Hi,

Hopefully someone on this board can answer a few questions about production costs.

1. How much does it cost to produce a CD?

2. What is the accepted "mark up" of a CD?

3. Is $5 per CD an acceptible price and if so what would be the production cost v. profit with this price point?

4. I can buy blank CDs for pennies, is there a potential lower than $5 price point?

5. ITunes sells a song for $ 0.99. Using their price point would it be reasonable for artists to cut the number of songs on a CD in order to lower the overall cost of the CD?

6. If an artist owns his own music, couldn't he easily produce his own CDs and sell them (hard copy, not internet)?

I don't know much about this stuff which I why I'm asking...

Are you sure you're not mixing up CDs and CD-Rs? You'll need to get the CDs pressed in a plant whereas CD-Rs can be burned at home with your computer. It's a crime to attempt to sell CD-Rs and market them as CDs. They're not the same thing.

Underground music labels get CDs pressed in plants and they usually order 500-5000 copies. When you sell them on the internet the typical price is somewhere around 9-14 dollars / euros these days. Sometimes more if there's enough hype around about the artist. The "mark up" depends entirely on how many copies you get pressed and how much you dare to ask for them. You might have to keep them in boxes at your home for a very long time if the price is too high (most releases never sell out anyway).

CD-Rs you can attempt to sell at any price you think they'll go for (5 dollars / euros sounds reasonable). When you start out you're better off getting prepared to do trades with artists that make similar music as you do. You send them your record and they'll send you theirs. That's what constitutes a big percentage of the "sales" with CD-Rs in many genres of music.

1. How much does it cost to produce a CD?

Anywhere from free to a couple thousand dollars. It all depends ...

2. What is the accepted "mark up" of a CD?

What do you mean by "mark up?"

3. Is $5 per CD an acceptible price and if so what would be the production cost v. profit with this price point?

????? not sure what you are asking?

4. I can buy blank CDs for pennies, is there a potential lower than $5 price point?

????? Same as above.

5. ITunes sells a song for $ 0.99. Using their price point would it be reasonable for artists to cut the number of songs on a CD in order to lower the overall cost of the CD?

Depends on what that artist/label want.

6. If an artist owns his own music, couldn't he easily produce his own CDs and sell them (hard copy, not internet)?

He/she can depending on the contract they sign. An independent artist can, under a major label ... gotta talk to the boss which will mean no cause the label isn't making a profit.

Are you trying to do your own music independently?

There are several sources that actually will print your cds and cases for you. Your price point all depends on how much you have invested in the project.

Check out http://www.discmakers.com/. You might can find a lot of answers and options you are looking for.

ScissorsRockPaper said:

Hi,

Hopefully someone on this board can answer a few questions about production costs.

1. How much does it cost to produce a CD?

2. What is the accepted "mark up" of a CD?

3. Is $5 per CD an acceptible price and if so what would be the production cost v. profit with this price point?

4. I can buy blank CDs for pennies, is there a potential lower than $5 price point?

5. ITunes sells a song for $ 0.99. Using their price point would it be reasonable for artists to cut the number of songs on a CD in order to lower the overall cost of the CD?

6. If an artist owns his own music, couldn't he easily produce his own CDs and sell them (hard copy, not internet)?

I don't know much about this stuff which I why I'm asking...

1. Very vaugue question. It depends on what you have at your disposal, the genre of music, etc. Is it indie or are you trying to compete with the big boys?

You can't make a home recording setup sound like it was produced at The Hit Factory or Sunset Sound no matter how much software you have on your computer. If you are going to do a big project, you have to spend big money or have access (friends with the studio owners, engineers, etc.)

That doesn't mean you can't make a great record that is commercially viable on a low budget. It really all depends on what you have available to you. If the answer is "nothing" then you should try to find out how much local producers charge or local studios charge and work on something that you can afford.

2. Realistically, if you are doing a self-produced release, $10-15 AT MOST. If you actually want to sell some - $5-$10.

3. a. Yes. b. Depends if you want to pay for full production of it or if you want to DIY.

www.discmakers.com does full production CDs. It can cost a few grand but you can get a small package deal for several hundred dollars. It depends on what you are trying to do. Option B is to duplicate them yourself. You would NEED to invest in an external CD burner unless you want to wear down the one in your computer. Its NOT A SMART IDEA TO DO THAT. Its worth the $100 bucks (or less) to get an external burner. Then you can do CDs in smaller quantities. You would need to find someone who can design a cover for you and pay them. that might be a few hundred dollars. Check craigslist for designers.

4. If you want to sell CDs for less than $5, you options are limited. You can find a CD duplication house online that does them like discmakers does and see if they offer one of those package deals where you can get 1,000 done for $1k or so. The problem is, you have to buy in that quantity and your cover design and packaging options will be limited. You could then sell them for $2+ but the burden of unloading them is on you and who knows how long it would take to sell that many if you are local; plus, you haven't discussed marketing. You do realize that if you had to pay for studio time, etc. that selling CDs for $2 will have you operating at a loss. There is no profit to be made at a $2 price point when you throw in production costs.

5. A CD can contain as many or as few songs as you like. There is no specific number required. Consumers have become spoiled and like to see 15-25 songs on a CD but it certainly is not necessary. To be honest, its actually not that smart to put so much of your catalogue on one disc unless its a greatest hits CD.

6. Yes.

7. I'm throwing this in because, in your words, you "don't know much about this stuff":

DO NOT IGNORE MARKETING. Its one thing to make a product but another to sell it.

Come up with a marketing plan or consult someone who does it for a living. Unless you only plan to sell CDs at gigs, you need to figure out how to promote your artist or expect those CDs to sit in boxes.

Okay, that's all you get for free.

[Edited 5/1/12 11:34am]

novabrkr said:

Are you sure you're not mixing up CDs and CD-Rs? You'll need to get the CDs pressed in a plant whereas CD-Rs can be burned at home with your computer. It's a crime to attempt to sell CD-Rs and market them as CDs. They're not the same thing.

Speaking of marketing CDs but within a reasonable price point.

Underground music labels get CDs pressed in plants and they usually order 500-5000 copies. When you sell them on the internet the typical price is somewhere around 9-14 dollars / euros these days. Sometimes more if there's enough hype around about the artist. The "mark up" depends entirely on how many copies you get pressed and how much you dare to ask for them. You might have to keep them in boxes at your home for a very long time if the price is too high (most releases never sell out anyway).

500-5000 seems a bit too many for this endeavor (at least initially). I know this will likely raise the price if I order only 100, yipes! $9-14 is also a bit more than I'd expected.

CD-Rs you can attempt to sell at any price you think they'll go for (5 dollars / euros sounds reasonable). When you start out you're better off getting prepared to do trades with artists that make similar music as you do. You send them your record and they'll send you theirs. That's what constitutes a big percentage of the "sales" with CD-Rs in many genres of music.

I very much like this ^ concept. Thank you.

LittleBLUECorvette said:

1. How much does it cost to produce a CD?

Anywhere from free to a couple thousand dollars. It all depends ...

I suspected such--has to be priced out based on numerous factors, artists' time, studio costs, marketing, shipping, etc.

2. What is the accepted "mark up" of a CD?

What do you mean by "mark up?"

Do artists/lables make $.50 per CD or $5 per CD?

3. Is $5 per CD an acceptible price and if so what would be the production cost v. profit with this price point?

????? not sure what you are asking?

With all costs taken into consideration, lets say hard costs mean that we've spent an average of $2 per CD (factored over 100 CDs). If I sell the CD for $5, my profit is $3 over the long haul, I could live with that.

4. I can buy blank CDs for pennies, is there a potential lower than $5 price point?

????? Same as above.

Explanation above.

5. ITunes sells a song for $ 0.99. Using their price point would it be reasonable for artists to cut the number of songs on a CD in order to lower the overall cost of the CD?

Depends on what that artist/label want.

Certainly. I do not think a CD with 15 songs is a good business decision these days, unless as BlaqueNight commented it a greatest hits CD.

6. If an artist owns his own music, couldn't he easily produce his own CDs and sell them (hard copy, not internet)?

He/she can depending on the contract they sign. An independent artist can, under a major label ... gotta talk to the boss which will mean no cause the label isn't making a profit.

Certainly makes sense to me. I would strive to own my own then I could do whatever I wanted with it.

Thanks.

BlaqueKnight said:

ScissorsRockPaper said:

Hi,

Hopefully someone on this board can answer a few questions about production costs.

1. How much does it cost to produce a CD?

2. What is the accepted "mark up" of a CD?

3. Is $5 per CD an acceptible price and if so what would be the production cost v. profit with this price point?

4. I can buy blank CDs for pennies, is there a potential lower than $5 price point?

5. ITunes sells a song for $ 0.99. Using their price point would it be reasonable for artists to cut the number of songs on a CD in order to lower the overall cost of the CD?

6. If an artist owns his own music, couldn't he easily produce his own CDs and sell them (hard copy, not internet)?

I don't know much about this stuff which I why I'm asking...

1. Very vaugue question. It depends on what you have at your disposal, the genre of music, etc. Is it indie or are you trying to compete with the big boys?

You can't make a home recording setup sound like it was produced at The Hit Factory or Sunset Sound no matter how much software you have on your computer. If you are going to do a big project, you have to spend big money or have access (friends with the studio owners, engineers, etc.)

That doesn't mean you can't make a great record that is commercially viable on a low budget. It really all depends on what you have available to you. If the answer is "nothing" then you should try to find out how much local producers charge or local studios charge and work on something that you can afford.

Yes, I realise there are many factors involved in pricing which will determine cost. I guess I was trying to get a quick and realistic guide. I know for instance that record stores sell CDs for $14 but I'm sure there's a certain amount of that is just fat and has nothing to do with actual costs with a REASONABLE profit.

Not trying to compete with anyone, actually trying to help some folks. LoL

Good advise here on the networking and connections, I'll do just that.

2. Realistically, if you are doing a self-produced release, $10-15 AT MOST. If you actually want to sell some - $5-$10.

All things considered, I'm thinking $7 might be the going rate (everything included). I'd have to back out costs, but will start with a selling point of $7 minus costs to determine profit.

3. a. Yes. b. Depends if you want to pay for full production of it or if you want to DIY.

www.discmakers.com does full production CDs. It can cost a few grand but you can get a small package deal for several hundred dollars. It depends on what you are trying to do. Option B is to duplicate them yourself. You would NEED to invest in an external CD burner unless you want to wear down the one in your computer. Its NOT A SMART IDEA TO DO THAT. Its worth the $100 bucks (or less) to get an external burner. Then you can do CDs in smaller quantities. You would need to find someone who can design a cover for you and pay them. that might be a few hundred dollars. Check craigslist for designers.

I'll look into this.

4. If you want to sell CDs for less than $5, you options are limited. You can find a CD duplication house online that does them like discmakers does and see if they offer one of those package deals where you can get 1,000 done for $1k or so. The problem is, you have to buy in that quantity and your cover design and packaging options will be limited. You could then sell them for $2+ but the burden of unloading them is on you and who knows how long it would take to sell that many if you are local; plus, you haven't discussed marketing. You do realize that if you had to pay for studio time, etc. that selling CDs for $2 will have you operating at a loss. There is no profit to be made at a $2 price point when you throw in production costs.

Yep, makes sense; however selling a CD for $7 that cost an average of $2 to produce provides a $5 profit, yes? Even if the profit is $2 I could look at volume? Lower the profit margin to make affordable, sell more?

5. A CD can contain as many or as few songs as you like. There is no specific number required. Consumers have become spoiled and like to see 15-25 songs on a CD but it certainly is not necessary. To be honest, its actually not that smart to put so much of your catalogue on one disc unless its a greatest hits CD.

I totally get this, not sure why so many songs. I would think five good songs, maybe seven and people will feel their getting a bargain for $5-$7 (@ $.99 per song)? I'm just talking here...so bear with me.

6. Yes.

To me, this is the best route to go. Could provide 100% profit margin, more control to set and manipulate price with market--get people hooked and then raise the price--same concept as "on-sale".

7. I'm throwing this in because, in your words, you "don't know much about this stuff":

DO NOT IGNORE MARKETING. Its one thing to make a product but another to sell it.

Come up with a marketing plan or consult someone who does it for a living. Unless you only plan to sell CDs at gigs, you need to figure out how to promote your artist or expect those CDs to sit in boxes.

Okay, that's all you get for free.

Nooooooooooo, I want mooooorrrrreeee. But first a little more research. Thanks!

[Edited 5/1/12 11:34am]

ScissorsRockPaper said:

novabrkr said:

Are you sure you're not mixing up CDs and CD-Rs? You'll need to get the CDs pressed in a plant whereas CD-Rs can be burned at home with your computer. It's a crime to attempt to sell CD-Rs and market them as CDs. They're not the same thing.

Speaking of marketing CDs but within a reasonable price point.

Underground music labels get CDs pressed in plants and they usually order 500-5000 copies. When you sell them on the internet the typical price is somewhere around 9-14 dollars / euros these days. Sometimes more if there's enough hype around about the artist. The "mark up" depends entirely on how many copies you get pressed and how much you dare to ask for them. You might have to keep them in boxes at your home for a very long time if the price is too high (most releases never sell out anyway).

500-5000 seems a bit too many for this endeavor (at least initially). I know this will likely raise the price if I order only 100, yipes! $9-14 is also a bit more than I'd expected.

CD-Rs you can attempt to sell at any price you think they'll go for (5 dollars / euros sounds reasonable). When you start out you're better off getting prepared to do trades with artists that make similar music as you do. You send them your record and they'll send you theirs. That's what constitutes a big percentage of the "sales" with CD-Rs in many genres of music.

I very much like this ^ concept. Thank you.

I don't know any pressing plants that would allow you to press just 100 CDs. Maybe there are some in the States, but not here in Europe (unless there are some new ones out there). 300 is the lowest I've seen here in Europe, but the price difference between 300 and 500 is often fairly marginal.

If you want 100 copies then you can get "pro-CD-Rs" in such amounts. However, they're not considered very desirable by most buyers. You can get vinyl LPs in smaller amounts and in many genres of music they sell very well (dance, electronic, experimental, modern jazz, underground hiphop etc.). They don't necessarily reach the mainstream pop audience.

ScissorsRockPaper said:

Yep, makes sense; however selling a CD for $7 that cost an average of $2 to produce provides a $5 profit, yes? Even if the profit is $2 I could look at volume? Lower the profit margin to make affordable, sell more?

Please, please, please DO NOT gloss over marketing costs. This is the biggest mistake unknown artists make. People who don't know you are not going to be inclined to buy your music, even at $7/CD. Its not a profit if you have no marketing strategy and that will also cost you something. There are firms that do it for fees and there are many other ways of doing it yourself but they will also cost (posters, etc.) You HAVE to advertise if you expect to sell anything.

Often times, when people do the CD math, they skip over this and then it comes back to bite them later.

There are additional postage costs (shipping, packaging). Getting a website usually costs something too. Services like Paypal will also take an additional slice of the cake.

Don't even get me started on what a pain in the ass it can be to take just one item to the post office in the middle of the winter when even no other orders have been made in the recent times.