Online and other payment options
credit cards, dedicated accounts, downloads

Mobile payment

When I started this site the big headache for DIY was taking credit card payments online. Now there are tools for almost every kind of payment, including by cellphone, but this picture is changing almost daily.

Selling by mail order online

You can sell CDs through a third party (Online music distributors or local independent shops) but it will cost up to 50%, less for downloads. If you sell CDs on your own site or at gigs you don’t pay that retail markup. You could accept cheques by post but here’s how to accept payments online.

Most online music sales are still CD mail order (downloads account for about 35%). Online mail order works like traditional telephone and postal systems; the only difference is the browser. There’s a lot of hype about new ways of paying (micro-payments, digital cash and so on) but debit and credit cards are the standard today, just like ordinary mail order.

Online payment services

Credit card payment gateways

Web payment is rather expensive to set up and run, and not very flexible. Cash used to be the most expensive kind of retail money (it costs about 6% to handle) but online card payments can cost the same or even more. They should be cheaper and hopefully prices will come down.

The benefits of credit cards are:

Small online retailers normally use a virtual swipe system to accept credit cards. This ensures they don’t handle card data or transactions directly. These card systems are called secure payment gateways and there are many suppliers. Unless you’re selling in volume you won’t want a separate business account or a merchant account. Business account charges are high and some gateways make things worse by requiring a merchant account (on top of high fees). This forces you to pay higher bank charges.

Here are some popular credit card gateways for small businesses.

Online payment gateway

Online payment solutions such as iTransact and DataCash are aimed at bigger businesses.

Dedicated seller accounts

Dedicated seller accounts are an alternative to credit card gateways—the most common in the UK are eBay PayPal and NoChex. These allow you to accept credit card payments.

Online seller account

PayPal Payloadz supports payments for downloads online and is more suitable for direct music sales.

Some questions for payment services

Terms and conditions for online payment services have become a lot simpler but they do change frequently. Here are some angles you might want to check.

The supplier sites are very good these days and I recommend you browse the 6 above as an introduction to online payment services.

The main ways to sell your music

This is a summary of the main ways to sell your CD online and offline.

1. Download sales
Type of outletMain featuresMore info hereExample web site
Branded music retail sitewell-known, trafficDigital distributionNapster—mainly deals with Majors
EMusic—only deal with indies
Apple iTunes—deals with both
Digital distribution aggregatorfeed to many sitesIndependent aggregatorsIODA
2. CD sales online
Type of outletMain featuresMore info hereExample web site
Branded music retail sitewell-known, trafficCD Baby
Branded general retail sitewell-known, trafficeBay
Amazon Marketplace
Amazon Advantage
Your own sitewhatever you likeMore DIY artist sitesChick Atkinson
Low volume fulfilmentsell copies from mastersCafePress
Low volume DIY portalsell copies you supplyCD Baby
Merchandise portalshopping by
Host Baby
Community siteestablished visitorsOverplay
3. CD sales offline
Type of outletMain featuresMore info hereExample
Gigssell to your fansSquare credit card reader
Indie CD shopssell CDs you supplyUnsigned Guide 
Mail order CD warehousesell CDs you supplyUnsigned GuideTownsend Records
High street shop countersell CDs you supplyLocal co-op scheme?(Your high street)
Mainstream distributiondistribute CDs you supplyBBC Introducing
P&D (pressing and distribution)fund pressing and distributeBBC Introducing
Norman Records
License to a bigger labeldistribution and promotionDamien Rice

You might think some of these options are beyond you, but artists who made their own records have used them all. High street shops sometimes take CDs from local bands. It helps if you’re well-known locally and friendly with the staff but if it will sell they’ll probably take it (generally charging about £5/disc). The last three are pro distribution but DIY artists have broken through with their own CD, as Damien Rice did. You need to have a solid CD with wide appeal to sell in the mainstream.

The main ways to take payment

This is a summary of the main ways to take payment for your CD online and off, with links to more information. Obviously, if a third party retailer collects payment you won’t need these.

Payment typeExampleWeb?
Credit cardWorldPay WorldDirectonline
Download paymentsPayLoadzonline
Online paymentsNoChexonline
DonationsPayPal Donateonline
Mail order chequeoffline

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