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April 27, 2013

Digital fulfillment options (, , , )

by fluffy at 5:46 PM

Right now there is a renaissance in digital goods fulfillment options, with plenty of startups hoping to get the long-tail microtransaction stuff going in their favor. Some of them are oriented more towards music, while others are oriented more towards eBooks or other sorts of things. Here's a quick comparison of a few of them (Bandcamp, CDBaby, Gumroad, and Simple Goods) for those who might be interested in such a thing.

Bandcamp

Bandcamp is probably the best-known digital fulfillment option for musicians out there. It's been around for a while, and has a lot of people selling through them.

Their pricing structure is pretty simple; it's a 15% flat rate on digital items (which drops to 10% if you make a certain amount but if you're reading this you're probably small potatoes like me), and unlike most of these services they set payments up such that the artist gets the cut immediately; they only take their cut after you reach a certain threshold. Unfortunately, your cut is further diminished by PayPal fees, which are... confusing, to say the least, but pessimistically assume that you'll be losing 10% of your cut to PayPal. So really, the overall cut is more like 23.5%.

Bandcamp does have some pretty big benefits, though:

  • They manage all your metadata, album art, content conversion, etc. for you — and they do an excellent job of it
  • You can include other digital goods with full-album purchases
  • They support name-your-price pricing
  • You can easily sell download cards at shows (and their pricing on that is incredibly generous)
  • They also have a shopping cart for other merch, although they don't handle any of the fulfillment there (and they charge a 10% merchant fee in addition to whatever Paypal takes out)
  • You can sell singles separately from albums, if you like, and also provide a free preview online
  • They're always building interesting social-network/discovery things which are pretty neat and can help drive further sales

Minuses:

  • They are only for bands to sell music and physical merch (so, not at all useful for eBook sales)

CDBaby

Probably the best-known indie band distribution channel, but seem to be losing market share to Bandcamp in terms of actual sales (at least from my POV, but of course I can't speak authoritatively on that). They're the original web-based indie music store, and are great for getting your stuff placed in more mainstream retail channels. On the other hand, those mainstream retail channels probably don't serve you very well if you're the sort of musician who is looking to sell independently anyway.

Their pricing depends on the fulfillment channel; basically they charge 10% of what's left after the retail channel has taken its cut (so, best-case they're only taking 10% when it's through their own channel, but for iTunes, Amazon, etc. the total cut is a whopping 37%). They also take $49 up-front for listing your goods to begin with.

Pluses:

  • Get your physical stuff available at the vendors who have a partnership with CDBaby (does anyone use that, though?)
  • Get your stuff listed on iTunes, Amazon MP3, Spotify, and a bunch of other streaming/download services
  • Also have your stuff on CDBaby's own download service
  • They also do merch fulfillment, although it costs a lot

Minuses:

  • They used to be the vanguard of independent stuff, but now they're pretty much just the mainstream model except a bit more open to independents
  • Again, music-only
  • As they lose relevance they get scummier and scummier, and really I only include them for the sake of completeness

Gumroad

These folks are pretty new, and are purely a digital goods fulfillment service. You upload your file and a picture that represents the file, and you set a price, and they take $0.25 + 5% per transaction. They are simple and no-nonsense and really easy to deal with.

Pluses:

  • Simple, no-nonsense, easy to deal with
  • You can provide your own storefront if you want, by just providing simple links to the items to be purchased
  • You can sell any DRM-free digital good (music, ebooks, etc.), not just music
  • Any single file can become something you sell
  • Payments are via direct deposit/ACH transfer, so no additional fees from Paypal
  • And their cut is way lower than Bandcamp's
  • They also support name-your-own pricing

Minuses:

  • It's up to you to do all the content preparation and packaging (they don't handle metadata, lyrics, transcoding, format validation, etc.)
  • Because of the above, for music it's good for selling individual singles OR entire albums, but you have to set things up individually on a per-item basis
  • No preview mechanism, so you'll have to provide that on your storefront if you want to do such a thing (and that's a whole other level of pain to have to deal with)
  • No discovery/social aspect
  • No physical sales channel either UPDATE: At some point they did add physical goods capabilities. You still have to self-fulfill (like on Bandcamp) but it's quite reasonable.

Simple Goods

Pretty much exactly the same as Gumroad, except their pricing is 2.9% + $.45. (Which, at the time of this writing, they erroneously display as .45¢ on their site, which is a major pet peeve, although when I brought this to their attention they said they'd fix it.) So, for items priced under $9.50, they're a little more expensive.

Pluses and minuses are the same as Gumroad, so no sense repeating them here.

Summary

For selling DRM-free eBooks, the choice is obvious: if it's under $9.50, put it on Gumroad, if it's over $9.50 put it on Simple Goods.

For selling DRM-free music, the best choice is probably to list it on Bandcamp (and maybe CDBaby if you want to spend the money up-front and get it on the more mainstream distribution channels).

Comments

#16845 fluffy 10/22/2014 11:02 pm
    So I just came across this article again, and I decided to check up on Simple Goods. They've completely changed their pricing structure; now they charge a simple flat commission, but they also charge a monthly fee, which goes up with the more products you have available. That makes sense from their POV but it also makes it not very competitive with Gumroad unless you're selling a LOT of stuff.