| Part of Week 1 of your promotional plan for your release involves getting
the product to stores. It would be a good idea for you to know how the records are
sold. The system is called "consignment" |
|
| When you sell records on consignment you actually continue to
own the stock in the stores until it is sold. You are paid for the product after it
is sold. The store can pay you for the stock they receive or return it. So an
"order" is not a sale but a request for more stock. |
| You know how many units you have sold by the
"re-orders." Let's say you put 5 copies into a store on consignment.
Somewhat later you receive an "order" for 10 additional copies.
This generally means that you have sold 5 copies. The re-order (for 10) has not been sold
yet. |
| The unsold copies in the store becomes your
"float." It is important to manage your consignment orders so that your
"float" doesn't become too large. Remember that you have to pay for those
CD's to be manufactured. |
| When 5 are sold, you'll put in 10. When 10 are sold,
you'll put in 20. Sometimes stores order too many records on their re-orders.
If you put in 10 and then the store may say, "well give me 100 more."
Although this is a positive sign, it would make more sense to "limit" that
reorder to about 25, unless there is some sales campaign happening that makes you feel the
100 order is prudent. This kind of situation usually happens from you mis-managing the
consignment in the first place. |
| When you have records out on consignment, you need to contact
the stores weekly to check for sales. This allows you to get new stock in the
stores right away. If you leave a store without stock for a couple of weeks, and
customers are asking for the product, the store will want extra records (more than they
really need). You will lose sales and the stores will lose sales. Checking with the
stores is very critical in the initial stages (the first few weeks) and even more
important in any area that has air play. After a few weeks you will get a feel about
how often you have to check back. The important thing is to regularly check and to foster
the relationship so that the stores don't feel they will run out of stock. Managing
your business like this also tells the stores that there is someone working hard to sell
records - in other words, they feel like they have "support." |
| What To Do With The Float |
| After the "retail life" of the product is done, you
will have extra stock coming back. This stock can still be sold at the live
appearances. A misconception that bands get is that you shouldn't sell records at
the gig. In fact, you should. Selling records at the gig "promotes"
your release to the friends and family of your customers that buy the piece. Our
experience is that selling records at the gig increases retail sales at the stores. |
| What's Next |
| Next week we go into this "consignment thing" in
more detail. |
