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By James T. Dennis, tag@lists.linuxgazette.net
LinuxCare, http://www.linuxcare.com/

(?) CD Duplication Services: Spam?

From Worldwide Ad Network Customer Service on Sat, 03 Jul 1999

Subject: A Fair price for CD duplication


I was wondering who you use to get your CD's duplicated and if you are happy with the service they provide?

I have a CD duplicator which makes 7 copies every 10 minutes. I'm not sure what to charge for this service. My thought is very simple, find out what everyone else is charging to duplicate CD's and then offer better service at a lower price!

I get jewel cases and blank media from overseas. I buy in volume so they cost me pennies each!

Thank you for taking time out of your day to reply. Britt

(!) I think you're a bit too late to this game. Anybody who really needs CD's burned probably has a burner of their own (suitable for about 4 copies per hour or less --- but enough for most people's needs).
Your materials costs may be inconsequential (pennies each) but you obviously have other costs to consider. (The fact that you're asking me this question suggests that you haven't studied business economics at all --- or that this is a clever ploy to advertise your new service without being labelled as a spammer).

[ If so, it's less than likely to get you positive clicks. For one thing, I clean off sigs, unless Jim specifically refers to them, and I reduce the sender's name to the actual name rather than any extra fluff, in an effort to keep the bylines short and friendly. On the plus side, at least the message itself was short. -- Heather ]

First there are your equipment costs. You have to amortize the cost of your duplication system over its expected lifetime (so that you'd be able to replace it as needed if you wanted to make this into a sustainable business). You'd also have to leave a bit of margin for maintenance, repairs and replacement of the cost (in case the duplicator fails during its expected lifetime). Plus you want to add a small margin over that to support purchase of additional equipment for increased capacity. You may not expect to "grow like hotcakes" but it's silly not to plan for some degree of expansion.
Next you have to consider postage and or parcel delivery costs. This will be a major factor in your proposed business since you clearly don't intend to cater to an exlusively local clientele. The "pennies per copy" is suddenly overwhelmed by the "dimes per copy" of shipping cost (for low volumes) and/or dollars per order (for larger volume requests).
Then we ask what services you offer (over and above the basic duplication/production of CDs and package in jewel cases). For example you might need to print labels for the jewel cases and/or offer silk screening or labeling of the CDs themselves. Some, possibly most, of your customer might prefer to have their CDs packaged in cardstock sleeves or mailers rather than jewel boxes. For multi-CD sets your customers might need various other packaging options.
Professional graphics design of labels and the jackets, sleeves, etc is more art than technology.
If you really want to make a business of this I'd make the custom CD duplication an adjunct to your own production. You could do mail order Debian (or Red Hat or other Linux distribution) CDs. You'd be in competition with Cheapbytes (http://www.cheapbytes.com/) of course. However, you might be able to open up new markets in places where Cheapbytes and its competitors haven't yet reached.
I haven't seen Linux CDs advertised in the back of Popular Science and Popular Mechanics magazines, yet. There are far less interesting items listed in their little "classified" sections. You could also advertise in various other niche magazines. If you're selling your single or dual CD package for less than $10 you'll probably make a small margin and get relatively few returns. You probably will get a lot of technical support calls --- regardless of how boldly you assert that "support is not included" on your marketing and packaging. Responding to support requests can be time consuming and therefore can become a significant cost of your business. (Yes, it can cost almost as much to NOT provide service as it does to provide it).
Of course there are other niches you can reach. For example in my role as an instructor at Linuxcare I find that we periodically need small production runs of custom CDs for our labs. Currently we have our own support people doing these (graveyard shift mostly). It's easy to keep that extra machine "cooking" while working on phone calls, e-mail and documentation. We also need floppies cut in about the same quantities.
When I was teaching at Mission college last term I took some extra copies of the free Red Hat 6.x CD and distributed to my class to encourage them to work and play with the class materials on their home systems.
I imagine that lots of instructors would like to cook up small runs of CDs for their classes. The free source and free content movements make this feasible for some materials. Obviously there are major copyright concerns as we branch into more mainstream materials.
(You should not ignore liability issues if you plan on making a business of this. If you copy a CD full of commercial music or software for one of your customers it won't matter whether you knew what was on there or not, and it won't matter whether you prevail in court; the costs of defending yourself may leave you destitute. If you opt to incorporate --- to limit your personal liability --- then you've got to factor in the considerable costs of incorporation into your business plan).
One of the sad facts about life in the modern world is that it's practically impossible to run a simple "mom & pop" shop or service without putting in plenty of effort into the research, planning and paperwork. It's what I hated about running my own consulting service.

[ But I'm glad that he did all these things before he gave it back to me. When I began consulting years ago, I'd never bothered to get even as much as a DBA. If this business is the only income for you and your family, you also need to make sure that your utility and other regular bills have some regular way to get paid, even while you're starting up. It might even require some government funding or a business loan, which are a lot more paperwork.

Also, in my case, I sell knowledge, and my own time and experience to crystallize it into usable form for small businesses. The first already has its storage space, and the latter is somewhat easier than many products to keep inventory of. For yours, even at minimal levels of success, you need some physical place to keep CDs and shipping packages. -- Heather ]

However, you might learn quite a bit by "doing it wrong" with a sort of "hobby" business. You might find that you have the knack for it and actually enjoy it as well.
Anyway, good luck and have fun.

Copyright © 1999, James T. Dennis
Published in The Linux Gazette Issue 44 August 1999
HTML transformation by Heather Stern of Starshine Techinical Services, http://www.starshine.org/

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