Related pages: CD basics, types and standards • CD mastering, packaging and release

CD costs and prices
mail order, cost breakdown and calculations

CD mail order costs

Here’s a rough guide to CD mail order costs and working them out.

Duplication starts at less than £1 a CD depending on:

The detailed example on this page allows £1.50 which is probably the most you’d pay for a low volume, full colour job. If you’re pressing a high volume (thousands) and it’s not urgent you could pay half that. There’s more about duplication in CD release.

I weighed the different packing examples and got them priced for postage in 2010. This is just an illustration, you may choose other options. I allow for a light case by First Class post (80p post and packing).

Digipak or light CD sleeve mail order

Digipaks and other light cases are more expensive to buy than standard CD jewel cases but cheaper to post, although wallet sleeves are cheapest all round. You can also get mailers cheaper than this (the cheapest I found is about 6p CDs, post and packing).

CD duplication(worst case)£1.50p£1.69
CD mailerMailLite kraft bubble pack18p
Compliment slipprinted1p
PostageUK post (2nd class)
up to 100g, 25mm thick
UK post (1st class)
up to 100g, 25mm thick
International surface mail
small packet up to 100g

Standard jewel case mail order

The standard jewel case is the cheapest rigid case but the most expensive to post (again, you could use cheaper mailers).

CD duplication(worst case)£1.50p£1.93
CD mailerjewel case card box42p
Compliment slipprinted1p
PostageUK post (2nd class)
up to 250g, 25mm thick
UK post (1st class)
up to 250g, 25mm thick
International surface mail
small packet up to 150g

There’s quite a range of packaging, mail order and payment methods. You can find a lot more about packaging options online. Try a small sample to start with, you can always change your mind when you see how it works. You only need to commit to volume for the final pressed CDs.

The Royal Mail web site has details of other postage prices including Air Mail.

CDs, post and packing

Here are some links to more information about CDs, postage and packing choices.

CD duplicationcost variesHere are some useful sites for CD options and
Self-sealing corrugated paperless than 10p per CDI have had CDs mailed in this and you can get a crimper to make neat edges.NoviaWrap
Bubble pack envelopedown to 7p per CD in bulkI have used Sealed Air MailLite Kraft CD mailers (bubble-wrap liner and self-sealing strip). They do a range of sizes and you need about 150mm x 210mm if you can’t get the CD (UK)
Cardboard CD mailerabout 25p per CDAuctionpax has a wide range of stationery gear including Jiffy bags and fitted cardboard CD

Setting a DIY CD price

CD cost breakdown

To decide an all-in price you could add up the costs and guess a margin. This example should help you see the effect of changing various slices of the pie.

First list the costs you think you might need to cover. Whether you allow for these examples or not depends who’s involved and the expected volume of sales.

Some costs you need to cover in a CD price
CD duplicationSee cost details
Artist incomeThe equivalent of the artist’s points. May be subject to Income Tax
Label incomeThe equivalent of label earnings. May be subject to Income or Company Tax
One-off costsComputers, software, instruments, project recording costs, online payment setup, etc.
Running costsWeb site (cost details), annual payment gateway fee, consumables, accountant, MU fees, etc.
MCPS8.5% of wholesale price (PPD) or 6.5% of retail price before VAT
Writer incomeCovered by MCPS if the writer is separate—may be subject to Income Tax
Publisher incomeCovered by MCPS if the publisher is separate—may be subject to Income or Company Tax
VAT17.5% added to the retail price (UK sales tax)
Mail orderPost and packing, see cost details
Credit card commissionA percentage of the retail price after VAT, for using an online card system

Some one-off costs and running costs might be paid out of writer, artist, label or publisher income. This example will assume the artist is also the performer—otherwise allow for session payments or points. When you’ve got rough cost headings you can work out a price.

We’ll make some assumptions to work out a price for direct (mail order) sales:

These are just assumptions for this example. You might want to do some things differently.

CD cost calculation

Cost breakdown 1NoteTax
£1.50CDpressing, printing, case, inlay, bookletclaimable against tax
25%artistincometaxable income
25%labelincometaxable income
20%other coststowards one-off and running costsmay be claimable against tax
6.5%MCPSif you’re the writer and publisher you keep thistaxable income if you keep it

A simple way (but not the only way) to work out CD costs and MCPS would be:

Step 1add up the money amounts£1.50£1.50
Step 2add up the percentage amounts25 + 25 + 20 + 6.576.5%
Step 3find £1.50 as a percentage100% − 76.5%23.5%
Step 4work out the CD total£1.50 x 100 / 23.5£6.38

You can use the same basic idea to work out known other money amounts and percentages. As you can see the numbers you choose can make a big difference the result and you can tweak them to get a price that feels right. The benefit of using headings like these is you’ll be able to check how much of your total is allocated to each part.

This example assumes 20% general one-off and running costs, and if you don’t have evidence for that it’ll become taxable as income too.

Cost breakdown 2NoteTax
17.5%VATif your annual turnover is over £66,000offset against VAT you pay out
Step 5add 17.5% to your overall CD costs£6.38 + (£6.38 x 0.175)£7.50

The price you charge is up to you but be sure tax is covered. At this price you’d need to pay VAT on about 10,000 CD sales a year, so keep 17.5% safe unless you’re certain you won’t sell that many.

The last stage in this example is to add the online credit card and posting costs.

Cost breakdown 3NoteTax
£0.80post & packingmailer, stamp, enclosures (see above)claimable against tax
4.5%credit cardusing WorldPay commission as an exampleclaimable against tax (Tax relief)
Step 6add post & packing£7.50 + £0.80£8.30
Step 7add credit card commission£8.30 + (£8.30 x 0.045)£8.67

You will already have paid or accounted for VAT on your post and packing materials. The credit card commission will be charged on the whole amount you collect at the point of sale.

Here’s a summary of this DIY mail order example with all the amounts worked out:

Record labelManufacture£1.50CD and packaging
Artist royalty25%£1.59covers some other expenses
Label share25%£1.59label may be separate
Costs20%£1.28includes one-offs, running costs
DistributionDistributorno Distributor
PublishingMCPS6.5%£0.41mechanical royalty (6.5% before VAT)
CD sub-total£6.38 
Sales taxVAT17.5%£1.12on the price before VAT
CD after VAT£7.50 
RetailPost and packing£0.80see postage examples above
Credit card4.5%£0.37on the amount charged to the customer
Total cost£8.67  
Pie chart diagram of UK CD cost breakdown: pressing, distribution, retail, royalties and tax

Converting costs before and after VAT

Here’s how to add and remove VAT, and how to work out what the VAT amount is when it’s already included in the price.

Converting costs before and after VAT
A.To work out VATadd 17.5%
B.To remove VATmultiply by 100 / 117.5
C.To work out VAT after it’s been addedmultiply by 17.5 / 117.5
block diagram showing VAT, VAT-inclusive total and total for retailer

Use enough decimal places for the precision you need—truncating fractions of pennies is OK (unless you multiply those amounts by a very big number later on).

An example of high street CD costs

By way of comparison a £15 high street CD breaks down rather differently. There isn’t a standard or average breakdown—a lot depends on the artist’s deal with the label and the number of records sold.

Record labelManufacture£0.50CD and packaging
Artist royalty£0.50 
Label share£3.12 
PublishingMCPS£0.73mechanical royalty (8.5% of PPD)
CD sub-total (PPD)£8.60 
VAT£2.23sales tax
Pie chart diagram of UK CD cost breakdown: pressing, distribution, retail, royalties and tax

Distribution costs vary from 25%-30% down to 12% for a hit, or as low as 5% for a big Major label artist.

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Related pages: CD basics, types and standards • CD mastering, packaging and release

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