CONSIGNMENT VERSUS DISTRIBUTION 
September 2000

Why and when is consignment better than distribution?

Almost every time I pick up the phone or do a free workshop these days, the inevitable question is, “how do I get national distribution ?” My first response is, “why do you need it?”

With that glassy look in their eyes, most artists respond, “because I want to get my CDs in all the stores across the country.” Then I frustrate them by saying, “what if I could do that for you, what are you going to do to make them sell?”

Again inevitably the response is, “I’m going to play shows and tell my mailing list and then probably mail out to college radio across the country.” I respond, “so if you are only going to do that, why do you need your CDs in various record stores across the country ?” The usual response is, “because once they are in the store, people will buy them.”

Guess what, as much as you would like him to, God doesn’t watch over people shopping for CDs and spiritually guide them or smack them on the head, to your CD in the rack out of thousands of choices. People buy CDs they have heard of. Most importantly, they are more likely to buy them on impulse.

What does this have to do with you? Everything! We are entering into the fourth quarter of the year. The quarter when most CDs are sold and the stores have no credit available with distributors. Why is this important? Because when the stores have little or no credit available, they only want to order what will sell fast. Not CDs that will hopefully sell 2 or 3 copies per month.

So with the stores coming into the time of the year when they ignore independent CDs, what do you do? Consignment!

The simplest, oldest and fastest way to get paid, form of distribution in our industry. How does it work? Simple. A store takes 5 of your CDs and places them on the shelves. When they sell, they pay you your percentage. If they don’t sell, the store doesn’t have to pay you. In a distribution relationship, the store has to pay the distributor in 60 days for the CD they have ordered. In most cases, they are paying for the CD before it sells!

With consignment, there’s no waiting for 6 months for your distributor to send you a check for 20% of what they owe you. You stop by the store, check how many they have in the bins and most stores will pay you cash right then and there for what you have sold.

In a time when the stores are betting their money or credit on already successful “boy bands” and not on you, use consignment for your and the stores advantage.

By the way. You don’t need your CDs in all stores across the country. Live shows and the word of mouth generated by the promotion of the shows are 75% of all your sales (and aren’t you going to sell your CDs at your shows?). Commercial radio airplay for an independent artist is only 9% and college radio airplay is less than 1% of your sales.

The big question is, are you really going to tour the country every month to play shows for 20 people in clubs 3,000 miles away, just because a college station in a corn field is playing it? Especially for no money?

Then use consignment first and become successful in your home market, home state and the neighboring markets you can reach on a monthly basis. After you have sold 10,000 copies in each market, consider expanding outward.