How did CD Baby start?

CD Baby started as a simple solution by Derek Sivers to sell his own band's CDs online. Facing the challenge of selling music online without a major label, Sivers researched and created a credit card merchant account, enabling a Buy Now button on his website. Initially meant for his band, fellow musicians in New York asked if he could sell their CDs too. This demand led him to create CD Baby, initially as a favor to his friends, and eventually moving the sales from his band's website to a new dedicated platform, cdbaby.com 1 2.

The business model for CD Baby was inspired by a local record store's consignment system in Woodstock, New York. Musicians set their selling price, while CD Baby kept a flat fee per CD sold. Sivers implemented a $35 setup fee and a $4 per CD fee, modeling the simplicity and functionality of the store's approach 3.