I can only afford to do one a year. I can do a lot more seven-inches.”

“We have the lowest prices you’ll find,” she said. “I’ll bet you I can get pretty close to what you’re paying for seven inches.”

She had my attention. We talked a little more, and she gave me a price that was barely more expensive than what I was paying to manufacture a seven-inch. She explained that her price was contingent upon my being able to press a minimum of four titles per year, with a minimum order quantity of 500.

Sandy and I talked about it that night.

“When we do shows at ACME,” I said, “We make about $500. If we do four shows a year, that will cover the added expense and then some.”

“But do we have enough bands to put out four CDs in a year?

“Sure,” I said. “We could do a cuppa joe CD, for starters.”

“Then what?” she asked.

“Then maybe we make the Travel Guide a CD. Or maybe we do a Gapeseed CD.”

“Gapeseed already has a CD coming out.”

“Okay, then maybe we do a couple of CDs with bands on The Tape.”

There were dozens of bands we could do CDs with. I wasn’t worried about that. This was 1994, not 2009, and a CD was a luxury that most bands could not afford. I felt reasonably confident that cuppa joe would be thrilled to do a CD, and I had a pile of demo tapes from bands I wanted to work with.

At the same time, it was a commitment. In hindsight, it was a nothing commitment, but as a guy in his early twenties, I’d be making an agreement to spend thousands of dollars over the next twelve months. I didn’t take that lightly. In my eyes, if I couldn’t afford to actually release four records, I’d still be obligated to pay the vendor.

The price, though, was utterly amazing. I had already come to the conclusion that I was never going to be able to work at Dromedary full-time if I was releasing seven-inches; I was dealing in pennies. I would need to produce records that I could make a few dollars’ profit on, and that record stores could make a few dollars’ profit on, in order for me to ever make any money on our records. Seven-inches just weren’t going to cut it.

Plus, there was that whole concept of depth that I was learning from Toast. Two songs was shallow. Five songs was deeper. Imagine 12 or 15.

I could tell that Sandy wasn’t thrilled with the idea of making a commitment like that. Our last two records involved very little money – Footstone paid most of the costs for the Wobbles record, and I borrowed the money for “Allnighter” from my father. Financially, we were still stinging – really stinging – from the costs associated with the Elizabeth compilation. That one had spiraled out of control quickly, and I think Sandy could see how this idea could spiral out of control four-fold.

Plus, in hindsight I think the whole Melting Hopefuls episode really affected her more profoundly than it did me. In my case, I was really hurt and distrustful by it. But in Sandy’s case, I think she really had a hard time separating the fact that these bands we worked with were our friends, but the relationship would suddenly veer off course and become a professional one.  I think Sandy had a tough time knowing when to take off one hat and put on the other – and when she did know when to change hats, I think she hated it.

One night I sat down and tried to itemize what it cost to actually get a record out.  First, there were the obvious costs, like the cost to manufacture the record itself.  I knew we cut corners there; most labels actually paid to have their records properly mastered before sending it to the pressing facility, but we elected to save the $400-600 and send the DAT directly to the plant without having it mastered.  To spend $0.40-0.60 per record on my initial pressing for a mastering lab was a luxury that I just couldn’t afford.

Then, there was the cost of packaging.  That involved printing sleeves – a cost that was insanely variable based on how we chose to do it.  There was also the cost to print inserts for the band, plus the cost of the insert that I dropped into each record to promote our other releases.  And all that got stuffed into a mylar baggie.  For a CD, the costs involved printing a booklet and tray card, and then buying the jewel boxes and trays themselves.

Beyond that, a certain percentage of what we pressed were earmarked as promos to be sent to radio stations, zines, distributors, stores, and VIPs.  That involved envelopes, letters, ink for our super-cool camel stamp, address labels, and various toys that we stuffed into each envelope with the record.  And we gave 10% of our initial pressing to the band, for free.

Then, there was advertising.  By this point, the number of publications in which we advertised had grown; there were regular ads in Flipside, Jersey Beat, Glut, Maximumrocknroll, Popwatch, Shoelace, Powerbunny 4×4, Insight, The Probe, Genetic Disorder, and a few others.  And there was at least one round of phone calls to radio and press, plus whatever phone calls our intern Terri made from Wisconsin.  We always sent extra records and press kits to Terri as well, so there was some cost there.

We spent all that money so that a handful of distributors would pick up our record, order 25 or 50 for a couple bucks each, and hang onto them in the unlikely event that a record store somewhere would place an order.  They’d hang onto the records until we wanted money, and then they’d send us a check along with all our returns, effectively removing any opportunity for us to continuously sell that title.  Only if the distributor sold out – as Dutch East had with the busy work e.p. – would they actually cut us a check and order more records.

The only distributor we had that was kind enough to pay us some money as they sold our records was Surefire.  As the owner of a seven-inch label himself, Ron knew our predicament, and would send us a check whenever he could.  He never sent us back any returns.

Doing this exercise, it became obvious to me that we would never make money on seven-inches.  In fact, we had lost money on every record we released – even the Footstone 7″ that we didn’t pay to press – except for busy work.  busy work was, barely, a break-even.

Part of the reason we broke even on busy work was because it sold through its initial pressing.  But a bigger part was because it was cheaper to make.  We only pressed 500 copies to begin with, and the packaging was a cheap, one-color print job with no insert.  

I began railing against the manufacturing costs.  They were so high that they kept me from doing the marketing I wanted to do.  I was unable to send out enough promos to get the kind of press and radio I wanted, I was unable to advertise in enough places, I was unable to spend enough money to get the word out – and even if I had been able to, I wouldn’t have been able to make enough money anyway.

I asked Ron what the typical wholesale price for a CD was.

“Seven dollars, usually,” he said.  “Sometimes less.  Sometimes more.  Seven is a good number.”

Seven!  Imagine what I could do with seven bucks a pop, compared to the $1.50 or $2 I was getting for a 7″.  And with Way To Go!, my manufacturing costs were going to just be a hair above what I was paying for a seven-inch.

This was a no-brainer.  Unless it was part of a singles club like our planned Travel Guide, I was no longer making seven inches.  I needed to go back to CDs.

~ by Al on April 5, 2009.

2 Responses to “way to go.”

  1. […] Way To Go.  The most recent post on this list, about being solicited by a CD replicator.  This post got […]

  2. […] Way To Go.  We decide to make the move from releasing 7″s to releasing […]

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