Welcome to transcript of episode seven of The Music Biz Weekly, a weekly podcast co-hosted by Michael Brandvold and Brian Thompson.
Each week Michael and Brian will discuss the latest events in the music business and music marketing events and techniques.
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- Michael Brandvold – @michaelsb
- Brian Thompson – @thornybleeder
This week’s episode, April 29, 2011 – E-Commerce Solutions for Bands
I would like to make a special note, Episode 8 of The Music Biz Weekly Podcast will include a very special guest, one of the most sought after speakers in the digital music market… Ian Rogers CEO of Topspin!
Michael Brandvold – Welcome to episode 7 of the Music Biz Weekly Podcast. This is Michael Brandvold and on the other end of Skype I’ve got Brian Thompson. How you doing today Brian?
Brian Thompson – I’m doing fantastic Michael, how are you?
MB – Not too bad, not too bad, it’s a beautiful day down here in the bay area. We’re actually supposed to hit 80 degrees this weekend, and I can’t wait to get out on my bike and enjoy some nice weather.
BT – Lucky man, lucky man. We’ve got blue skies here in Vancouver today too, so should be a good weekend.
MB – So, you know I think we should just… let’s just jump straight into (the) topic for episode 7. I posted on twitter that we kind of do an improv podcast every week here, because literally you and I get on Skype…15min before hand and throw topics out, and we just pick something and go with it.
BT – Yeah, totally. For people who that are tuning for the first time… we’re not script driven, we don’t sit there and brain storm for all week. We literally toss a couple of ideas back and forth and say “yeah, that sounds good, let’s talk about it. Let’s hit record.”
MB – We just kind of watch the news of the last week and if there’s a hot industry topic, or if there’s something we just feel like… let’s discuss it, because we get a lot of questions on it… We just throw it out there, and we go with it. You know, surprisingly I think that’s really kind of become the cool part of this podcast. It’s not scripted, it’s not overly planned out, and it kind of forces us to think on our feet.
BT – Hey, I wouldn’t like it any other way. I pride myself on being as upfront and with my opinions as possible. So there’s no need for script when you live your life like that
MB – So, this week’s topic that we pulled out of the hat is “e-commerce”. The various e-commerce solutions that are out there for bands and musicians, and some basic e-commerce techniques, marketing…what you need to do to sell your music online. Because at the end of the day – and I think you’ll agree – every band…the first thing they want to do is they want to sell their music. Even though we’ve had many discussions about selling music as…next to near impossible at times. That’s the first and most important thing bands want to do: sell music.
BT – Ya, I mean the first thing…I mean I get emails, tweets and Facebook messages every single day from people asking for advice going “DUDE, where do I start? Where do I begin? Do you have a recommendation for which service to use?” and you know what, there are so many options, and there are so many great options, and a lot of them overlap, some of them have amazing features that maybe you’re not ready for yet? And others have monthly fees tied to them, because they are more pro in nature… and there are other free services that you can use that take a cut of your sales… so it really depends on where you’re at and where you hope to be a year from now, and how intense your marketing and promotional campaign is going to be. That really determines on… you know, which service you should focus on.
MB – Yeah, and you know, before jumping in and start naming names, I would highly recommend…this is something you can shop around for. There are so many of them out there and they all have different types of deal structures. Make sure you compare them. A monthly fee vs. a monthly percentage, do they charge you for support? Do you get support? Will they fulfill the orders? Do you have to fulfill the orders? Shop around and just look at the various little costs that could be involved because at the end of the day you might get yourself into a deal where you’re paying a monthly fee on top of a percentage of a sale and you’re shipping out stuff on your own and you’re providing customer service. Is that the best solution?
BT – Yeah, I fully agree. So maybe we should start? Maybe we should start rattling off… well, I mean, there’s also 2 or 3 sides to this topic. I mean, we can be talking about digital music sales, we could be talking about album (like physical album sales), we could also be talking about t-shirt merch sales.
MB – I think we need to be talking about all of it. Because in this day in age, you better be selling more than just the digital download. I’m hoping you’re trying to sell CDs, DVDs, t-shirts, hats, stickers… you know, I hope you’re trying to sell anything you think your fanbase is interested in buying.
BT – Totally. I mean, hopefully. But of course, like you said, the magic word is “fanbase”. I think the very first thing a band needs to do is really look at “do you have a fan base?”
MB – Do you have somebody to sell to?
BT – No I mean really, I know a lot of people who that are watching what we’re doing, and listening to this podcast…are…maybe they just started a band? Maybe they just finished cutting their first EP, and they have played 3 shows. So I mean, this could be a very long discussion depending on where you’re at. Are you at that…is your band, or solo career in its infancy? Or have you been gigging for 5 years, with an email database of 5000-10000 names?
MB – Right.
BT – So how about we start by…looking at the 3 different areas of revenue (which we just talked about) and throwing out some ideas for where they can source out places to sell. So, digital music. Digital music, #1, obviously because the last figure I saw was like 92% of worldwide digital music sales – might be a little less now – is itunes.
MB – Yeah. The 12000 pound gorilla, whether you like them or not, whether you hate apple or not, that better not play into your decision. You need to be on itunes.
BT – You also do need to have your own service integrated into your own website and social media profiles, but there are people who are dedicated to itunes, and that’s not a bad thing. A lot times, if they stumble upon your music, they go to itunes.
MB – You know, I do that a lot. I hear a band I like, I search itunes. If itunes is not there, I search amazon.
BT – Okay, so I think most people know how to get their music on itunes. You can’t do it by yourself. You have to go through a digital aggregator. So those people include CD Baby, Tunecore, The Orchard…Who else do we got who does digital aggregation? I mean, we’re just talking North America, there’s different companies in Australia there’s a company called Valley Arm… Does Nimbit do…?
MB – You know I want to say… I think they might?
BT – I think Nimbit does…?
MB – Or they may have a relationship with somebody that they would then get you on to it.
BT – But anyway, there’s the idea. You can’t do it yourself, you need to go through a 3rd party, and we’ve rattled off the top ones anyway. And there’s tons more. If you don’t want to go through any of those, just go into google and punch in “digital music itunes aggregator” and that should probably get you your results you need to surf and find. So that’s number 1 of course. Number 2 is Amazon mp3. and I think all of the same digital aggregators…
MB – Will get you there!
BT – Exactly. So signing up to CD Baby or Tunecore, 1,2 punch, you’ll automatically get into the 2 top digital music stores on the planet.
MB – Yup. Again, you just have to be there.
BT – Okay, so now… of course, both of these services take a percentage of your sales. Now, if you want to go the DIY route where you have full control of some thing of your music and you have album store widgets you can embed on your facebook page, your website, etc..etc… That’s where you need to look at other services.
MB – You know, lets just add real quick: by getting yourself on to itunes or amazon, does not prohibit you from selling your music in other ways.
BT – Oh yeah, they are not exclusive.
MB – They’re not exclusive. So don’t worry about that. You can sell your music through many different platforms, and you should try to get your music into as many platforms as possible, so that you get that exposure.
BT – and if for whatever reason you need to, you can opt out at any time. You’re not signing any term of contract. So, there might be a…you might need to pay a penalty fee for having them pull it ahead of the renewal date, but there is no… you don’t need to fret. You’re not signing anything exclusive.
MB – Right, right.
BT – So for the other approach, again, my favorite is Bandcamp. I think Bandcamp is an amazing site that is really super easy to work, super easy to navigate, they don’t take any percentage of sales but they do take a percentage for…the Paypal transaction fee – I think it might be 15%. But anyways, it’s much less than what itunes or amazon would take. And they’ve got great widgets for you to embed on your site, create an online store, very shareable, great sounding music player… and the beauty of Bandcamp is that you can also bundle physical goods with your digital store! So you can actually sell a digital album coupled with a t-shirt.
MB – And I think that’s real important, bundles.
BT – Big time.
MB – Big Time. You need to think about that. Because that adds value perceived, additional value to the consumer, to your fan, when they are spending $10 and if they see that they get a t-shirt with it in addition… boom! It’s worth…it makes more sense to them to spend that money that way.
BT – Well let’s face it, you spending digital goods costs nothing. There is no cost. It’s not like you’re giving away a CD that cost you a buck, or a buck fifty or whatever. There is no cost, it’s a digital good, it’s free. So for you to sell a t-shirt with a digital album bundle for $20, or $15 even, whatever, it’s a great deal. And it provides… I mean there’s a huge perceived value there. Much more so than just trying to sell a digital album for $10, that no one can touch or feel. So tying it to a physical good really can help spur sales.
MB – Oh yeah, for sure, for sure.
BT – So Bandcamp is a great one. There are many others. There is Reverbnation now, does digital sales as well, and they also have a merch component.
MB – Nimbit does. I have a client that’s been using Nimbit to sell his 3 disk box set, you know great little widget tools so you can take and embed the digital store on to Facebook, onto your website, onto your blog… you know, they’ve got integration with their email campaigns, they’ve got some marketing tools so you can provide samples, so you can give away songs with a signup… you know, like you said, there’s a number of good players that will provide that digital sale solution.
BT – You know, now that we’re talking about Nimbit…The big news on the block in the past month…which I think we touched on briefly before, is Topspin. Topspin has now opened itself up to everybody. Up until a month ago, Topspin was…they referred to themselves as the Photoshop for music marketers: which means it’s not Microsoft paint, where you can sit down and do a shitty little doodle with very little experience. It’s a very intensive music marketing direct to fan platform. It’s not simple, there is a huge learning curve but it is… it provides you with a huge toolset that not only enables you to sell music directly to fans on all of your platforms across the web, and with beautiful widgets and amazing control of them and flexibility…but you can also use it as your email management data software to do some amazing email marketing campaigns with analytics to really look at the numbers on the backend, analyze what’s working, what isn’t’ working… but you can also use them as your physical merchandise store as well, with stock management, and all that kind of stuff. Now they’re not free, they do charge a monthly fee, so again it goes back to the discussion earlier where you and your fanbase are at: are you prepared to… you know, if you only have an email list of 50 people, then maybe it’s not the right time to jump into such a complex system.
MB – Yeah, you need to think about how your commerce can grow. Initially… you know, initially you may sit back and think “I don’t want to pack up a t-shirt and ship it out myself” but if you’re getting 1 order a month, why not? You know, start with a solution where somebody else is just processing the order, sending you the order file, and you’re taking care of everything: customer service, shipping, returns, all of that, because it’s a small quantity. But it would be nice to know where you could grow as your business grows. So, will your solution 6 months from now let you… say, “you know what, now I’m ready for you guys to stock my inventories and ship it for me, without signing up for a new system and replacing your store.” You know, think about these types of things now. You may have no fans, little fans, or very little business right now, but you’re hoping that in 6, 12 months you’ve got some e-commerce business happening.
BT – Yeah, on the topic of physical merchandise, basically you’ve got a number of options. There are 2. You can go through a company like Spreadshirt, or Zazzle, or Reverbnation, or Cafepress… those I think would be the top 4 that manufacture your merch orders as they come in. Which means you have no upfront cost. You aren’t paying a $1000 to have a couple boxes of t-shirts arrive at your doorstep and sit in your closet while you wait for order to arrive. But, what you give up by partnering with these people is… obviously you’re going to be making anywhere near the amount of profit per purchase.
MB – You know, the products are a little more expensive, your take is less, and I’ll be honest, you can recognize a Cafepress store and merchandise selection in a second because it’s similar to everybody else.
BT – Yeah, again, it really depends on where you are. For example, on my website, Thorny Bleeder, I have a Spreadshirt store for my merchandise. And you know I’m a record label, a tiny little indie record label, so it doesn’t make sense for me to invest a $1000 for the few orders that roll in every month. But you know, I’ve gotten a few products from them and they look amazing! They look really really great. And you know, I’m selling t-shirts for $20, and I’m making… I dunno, 6,7 bucks of profit per shirt which isn’t’ bad. I’d rather make 6 or 7 bucks than have $500 worth of inventory sitting in my closet.
MB – You know what, I think this is leaning into what would be a topic for us down the road as well, is just merchandising.
BT – Totally.
MB – I spent years working in the merchandising side of things, and I’ve got some good friends who might actually be some interesting guests to talk about that. Because at the end of the day, you can go out and shop around for silkscreen printers and get t-shirts printed.
BT – Again, if you have the ability to ship orders, I mean if you’re a band that is planning on the road 5 months of the year, then obviously you’re not in a position to ship your own orders. You ultimately…
MB – You want a fulfillment house.
BT – Yeah. And there are many different people. There are people where you can print your own goods and ship it to them to do your fulfillment for you. Or there are people who will do the printing, and the manufacturing, and the fulfillment all on their own. So I mean there are so many different things.
MB – There are so many options, and it goes back to the first thing I said. You need to shop around and look at what everybody provides and what the cost is. And be honest about what you really need at this point in your career. One thing that I will put out is that at any point you want to make sure you got good customer service. Because that will make or break… and by that, that means if you’re going to let your mom do your customer service for you, she better be on top of it. Because there’s nothing worse than somebody who sends an email that says “I got the wrong size shipped to me, how do I get a new shirt” and you don’t get a response for a week.
BT – Or, you don’t want an order sitting there unfulfilled for 7 days with no communication to the person that just entrusted you with their visa.
MB – because here’s an interesting thing that many of you may not know about. Orders do not get charged – meaning that the money is not collected until the product ships.
BT – Correct.
MB – So what that means is that you might take an order but you don’t have it in stock. You’re not collecting the money until the product comes in. That makes sense. The worst situation is (when you) just imply that you got that t-shirt in stock, but because you don’t have a support team that can commit to what you’re doing, it doesn’t get shipped out for 3 days. That meant the order sat there for 3 days and you did not get the money for 3 days. And in that time, that person might decide to cancel their order.
BT – I worked with a band a few years ago who insisted on their store being managed by themselves, and they simply put up their shirt sizes on a Paypal button, beside each on their website. It looked ugly but they did get a few orders. Well, turns out that the email address where those orders were being sent to was on somebody’s – and they admitted that “oh, I don’t check that email very often”. DUDE!
MB – Oh… what? How much money is sitting there??
BT – So I… because I was working with these people, I was getting emails from customers going “Do you have any idea when my orders going to ship? You know, I placed it two weeks ago?” And I’d be like “I dunno, it’s not my store…let me contact the band and find out for you.” And sure enough, I didn’t get an answer on their email, I had to call them and go “What’s up, are you guys not shipping orders?” “Oh… we have some?” It’s like errrr…So anyway, little things like that. If you’re not in the mind set, or if you’re not organized, if you’re not on the computer everyday, then obviously you need to acknowledge to yourself that you’re not capable of this job, so…
MB – And outsource that. Because believe me. Fans will be the most vocal when they’ve sent you money or ordered something and they don’t get it. And I don’t care if you’re a small band to a band like KISS or Motley Crue: if they’re getting stiffed on their order, they are going to be very vocal about it.
BT – And you’re not going to get a repeat order, that’s for sure.
MB – For sure. So just.. you know, so many people I think ignore that portion of the e-commerce business. There’s a big, big chunk of this whole workflow and infrastructure that happens after you’ve collected the money. You’ve got to be able to ship it, you’ve got to be able to handle returns, you’ve got to have somebody who can pick up the phone and call somebody and answer questions – that’s a requirement. If you can’t do it, don’t be afraid to outsource it.
BT – So let me ask you a question. Let’s look at two different scenarios: beginning band who is just getting their…just dipping their toes into the water, so that’s the first scenario. The next scenario would be a band who’s been around for a few years, have a few thousand fans and whatever. So what would your ideal solution be for each of those two scenarios?
MB – I think we first, we already hit it up front. Ideal, regardless, you need to get in to itunes and amazon. So that gets your digital out there. And you can…if you’re a small band, you can just put a link on your site that says “click here to go buy on itunes.” You don’t have to worry about setting up a deal with somebody else to do your own thing. That’s easy enough to do. Then you’ve got physical goods, if you’re a small band. And how much physical goods do you have? If you’ve got very little or if you’re going to use Cafepress or Zazzle, you’re almost set up right there. You know you can go to Cafepress or Zazzle and get a store built – they’re gonna build it for you. And you can link to it. And they’re gonna handle the production, they’re gonna handle shipping, they’re gonna handle everything for you. So if you’re just starting out, that might be the best way to kind of get your feet wet into this commerce work, because you need to learn what’s going on before going out there and building your own store and posting your own store and warehousing your own product and supporting and supporting your own product. I think, if you’ve never done it before, try learning through some of these simple methods of Zazzle and Cafepress and stuff like that.
BT – So on the other side, you know, if there’s a band out there that is selling some good sales on their last album, they are selling merch, they are on the road consistently, they have a good considerable email database of fans… what would your ideal set up be?
MB – You know, the ideal set up is one person who can sell physical and digital goods for you. So you don’t go out and join somebody who just does digital goods, and then you have to build another store for somebody else who does physical goods. It’s confusing to the customer. You do want – if at all – a single store. Because I’ve run into this in the past, where bands – major bands – have had a link going off to here to buy some customized merchandise. Well, when a fan buys that item they don’t necessarily realize they are buying it from a different store. They are buying it from you the band. So they’re gonna tell you, the band, when they have a problem.
BT – That’s a great point. And I think what that leads to is something that a lot of people don’t think about…is there’s a lot of free services out there nowadays, especially in the last half year that allow you to create a music profile on your Facebook fanpage. And there’s a number of sites that give you really great looking music tabs on Facebook. But going back to what you said, now if you use one of these free services, chances are it’s going to…or most likely is, 100% going to be different from what you’re using on your website. So now you’re going to have to set up another profile and now you’re spreading yourself over many different platforms instead of maybe just focusing really on one. And the more professional you get in your music career, the more either you or someone in your team will be needing to be looking at the numbers of your visitors, your conversion rates, where they’re coming from, how did they find you…and you can’t do a good job of analyzing the metrics of your fan base if…
MB – If your metrics are split across four different platforms.
BT – Exactly. Then it’s just impossible. So that’s where the benefit of somebody like Topspin…where they are a be all and end all solution for everything. I just started using them the past week, for two of my clients. And I’m diving in…and there’s a lot to learn, lots to study, but there’s a great community there that’s ready to help you. There’s some great forums and instructional videos. But for 10.99 a month, for their introductory package, you know, you have access to creating your own digital music store, creating your own physical music store, fan management software for email, and also providing you with the ability to integrate all of those components into a Facebook fanpage. So again, that’s for the more professional artist. But for my recommendation – like I said, so many people ask me daily “where do I start”? – my suggestion would be (after uploading it to itunes and amazon through one of the digital aggregators) setup a Bandcamp page. In half an hour it can be done, it’s not complicated. You can integrate those widgets into your website. And then either – like you mentioned – go through one of those Spreadshirt or Zazzle or Cafepress to at least get some merchandise available to anybody that might want to do it. And then signup for a free email account database as well. So I mean that could be through Reverbnation has one…
MB – Mailchimp, Constant Contact…
BT – and Fanbridge, Fanbridge is phenomenal. Now some of these also, when you sign up for them, again they have a facebook integration component for your music page as well.
MB – And you know, I think this gets into a really important point. Facebook commerce, social commerce is becoming, this year, is really the buzz. It’s big, it’s… you know, a lot of people, a major companies are investing money in developing technologies to let you sell directly inside Facebook. Not the “click a link in Facebook and leave Facebook to go to your store to complete your purchase” but the entire purchase happens inside Facebook. And on top of it, it has Facebook social sharing applications, meaning fans can share that t-shirt from the store on their wall, and other people can buy directly from the wall. There’s very interesting things happening, and you should really be thinking about that now. Because I’ve been doing e-commerce for 12 years for bands, and the old way used to be – you built one store and you put links and you tried to get traffic everywhere out on the internet to come to that one store. Things are sort of changing now, because you’ve got, you know, over 600 million people hanging out on Facebook and not leaving. You need to put your store where the fans are. But that means, does your e-commerce solutions let you have multiple stores that are all working off of the same backend. Which is really important. So…an order that’s placed on Facebook goes into the same order processing as an order that was placed off of your own website. You know, it draws from the same inventory, the same system…so you don’t have to maintain different stores.
BT – You touched on something…just talking about the ecosystem of Facebook and how e-commerce is becoming much more prevalent in that world. Facebook made an announcement a few days ago which I think is going to have huge ramifications to how we look at e-commerce within Facebook, you know, a year from now. I think it’s going to be vastly different. And what I’m referring to is the new “Facebook deals” program that launched. Facebook deals is what they hope to be the Groupon killer, where it’s online digital coupons. Now the thing is, is that…I mean it only launched in 5 test cities. But guaranteed a year from now it will be everywhere. But the way that Groupon and Grouster and all these other deal-by-day services go, you give them your Paypal, your visa account, you buy the coupon and badabing, there you go. You’ve got your coupon. Well with the new Facebook deals, you do it through Facebook credits. So now Facebook itself is…
MB – …Coming up with their own currency.
BT – Right. So now, all of a sudden they’re gonna be… who knows? They could be an Amazon killer in some regards. Because Amazon, a huge chunk of Amazon is …people giving their goods to Amazon to sell on their behalf. So who knows? I mean, a year from now you might be selling your music and goods through a tab on your Facebook profile for Facebook credits.
MB – Yeah. You do have to watch what’s going on on this, this is all developing so fast right now. And I will just throw my two cents in – nobody in the past has really been able to successfully launch a system that had their own credits and their own currency that people really adopted. It’s adding another level of “okay, here’s my credit card number…I’m now going to buy credits, and with those credits I’m going to buy merchandise.” It’s something that never has really taken off in the past. Facebook though is a complete different beast, and they may have the momentum and the size and the leverage to make it happen. So watch what’s going on. But I think right now, you just need to be thinking about how can you sell your products and get your Facebook fans to promote your products, because…an endorsement by your fan means A LOT. You have one fan who posts on their Facebook wall that they just bought your new t-shirt and how cool it is, that’s the best advertising you can get.
BT – oh yeah. I think…yeah… we’re probably at our limit…
MB – Definitely.
BT – I think the whole summary of everything we’re talking about is… regardless of where you and your music are at, you need a strategy people. You need a strategy! That’s all it comes down to. Don’t rush into everything, anything. And don’t just start clicking…
MB – Don’t sign up for every program that’s out there.
BT – Just put some though into it, do a little bit of research, look at the options out there.. I mean, lets say there’s 10 big players, you know… so it shouldn’t be that overwhelming. And you can click on my blog, on Michaels blog, you can go on Hypebot, Music Think Tank… there’s so many different sites that talk about all of these services everyday, so get educated, create a strategy for yourself… and best of luck with your e-commerce endeavors.
MB – Yeah, definitely. You need to be thinking about selling, and selling more than just your music. I’ve got a friend who says “bands are t-shirt factories.”
BT – Exactly. So that concludes episode 7 of the Music Biz Weekly Podcast. Thanks for tuning in again everyone, we really appreciate it. I’m Brian Thompson from Thorny Bleeder.
MB – and I’m Michael Brandvold from Michael Brandvold Marketing.
Transcriptions done with assistance from Tak from The Pawnshop Manual. Go check their music out at www.thepawnshopmanual.com.
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