Publication:
MaximumRockNRoll

Author:
Felix Von Havoc

MRR #228-costs of running a diy label
A few years ago I wrote two columns in Heart Attack about women in punk. I ran down what I thought were the best/most influential female and female fronted punk bands. Most American punk kids know Bikini Kill and Spitboy, and I mentioned bands like Sink, Gaia, Gash, Livin' Sacrifice, Tozibabe and all the crazy Japanese bands on the Women's Liberation comps. However, I have recently been introduced to a band that I think totally rages. Vulpe SS are a Spanish band from the early 80's and I know very little about them. Munster re-issued their two song 7" in a special limited edition box set type thing and I was also able to track down the original. This is smoking fast punk verging on hardcore. Definitely a new favorite and right up there with Gash or Bikini Kill. All I know about this band comes from the back of the Bloodstains Across Spain LP. Says something like they played a few shows and appeared on TV and riots ensued. They had to break up due to the controversy and not being able to play anywhere due to the riots. Sounds fucking punk to me! But the song on the Bloodstains comp is the B side and not as good as the A side which you have to get the Munster box set for "Me Gusta Ser Una Zorra" just blazes. Too bad this band didn't record more. Scorching stuff. If you are a fan of all female punk bands in particular this one is worth hunting down.

OK this month I'm going to talk a little bit about DIY economics. Lets get one thing straight. I didn't ever study business or economics in school. I'm not a very by the book sort of person if you know what I mean. I started a record label to spread punk rock music not to make money or become a businessman. As the label grew I had to learn a lot of shit the hard way. I sell my records at some of the lowest prices in the business, in fact I've never raised my 7" price in 10 years of doing a label even though postage, pressing, printing etc. have all gone up numerous times. At the rate I'm going I'm practically giving them away, but I can get away with it because I do make money off t shirts, CDs and LPs. One thing that I think a lot of punk kids don't quite understand is what goes into running a small label and distro and putting out records. I have little patience for what I call "DIY extremists" who balk at paying full price for a record or to get into a show. I always have to haggle with these kids. "Dude 3$ is too much, I know for a fact this record cost you less than a dollar to make" So for all you anklebiters who want to tell me how much a record should cost I will lay out some of the costs I run into in running a label. Hopefully this will answer in everyone's mind "why does it cost what it costs" and for those who run a small distro or label they might want to check out a few ways I've figured to save cash here and there.

First there is the vinyl pressing cost and the covers, really these aren't that expensive. In the case of a 7" single you are looking at about .47 cents for the vinyl and maybe 10-15 cents for the cover, depending on how many you press. Maybe 40 or 50 cents for a color or poster sleeve. I've always tried to save money by working in large volumes, pressing 3000 records at a time and printing 5000 covers at a time. Especially with printing after the first few thousand, each additional thousand is a fraction of the cost, like another 60$ or so. I'd rather throw away a thousand covers I never need than have to pay all the set up costs a second time because I didn't press enough on the first run.

But beyond just the costs of printing and pressing there are other one-time expenses. First of all is studio time. Depending on how your label works you probably advance the band some cash up front for studio time, which of course has to be factored into the cost of the record. You can try to save on studio time and Brian from Grand Theft Audio wrote a few informative columns on how to do so. But bottom line is you get what you pay for. Record in a half ass studio, with an inexperienced engineer on a shoestring budget and your record will probably sound like shit. You have to find an affordable medium between a super pro-deluxe studio and your cousin's basement. Over all I think this is the most important factor in how the record will actually sound. After you get the master tape/CD there is mastering costs, about 175-200$ for a 7" record. Then at the pressing plant there are plating costs for making the mothers and stampers for your record. After the records are pressed there's shipping from the plant. If you're lucky sometimes you can stop at the plant when your band is on tour and pick up the goods but most of the time you'll have to add those shipping costs to your total cost. After that you probably want to put your records in a plastic sleeve. You can order these from a place like Something Special or Bags Unlimited, and then pay the shipping on that too. Or if you are really adventurous you can have a local polybag company make your bags for you and go pick them up yourself. This is waaay cheaper than ordering sleeves from Bags Unlimited. For years I was getting 50,000 plastic sleeves at a time made by a local company. I then sold them to local labels and stores at less than what they were paying Bags Unlimited. And no shipping costs. Unfortunately that place went out of business a few years back. If you run a label and there are other labels in town, this is something to look into if you can find a local supplier.

So now we have our records with covers in plastic sleeves. We've still spent only about a buck on these suckas thus far. But now we have to add the cost of royalties into the mix. Depending on how your label works you either give the band cash, or a percentage of the records. Giving the band 15 or 20% of the pressing is a better deal for the band if they can sell them on tour and at gigs for the full retail price. If the band broke up or never plays out, you will probably have to pay them cash, and that just drove up the cost of your records again.

Now we start to get into what business school types call the indirect costs, the overhead of your record label. For most people who run DIY labels this is a labor of love, I've never met anyone who paid themselves for work they did on a label. All anyone ever asks is some free records now and then and maybe to get to go on tour with one of their bands or something. Most guys I know who run DIY labels all still work full time jobs, lead super simple lifestyle and pour all their cash into their labels. I think it's about the same for me, Ken from Prank, Ken from Sound Pollution, Jon from Dead Alive, Max from 625, Martin from Lengua Armada, Jeff and Athena from Six Weeks, Anton from Underestimated, Joe from Youngblood, Tomppa from Fight, and many more DIY label cats. If you've ever met any of us we are a lot alike. Reclusive record nerds who spend hours in front of computers and boxing up records and never get much more than a few free 7"s out of it. Ain't nobody getting rich off DIY hardcore and if any of us started to pay ourselves even 5 or 6 bucks an hour for the time we put into our labels it would drive the cost of the records up to 4 or 5$ for a 7" pretty damn quick. So lets look at some of the time and money that stacks up.

First there's a lot of time on the phone with the bands, the studio, the printer, the pressing plant etc. getting everything sorted. Then there's hours of putting the records together (sometimes you can get the band or some friends to help you with this, more often than not it's me alone staying up late listening to records and putting vinyl in sleeves) You can pay the pressing plant to put your records together but then you have to pay shipping twice on the covers, and it's not very DIY. I like to think that I personally touched every record I sold. That's a little weird I guess but if you felt as strongly about punk rock as I do you'd understand what I mean. After the records are put together there's storage. For years I ran my label out of a walk in closet, and later out of my bedroom. But eventually you will amass enough records and need so much work space that you will have to have some sort of office/workshop. If you're lucky maybe you can do it in your basement, but most likely you will eventually have to rent an apartment or house bigger than you actually need to house your label. If you're label gets much larger and especially if you start printing shirts for your bands and running a distro then you will probably have to rent some sort of warehouse or loft space. If you are lucky you can do like me or Gavin of Stickfigure and live there too. But if not you'll have to pay rent twice, once for your home and again for your shop. Then you'll have to start commuting between the two which means more time and gas money. Now you are starting to take on monthly overhead. You will have to come up with the money each month to pay rent, heat, electricity, phone etc. You are also going to have to buy or build a bunch of work tables and record shelves unless you get lucky and dumpster something or boost a bunch of lumber from a job site. You are probably going to have to buy a fax machine, computer etc. Although most people have a personal computer anyway these days, you will probably find yourself buying bigger, faster more expensive machines more often once you start using it for work every day. Don't forget your monthly internet fees. Most labels will want a website which means either spending a lot of time building it yourself or paying some whiz kid to do it for you. Then there's more monthly overhead with hosting. If you want to take online orders there's a bunch more expense for the software, the monthly and per transaction fees and the fraud prevention services you'll need to stop the Indonesian kids from trying to order with stolen credit cards. As your label grows you'll probably need help with things like mail order and this means employees. If you are a punk who's worked shit jobs all your life you will probably want to give your employees a decent wage which quickly adds up to more weekly overhead. Once you start paying taxes and shit your costs will increase further. I'm of course not crazy about paying taxes and I try to get out of as much as I can, but I got audited once already and I'm not too crazy about being fined again or going to jail, so I try to play it cool with the Man.

One of the biggest costs is shipping, and the post office really nailed us on international shipping last time they raised the rates. After pressing and printing shipping is my biggest cost, last year I spent just over 12 thousand dollars on postage and UPS shipping. Plus your biggest use of time will be actually pulling, checking and packing orders then putting postage on them, logging everything somehow for your records and taking it to the post office or UPS.

There are hundreds of day to day chores at a record label beyond simply packing up and mailing out records. There's going to and from the post office to pick up and drop off mail. Trying to track down missing orders. Dealing with lost/damaged items and replacing them. All those lost and damaged records come out of your bottom line and drive up your costs more. Most record label types eventually wind up buying a van to haul all this stuff around in. If you're lucky you might be in a band already so the van is already a necessity. But you aren't going to get away with driving an economy car too long hauling boxes of record covers and stuff around. Now watch you van guzzle gas and further eat up the huge profit margin on the 7" you just put out. If you get involved with trading there will be hours of mailing and emailing other labels about trades, the killer postage to Europe and Japan where most of your trading partners will be, and of course more lost packages in the mail. You might have to start dealing with air freight which means long drives out to the airport, running around to customs offices and paying customs tax and air freight shipping as well. You are probably also going to want to give away a stack of 7"s to zines for review and maybe also to radio stations for airplay. Each of these records and all the ones you give to your friends are more you need to subtract from the cost of your release. You will also want to put some ads in zines, which means a lot of time spent laying out ads, or hiring someone to do it for you. Then you've got to mail them out, with your promo copies and pay for ads in all the zines that cover your style of music. You might also want to do some posters or stickers to get your label name out there, or to put in the records. I for one really thought getting stickers was cool when I was a bored suburban punk kid ordering stuff out of MRR. Therefore I try to put a sticker in every mail order, and at 10 cents a sticker it doesn't sound like much, but that shit definitely adds up, and when your sticker box is empty you gotta chose whether to get more stickers or put out the next record on time.

Lets not forget office and shipping supplies. I try to boost as much of this stuff as I can from office depot and salvage used boxes from the record store and radio station. Still you are going to wind up buying some envelopes, markers, and a lot of packing tape. Let's not forget cardboard record mailers, the good ones are about 60 cents each. And then you gotta pay shipping again to get them sent to you. You will need these if you sell LPs in small quantities by mail. I think one of the most regrettable aspects of the international DIY hardcore movement is records with bent corners. No one packages their records well so a huge percentage of DIY records these days have all the corners bent, seams split, tops frayed etc. Use heavy cardboard and double box! If your label gets big enough, you will probably have to start paying taxes and other government bullshit, like sales tax, withholding, FICA, work comp, the Self Employment Tax and whatever all that shit is. Basically it means the Man taking money from the Kids, but either way it runs up your overhead of your label.

Another element that sucks, but will happen if you table shows is getting ripped off. Hard to believe backstabbers would do this, but it happens for sure. I got stuff ripped off from my distro at the DS 13 show at the Smell in LA, at the Pist reunion show in New Haven, etc. Look at the insert to the Assrash 7", that kid hanging in the tree stole some patches from Neil. Hang up the fucking punks! Anyway, stolen records are records you can't sell, and that certainly drives up the cost of what's left.

Related to stolen records are distributors who go out of business and never pay you, or people you trade with who never send their stuff, etc. In the past few years Rhetoric, Rotz, Vacuum, Bottlenekk, Profane Existence/Blackened and several other distributors and mail orders have gone under, some owing a lot of people money. This is why I always strive to get cash up front or trade for my stuff. I might ship fewer records, but at least I'm not throwing them away. As Mike of Beer City once said, "If I go broke, I'm gonna go broke with a warehouse full of records." Right up there with distributors who go under are people who rip you off on trades. I'd like to think the DIY movement is based on trust and friendship, but there are a few shitheads like Oliver at Sludge (or whatever alias he's using nowadays) records who take your shit and never send you anything. This especially sucks because not only do you lose records, you also had to pay the cash to ship them. Luckily, in ten years of running a label I've only been blatantly ripped off on trades a few times. Contrast this to Profane Existence who got swindled out of tens of thousands by shifty distro kids who took their zines and records and never paid up. If anyone wants to point to a factor that killed Profane Existence, it's like this "DIY Killed by the Kids" I remember reading Born Against's tour report where they said something like it wasn't the big rock clubs and promoters who fucked them over the worst. It was the well meaning but clueless kids who thought they knew how to put on a show but never flyered or promoted the gig and hired the most expensive PA in town and had 26 bands play etc. The scene is more organized than it has been in the past, but every day kids take on projects they don't have the ability to see to a conclusion and in the process the burn a lot of people who are working hard to support the scene. If I press 1000 7"s and send 100 copies to a distro that goes under, the kids disappear and I never get paid, I just drove up the costs of my 7" release by 10%, not including what I paid to ship the records and the time to set up the deal and box up the records. A few raw deals like that and your DIY release is actually costing you more than your selling price. Also, if you deal with the internet and credit cards there are the super DIY kids who will order from you with stolen credit cards. This is a real hassle, and you will have to pay a lot for fraud protection software and double check everything before you ship. Sound Idea and Blackened both got burned by kids in Malaysia and Indonesia using stolen credit cards, and then they wonder why there is not another issue of Profane Existence or more Doom records coming out?

OK so we now know there are a lot of elements that go into putting out a record and running a record label. Now I know that most DIY purists would argue that no one should expect to make any money off punk at all. That's fine if you feel that way, but even if you expect to make no money (I still don't expect to make any money at running a label) you will still have to admit that there are numerous factors which drive up the cost of a simple 7"s record beyond just pressing and printing. And when you consider that the countless hours one puts into the label start to cut into hours you could have spent working a real job, the time=money factor looms larger and larger to the point where you really have to stop and think about it. Bottom line, running a label is done by punk music lovers who are passionate about the music and culture. Any of us doing the same amount of work in any other endeavor in life would probably become very "successful" by societies standards but chose to do what we do for little or no pay just because we like music, and want a few free 7"s now and then. When you think about the work that goes into DIY punk records are some pretty under priced forms of entertainment. I'm not complaining about the way things are, or arguing for higher prices or anything, just trying to tell it like it is.

Publication Date:
January 1, 1988

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