Digital technology and the Internet have made it easier for a number of businesses to connect with their customers. The technological advances opened the door to industries that otherwise wouldn’t have started. Music distribution is one of those industries. Prior to the Internet, a music distributor would’ve needed to establish a network of retail locations or a mail order business and invest in a supply of albums for distribution. Today, you can do the same electronically through MP3 or other music formats.
Start a business and register your company's name. The requirements for registering your business differ from state to state. At a minimum, you’ll be required to register your business with the local government, state government and the Internal Revenue Service.
Open a payment transfer account. You’ll need a way of receiving payment for the music offered for sale. A few online payment services exist, including Authorize.net, Safecharge.com and Paypal. The services allow you to receive direct payments as well as credit card payments. An online payment account links to your bank account for deposits and transfers.
Create a website. Whether you choose to build your website from scratch or use a template site, your website hosts the online storefront in which you’ll distribute the music. Your website should be easy to use and, more importantly, easy to find through keyword or similar searches.
Sign artists to a distribution deal. Find singers, songwriters or bands who want to sign a digital distribution deal with you. If you have a passion for music and know what you like to hear, there’s a good chance that other people will like the same musical genre. Attend music festivals or competitions for new bands and see if there is a group or artist you feel would be a good choice.
Market your website. You need to get the word out about your new distribution site. Use social media, blogs, online bulletin board sites and anywhere that you can post a link to your site promoting your signed artists and their music.
Consult with an attorney to draft the contract that you will sign with artists who agree to allow you to market their music.
Review with your accountant the best business structure for your company.