May 30, 2024

In the growing vinyl sector, Experience Vinyl uses Clearco Invoice Funding for exclusives

Samantha Lloyd

At Clearco, we fund all types of ecommerce businesses. While ecommerce businesses focused on apparel, beauty, home goods, pets, and food are common Clearco customers, there’s another category Clearco funds that may surprise you: music!

Experience Vinyl is a record company focused on releasing classic vinyl, limited editions, as well as the latest popular LPs across every genre. Music shows no sign of slowing down as a category overall but perhaps surprisingly, vinyl continues to be a fast-growing segment. Sales of vinyl records reached $1.5 billion worldwide in 2021 and are expected to top $2.6 billion by 2027, a solid CAGR of 8.4%. Experience Vinyl, walks us through the business model and how Clearco supports their ability to release really cool records through our Invoice Funding for inventory.

The world of music: exclusives, royalties, and producing vinyl in the digital age

Experience Vinyl has to hold a lot of inventory and plan their buying well in advance of certain events. When launching an exclusive album or EP, the company buys thousands of copies, knowing they may not sell within a year – and sometimes longer. Manufacturing of the record requires paying for 50% up front and 50% upon receipt of the product, even though the product may not go up for sale for another 30, 60, 90, and more days. Clearco allows Experience Vinyl to dedicate their cashflow elsewhere while we help fund the inventory.

Exclusive music rights refer to a type of copyright where music is licensed or where someone owns sole rights to the music as property. In  Experience Vinyl’s case, exclusive records refers to the right to release records, having the sole ability to do so for a certain period of time or for a certain artist, or sometimes both.

Clearco funds inventory purchase costs which means Experience Vinyl does not have to work with a distributor. When working with a distributor, they would need to push sales on exclusives, rather than take the time to release exclusives when it makes the most sense for the business. 

On top of paying for the records itself, Experience Vinyl has to prepay the royalties which means paying well before they sell the records. Clearco also funds the royalties which mitigates the three-or-more month gap they experience. 

Experience Vinyl states that the capped fee Clearco charges does not impact cash flow and that Clearco's Invoice Funding is fantastic for merchandise that you can’t get returns back from right away. They use Clearco for royalties and manufacturing.

Flexible funding options allows Clearco to fund 99% of Experience Vinyl’s exclusive records

Exclusive vinyls are the bread and butter of Experience Vinyl. The business model is difficult for banks or traditional financing to work with. Clearco funded this project and nearly 99% of Experience Vinyl's exclusives. 

The exclusive records that Experience Vinyl has are for a set period of time or quantity - exclusives that only they can sell and offer to a customer. Clearco’s funding offers the company a competitive edge. More than the funding, they appreciate the speed of the funding, as well - sometimes funding invoices in only a few hours.

Experience Vinyl’s customers can get records they couldn't before because the company can finance the gap between investing in inventory and selling the product to their customers. For their Record of the Month, they can choose the record that makes the most sense based on timing in the market rather than try to push all records for high sales. Experience Vinyl is able to be more strategic with inventory and how we sell or promote it.”

Owning distribution of Experience Vinyl with Clearco

Clearco funds companies so that they can build and scale in a way that makes sense to their specific business and customers. For Experience Vinyl, that means being able to distribute records on their own terms in a way that aligns with the best possible strategy for the artist. It adds a lot more value to the exclusive releases if they can be released to align with tour dates, new releases, or press opportunities. In Experience Vinyl’s case, that means selling through their custom website directly and owning distribution.

117% revenue growth in March 2024: 100% from exclusives, supported by Clearco’s funding of exclusives

Experience Vinyl has seen incredible growth - from January 2023 to today, they have experienced 48% in revenue growth. The majority of their growth comes from exclusives - in March 2024 alone, revenues from the sale of exclusives were up 117%. March was bigger than Christmas and end-of-year sales, underscoring continued strong growth potential.

The exclusives drive incredible growth for the business by driving traffic to the website, newsletter sign-ups, and orders. With funding supporting the exclusives inventory, it means that Experience Vinyl can take their time to do something cool and valuable for their customer.

Clearco made this level of growth possible by making it easier for Experience Vinyl to secure exclusives and fund inventory. The flexibility to payback on terms that match their needs as a business. Experience Vinyl can pay back in four months and not worry about carrying debt on their business. They also appreciate the ability to have their vendor invoices paid directly. Experience Vinyl believes the business should only seek funding  if it’s gonna make money on that funding - and that return is exactly what Clearco creates for his company.

What is Experience Vinyl?

Experience Vinyl is all about getting great music into your ears - as it’s meant to be heard. With Experience Vinyl, you can discover thousands of albums including classic vinyl, limited editions, as well as the latest popular LPs across every genre. Curated by musicians and music lovers who want you to fall in love with vinyl. Sign up for the Experience Vinyl newsletter to get updates and access to new releases.

Experience Vinyl works with Love Rocks, the concert that supports God’s Love We Deliver, Adopt the Arts, and The Pablov Foundation.

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Samantha Lloyd
Director of Marketing, Clearco

Samantha Lloyd is the Director of Marketing at Clearco. A longstanding marketer in the business-facing technology industry, Samantha focuses on accelerating startup and transformative growth at companies. In her free time, you can find Samantha dreaming of the ocean.