While this thread is old by now, I can now add some comments from my own
experience.

With several projects in mind, and with the help of some friends, I
started a record company.  Since we figured we would lose money, we are a
non-profit; tax exempt corporation.  At this point I should interject that
we accomplished that much through donated legal help.  It helps knowing
lawyers who like classical music.

Our goals were to release recordings of historic significance and
lesser-known repertoire, especially American Music.  The first project was
some Welte reproducing roll transfers.  I can hear many out there saying,
"no, not again." However, I believe this time, the man doing the transfers
has it right.  If anyone is interested, I can give a brief history of the
instrument and the previous attempts to issue some of the recordings.

The cost of the first issue (1,000 copies) was about $2,300.  That
included the films for the printing, the printing, glass master, pressing,
inserting booklets and such into the jewel case, jewel case and shipping
to the distributor.  Other costs, not included; mailing, promotional
copies, paper, ink, office supplies, and a few car trips to the company we
worked with, phone calls, the computer and software at home where I did the
mastering, layout, design, mailing labels,etc.  Since our first issues are
all public domain, we dont have any rights to pay.  The tape was supplied
free of charge...well sort of...if we make our costs back; he will get a
percentage.

Some early test pressings of our stuff had already received some
fine comment from the likes of Bernard Holland in the NY Times.  It
is distributed by Albany, so we thought, once we send it, it will be in
stores.  Wrong!  While it is in major stores, most never heard of our label
and won't stock it.  We are even having trouble getting it stocked in our
local stores.

We get $7 for each disc sold.  In short, once we sell about 350 we break
even.  During the first two weeks about 175 discs sold, or so our sales
report from Albany said.

As I am just a beginner with this, I am learning to appreciate how a
company like Naxos can not only manage, but flourish.  I know it has a
great deal to do with their distribution and marketing, oh and the quality
of their product.  Unlike our company, they make original recordings, pay
their artists, pay for the studio time, art work, notes, design, legal,
advertising, travel, etc.

I should add we have had wonderful writers donate their time for notes
and we have no advertising budget which explains why we won't be getting
a review in Fanfare.

If you are interested our label is Pierian.  Our first issue contains
all of the known Debussy recordings, including the 78s with Mary Garden.
The next issue, Granados plays Granados, will be released in November.
The December issue is a two disc set of Fannie Bloomfield Zeisler.

Our next issues will be American Music from broadcasts of the National
Orchestral Association.  Planned issues include Lopatnikoff: Violin
Concerto and Symphony No.3 and a disc of works for piano and orchestra:
Dello Joio: Magnificat for Piano and Orch.; Lees: Piano Concerto No.1
and the Ernest Gold: Piano Concerto.  No doubt money losers all, but
stuff we want to do.

I would be curious if any out there have seen our first issue in stores.
If not and you are interested, I guess you will have to bug your sales
managers...we don't have a web site yet!  We also printed our booklets
in black and white to save money.

In short, it can be done on the cheap.

Karl