Your campaign will generate profit if it exceeds its campaign goal. (The campaign goal is discussed in greater detail here — briefly, it’s the minimum amount of money you have to raise in order to press your record and get it shipped to pledgers.)
There are two ways to exceed your campaign goal: you can get lots of pledges, you can increase the average pledge amount by using higher pledge levels, or you can do both.
Let’s look at three different scenarios for a typical campaign:
- Scenario 1: you hit your campaign goal exactly (i.e., you raise 100% of your goal)
- Scenario 2: you exceed your goal by 50% (i.e, you raise 150% of your goal)
- Scenario 3: you raise 500% of your campaign goal. (For this last scenario, it’s illustrative to also assume the campaign gets enough orders to qualify for volume discounts.)
Your profit is what remains of all the funds raised after deducting production costs, revenue share, and payment processing fees:
|Scenario 1||Scenario 2||Scenario 3|
|Bandcamp Revenue Share (15%)||$431||$645||$2,156|
|Payment Processing Fees (4%)||$115||$172||$575|
|Your profit as percent of total raised||0%||26%||60%|
|Pledge Levels||$25, $40, $80||$25, $40, $80||$25, $40, $80|
|Pledge Distribution||67, 10, 10||100, 25, 10||479, 40, 10|
In the last scenario, Scenario 3, the artist makes much more profit for two reasons: because the total raised by the campaign is higher and because the per-unit production costs are lower. (Volume discounts apply at 500 records, 1,000 records, and 5000 records.)
If you need more information about profit and how to estimate it, please ask — your vinyl rep can help.