Are Music Shops Ripping Us Off?
Comment by Dude;”I support them but I also wonder how persons not involved in the music creation stage can earn an equal amount the artists. A CD is sold to records stores between $20 and $25 and then they retail $45… this huge markup policy needs addressing”
Dude made a very pertinent comment to my Music shop article below and I wish to address the “huge mark up policy” as he has requested.
Dude’s comment is reflective of a line of thought which also exists in the entertainment industry, music shops take their cds make so much money off them while they get paltry scraps in return.
Of the $45 selling price which was correctly quoted, 15% of that is Value Added Tax, VAT that goes to the government. Lets also consider that apart from VAT shops also pay regular taxes on revenue generated which means out of the remaining balance more still goes to the government, that why I could never understand it when our previous PM Arthur complained we sold cds so high when what helps to contributes to that is duties and taxes, that would be something PM David needs to address.
The normal practice is for shops to add on a 50% mark up on any thing they sell; Do you think that is too much?
Well I don’t think so and I will tell you why.
From 1993 to 1998 Madd operated retail shop “Rue Rue” upstairs Mall 34 for “Music fashion and U”.
Between the high rents, NIS payments, advertising costs, staff costs, utility costs, theifing etc IT WAS FINANCIAL HELL.
My challenge to any entertainer who thinks music shops make SO MUCH money, well you open an outlet and make the money then,.
There’s a reason why they don’t and there is a reason why I HAD a music store and don’t have it any more.
When you look at the proliferation of operating expenses a shop incurs that must be recouped from a cd sale it more than justifies the mark up.
Thanks for making your comment Dude….
Boyce left the computer….
If during the reading of this blog there is any thing I might have written which might have incensed or offended you, GET OVER IT! There are many things I read and hear in the media on a daily basis that I don't like either. SO DEAL WITH IT! You are welcome to leave your comments though. Make sure and come back yuh hear !!!...
April 10th, 2008 at 7:55 pm
compact disk
The customs tariff
classification: 8524.99.10
IMPORTED CDs
customs import duty: 45%
environmental : levy 2 %
vat 15%
Imported CD COST $ 100.00——DUTY 45.00
E. LEVY 2.00
VAT=15% of the sum of the above: 100
45
2
- ——–
$ 147.00
15% of 147 = 22.05
you pay 45 +2+22.05= $ 69.05
a little complicated but you pay 69.05 to the goverment on CDS costing 100.00
so for every $100 -you pay $69.00
i am charging $ 700.00 for this lesson
April 11th, 2008 at 12:12 pm
Interesting…very interesting. I always wonder how music retail stores SURVIVE with the high retail costs generated by the customs import duty as mentioned by Asiba.
Now the reality is the demand does not equate with the supply. The demand is around $20-$30 that people would pay and the retail costs/supply is around $45.00. Pirates selling the other genres(dancehall reggae/oldie goldies/rap/hip hop) in town for 10BDS-20BDS and worldwide is 10US or even 5US.
Now thats why I would buy a seperate computer and a seperate printer to burn/label my own music I paid to produce…then sell them to the public from myself personally for $25 and go to CRS for distribution outside Barbados and maybe to the local music stores.