Retail Price £12.99
VAT paid to government by shop £1.93 (£12.99/1.175 = £11.06)
Net to shop: £11.06
Shop marks up 50 percent of
Official Published Price to Dealer (PPD) £11.06/1.50 = £7.37
PPD £7.37
Shop gets eight percent discount £7.37/1.08 = £6.78
Net to distributor £6.78
Distributor takes 25 percent £6.78 x 0.75 = £5.09
Net to label £5.09
(Label pays 17.5 percent VAT to government if it is VAT registered)
8.5 percent of £7.37 PPD to MCPS £7.37 x 0.085 = £0.63
(20 to 30 percent of £0.63 taken by publisher) £5.09 - £0.63 = £4.46
Manufacturing cost of £0.60 £4.46 - £0.60 = £3.86
Promotion cost of £1.00 £3.86 - £1 = £2.86
So the label gets £2.86, less any artist's royalty at 14 percent of PPD (£7.37x0.14 = £1.03), and less mastering, artwork, and wages for freelancers.