If you’re a new musician or haven’t yet released your first independent CD or vinyl, you may not have come across the term ‘sale or return’ (Or SOR for short). In this article we will be looking at what a sale or return deal is, an example of a sale or return deal, and how to get one.
There are two types of deals you can get when trying to get your music into record shops, a ‘money upfront’ deal, and a sale or return deal. With a money upfront deal, a record shop will buy your CDs from you and give you the money upfront. They then re-sell these CDs for an increased price, keeping all the money they make from them. As the CDs now belong to the record shop, they can sell them for any price they want or even give them away for free if they so choose. While many musicians like upfront deals as they make instant bulk sales, this type of deal is becoming more rare for independent musicians. The only way independent musicians are really seeing upfront deals is if they have a proven record of selling large amounts of CDs, or if they go through a distributor (We’ll look a bit at distributor deals in this post too).
If you don’t get a money upfront deal, the other option is getting a sale or return deal. This is when you give the record shop a set amount of units to sell, but instead of them paying you upfront for these CDs, they take them in and give you money for however many units they sell. The rest of the CDs they don’t sell after a certain amount of time they give back to you.
An Example Of A Sale Or Return Deal
Here’s an example of a sale or return deal. Let’s say a record shop asks you to give them 100 units of your CD which they will sell for £6 per unit. Typically, they will give you half of the selling price for each unit sold within a set period of time, say 3 months. So let’s assume your CD sells 59 units in this shop by the time this 3 month period is over. For each of these 59 units you will receive £3, and £3 x 59 = £177. This means you will receive £177 plus the remaining 41 CDs that didn’t sell once the 3 months are over.
An Example Of A Distributor Deal
If you were going through a distributor however, the deal may look more like this. A distributor will have a listen to your CD and see if they want to distribute it or not. If they decide to, you will sort out how many units you’ll be giving them as well as how much you’ll both get per unit. Let’s say the distributor says they’re going to charge shops £3.50 to buy your CDs from them. Usually the distributor will take £1 for themselves for every unit they sell and give you the remaining £2.50. So if they take in 100 units and get 75 of those into shops, you’ll get £187.50 and the remaining 25 units they couldn’t get into the shops for you.
This differs from a SOR deal in the sense that anything the distributor gets the shops to take in they’ll get paid upfront for. This means you’ll also get paid upfront once the distributor has done their job, whether or not the shop sells your CDs. Notice that in this example the distributor is charging the shop a higher price then what you would get in a SOR deal. This is because A) Distributors have built up a relationship with the shop and are probably known for giving the shops only the best material, and B) Because once the shop have the CD they can usually sell it for any price they see fit.
Keeping Your Music In Shops After The Sale Or Return Deal Is Over
Sometimes you can get the shop to extend the period of the SOR deal, but if you or the shop don’t think any more units can be sold it may be best to take the CDs out and try and sell them elsewhere. It’s a good idea however to keep a few copies of your CD in the more popular shops even after your hype has died down, and there are a few good reasons for this:
- It’s Good To Have A Real World Presence.
Many musicians forget that not everyone has access to a computer. While it’s important to have your music available to buy online, giving people the option to go to their local record shop and pick up a nicely packaged copy of your CD is also important. So leaving maybe five copies of your CD in the more popular record shops (After your sales have slowed down and your SOR deal has expired) will mean people still have access to your music in a variety of ways.
- Being In Shops Provide Credibility.
Having your CDs for sale in shops makes your music more credible to some people, importantly to many key industry figures you may come along. Many record labels for example are more likely to sign a talented person who they can see has put the work in. If there’s two equally talented musicians, one having released their CDs into shops while the other hasn’t done much, which one is the record label more likely to sign?
When you release your music into shops you’re more likely to get access to a better quality of collaboration as well. If you can show producers and vocalists you can get them free exposure by getting them on your CD (Which will be going into shops potentially worldwide), you’ve a much higher chance of getting good collaborations then if you were just releasing your music on your MySpace page.
- You Get A Back Catolog Of CDs.
As you release more CDs you’ll obviously gain more fans (It is possible for the number of your fans to wither away as you release more material, but that’s an issue for another post). These new fans may want to hear some of your earlier releases, meaning you could end up selling copies of previous CDs months or years after they’re released. Some record shops bunch each musician’s CDs together as well, so when someone’s looking for your current release they may end up stumbling apon some of your other releases and buy those too.
How To Get A Sale Or Return Deal
The great thing about sale or return deals is they’re easy to obtain. This is because there’s no risk to the record shops, they can simply take you CD in, and if it doesn’t sell they don’t lose any money. If it does sell however they’re in profit.
Most of the time it’s as easy as ringing up a record shops and arranging a time to come and see them about getting your CD in their for a SOR deal. You then go in there, show them your CD (They may want to hear a sample of your music and / or hear what promo you have or will be doing) and they’ll let you know if they want to take it in or not. If they do you’ll have to fill in some quick paper work which includes details of how many units they take in, the price you’ll receive for each unit sold, and when to come and collect the money / remaining CDs by. You’ll also need to fill out your contact details such as your name and address in case they need to contact you for any reason. You then give them the CDs and that’s it, you rinse and repeat for any shops you want your music in.
Sale or return deals are probably the easiest way of getting your music into shops, and can be a good way for independent musicians to get their music to dedicated music buyers. I hope this article has giving you a good insight into how sale or return deals work, if you have any questions or anything to add please do so in the comments section below.