The way to generate a profit with a Bandcamp vinyl campaign is to raise more than the minimum campaign goal. Hitting the goal ensures records are pressed and sent to your fans (with extras, of course, going to you). The more you exceed the goal, the more profit you’ll make.
You’ll want to do everything you can do to 1) get as many people to pledge and 2) increase the average pledge amount. Higher pledge levels are a great way to increase the average pledge amount.
To illustrate how this works, let’s look at three different scenarios. The costs and pledge levels are based on a typical 12-inch vinyl pressing.
- Scenario 1: you raise 50% more than your campaign goal (i.e., you raise 150% of your goal)
- Scenario 2: you exceed your goal by 100% (i.e, you raise 200% of your goal)
- Scenario 3: you raise 500% of your campaign goal. (In this last scenario, the campaign qualifies for volume discounts.)
|Scenario 1||Scenario 2||Scenario 3|
|Bandcamp Revenue Share (15%)||$653||$870||$2,156|
|Payment Processing Fees (4%)||$174||$232||$576|
|Your profit as percent of total raised||28%||41%||58%|
|Pledge Levels||$25, $40, $80||$25, $40, $80||$25, $40, $80|
|Pledge Distribution||110 / 20 / 10||120 / 50 / 10||480 / 40 / 10|
Your profit is what remains from the funds raised after deducting production costs, revenue share, and payment processing fees.
Note in Scenario 2 how the comparatively larger profit is mostly accounted for by the greater number of records sold at the middle price tier. This illustrates why attractive pledge levels are so important.
In the last scenario, Scenario 3, the artist makes much more profit because the total raised by the campaign is higher, and also because the per-unit production costs are lower, since volume discounts apply. (There are volume discounts rates for runs of 500 records, 1,000 records, and 5,000 records.)
If you need more information about profit and how to estimate it, please ask — your vinyl rep can help.