With respect to CD distribution major labels had divisions that handled the placement of millions of units worldwide. Independent labels such as Compass however secured deals with independent distributors to place their albums in regional retail outlets. Domestic distributors charged the label a fee for Compass this fee was 21% of the standard wholesale price of $11.45 per unit. The distribution of recorded music was also subject to a return privilege. All unsold CDs or cassettes were completely returnable by retailers. "This business is 100% consignment," Brown said. Compass was paid only for the CD units that sold, not for the number shipped.
Retailers returned unsold units to the distributor, which then returned them to the record company. Because of the return privilege, Compass typically manufactured about 30% more units than it estimated would actually sell at retail outlets the company would usually write those units off after two years.