help with distribution deal offered

[jude3]

An Asian distribution company is offering me this basic deal:1. Artist Royalty : 15% of the Retail Price after deducting all applicable taxes.2. Mechanical Royalty : 5.4% of the PPD Price (PPD Price equals to 65% of the Retail Price) In this part of the world a CD sells for about $5. As I understand this above I would get 20.4% of the net sale.Does that sound right?

[mazz]

I don't think so. I think they're two different numbers. One is 15% of the gross after taxes which they would have to pay anyway and doesn't come out of their pocket, the consumer pays that as sales tax, right? And the other is 5.4% of the wholesale price.Am I reading it right?

[jude3]

Oct 14, 2009, 6:09pm, mazz wrote:I don't think so. I think they're two different numbers. One is 15% of the gross after taxes which they would have to pay anyway and doesn't come out of their pocket, the consumer pays that as sales tax, right? And the other is 5.4% of the wholesale price.Am I reading it right?yes you are. Since I posted this, the distributor broke it down for me.So I guess I got my question answered.Thanks Mazz. See you at the rally!

[greatmoves]

Hey Jude3, Are you doing the negotiating yourself? If yes, get a lawyer to look over the contract. It'll be the best money you'll ever spend. Plus, it will get you used to the negotiating side of this business, but the advantage is, you will have help. You first deal does not have to kill you...yes you are. Since I posted this, the distributor broke it down for me. So I guess I got my question answered.Thanks Mazz. See you at the rally!Can you fill us in with the details of the distrubutors "Break Down"???BB