Falling CD sales

Music fans are continuing to abandon buying CDs and records. Thanks to downloads and piracy, sales have fallen by 46% in the first quarter of 2007 alone in comparison to the same quarter last year. With Apple iTunes accounting for 70% of online legal downloads it seems that there is little of the download niche left to accommodate change for the real face-to-face retail sellers.

Is there hope?

According to the IFPI, whilst legal downloads is seen to have recently topped the $3 billion mark, 2005 was the first year to witness a revival in sales of seven-inch vinyl singles. Fans of UK indie and rock music have been given the 7 inch format a 5 fold increase since 2000, according to data compiled by BPI. Elsewhere the format is dominated by the new generation of acts including Babyshambles, The Arctic Monkeys, The White Stripes and the Kaiser Chiefs. This reiterates BMI’s claim that “there is still a huge demand for the collectible physical formats”. Indeed what can beat a shiny new object that you can hold in your hand? Further more it could be many years before some groups who have just become accustomed to the CD format will take time to upgrade to the digital so there is little point in abandoning it just yet.

How to adapt

Unfortunately we can’t all go out and expand sales by purchasing other companies like the recent extension of Ottaker and Waterstones book stores owned by HMV. At present the best option is perhaps the simplest one. Increase the number of sales in a market that is still important, albeit shrinking, by using the powerful tool of selling on the internet, its significance further enforced by the growth of illegal downloading. However, personal ecommerce sites are notoriously difficult to get the exposure they need to attract enough customers to keep them running.

Channelling sales through popular marketplace sites which dominate online music purchases, such as eBay; which currently boasts 157 million members, Amazon; the world’s number one trusted selling portal, and also Play.com; an ecommerce niche waiting to be exploited. These, can help generate revenue immediately, and additionally divert traffic through to your ecommerce site and use the trusted eBay and Amazon brands to leverage your own.

Multichannel selling

Why sell on just one marketplace portal when you can sell on many, simultaneously? This gives the advantage of maximising product and company brand exposure, and increases volume of sales. Unfortunately it takes little time to discover how problematic and time consuming straightforward processes in online selling can become. Could this approach, despite its impressive market reach, be seriously flawed for a large scale seller?

A new generation of ecommerce solution software packages have solved these fundamental problems. Leading suppliers like Giant Systems sell the means to automate and streamline the whole process (please query our Flexecommerce package for further details). You can upload tens of thousands of products in a very short space of time, and manage all your listings, product inventory, shipping, customer relations and payments from one single interface. Exclusively for Amazon and Play, we offer a re-pricing feature which automatically checks the price of your products against other competitor products, and lowers the price within the range of a determined threshold so it is always competitively priced ensuring there is a high chance of being bought.

Better still, you can be selling from your inventory on multiple marketplace sites and through your own ecommerce site at the same time, increasing your chance of making sales and maximising your profit margins.

For a music seller this kind of software is a tool that could save the CD in a battle of the Real vs. the Virtual. Moreover like HMV, absolutely any seller can branch out to support their record sales by selling alternative products, whether it is garden furniture or ladies jewellery; it can boost sales and revenue, and present the opportunity to reach out to a bigger market base. This could enable music sellers to adapt and gradually evolve, if desired, into a completely different business altogether, one that does not sell music at all. With over 230 million customers on eBay, Amazon and Play, and personal ecommerce sites becoming ever more popular it would seems that with online selling, the sky’s the limit.

Davin Fowler