I will try to provide web links to all price quotes. I didn't look hard. These are just the first places I thought of when I went to buy this stuff. Thus it is safe to assume that you can get it cheaper than what I found.
You have to buy some materials in advance of filling the requests. This estimate assumes a modest distribution rate of 4 requests per week so that you are only buying your consumables 30 days in advance. Many people choose to buy in bulk to save on shipping and I will try to note where that will save money.
All prices are for the delivery of 3 tapes. It assumes you are using high quality tapes equivalent to the Fuji A/V Masters - not that Sony V crap or those Maxells in the gold boxes.
Fuji Pro Premium tapes. $1.45 per tape. $4.35 for three at http://www.americanrecordablemedia.com/
Cost of face and spine labels
$0.02 per tape. $0.06 for three at http://www.arcal.com/avcomvhslab.html
9.5" x 14.5" self sealing padded mailer. 47c each. at http://www.officesupplies.com/showProd.cfm?SCAT_ID=1600104&SubCatList=20
For up to two pounds, and 2 day delivery USPS charges $3.95 at http://new.usps.com/cgi-bin/uspsbv/scripts/content.jsp?B=Mail_or_Ship&D=9743#priority
Wear and tear on your Master cassettes
Assuming 20 viewings per master, 2 copy per viewing: $0.51/request at http://www.americanrecordablemedia.com/
Wear and tear on your VCR's
Assuming the VCR distribution above $1.26/request
I have tried to come up with every cost I could think of. And this was designed with VERY CONSERVATIVE ESTIMATES and with a set up designed to minimize the up front costs of tapes and supplies!
Surprisingly, the totals haven't changed much (if at all) in 3 years. I notice that the shipping costs are higher than they were a few years back and that the tapes are slightly less expensive.
Now, to get back to the question of percentages, if you are charging $18 per request ($6 per tape) then I CONSERVATIVELY estimate that you are charging a 70% mark up on your costs. That is a very nice business indeed!
So, now that we have established that MO distribution is a lucrative business, and that it is an illegal business (I think we all agree there) all that remains to quibble over is what we call such an operator. Hmm... I am trying to think of a good word. A little help please....
Two important NOTES to the figures listed above and to the comments in the last paragraph.
First, I have not listed the cost of doing the actual fansubs. Some distributors are subtitling their own stuff and some choose to pay a translator up to $50 or more per episode. I don't think translation is a completely valid expense for a fansub, it is at least arguably valid (though now it has become popular to get fans to pay for this too). If you allow $2.50 per copied volume to apply towards the cost of translation your costs would bring you nicely in line with the $6/tape figure. A fansubber would need to sell something like 80 tapes to recoup the cost of translation (if he actually paid for it). For many subbers making 80 tapes (which means producing 2 SVHS Masters which get worn out, and spending 80 hours in front of a VCR for the copies is all they ever have time to do. They would rather spend their time subbing than selling tapes.
Second, despite my harsh words on the subject, I do buy fansubs (that is I engage in NON-SASE distribution) IF can get them directly from the fansubber that did the original translation and timing. I feel that even in the event that the subber had the translations donated for free (either sponsored by fans for by a kindly native speaker), there is a lot of work and love that goes into creating a fansub. I figure I might have sent them a $7 or $8 in donations to support their efforts if I had done it by SASE anyway. I severely dislike "required" donations, because I have seen what it did to fandom. But I do engage in them from time to time. There are some excellent subbing groups out there and if a little bit of money keeps them happy and subbing more stuff, I am not above admitting that I like it enough to reward their efforts. I just wonder if my generosity might not be even more rewarding if they knew it was voluntary and I wasn't just doing it because I had to.