There’s a saying about the Velvet Underground: they only sold a thousand records, but for every record they sold a band was formed.
I’m not a huge fan of the Velvet Underground. The only song of theirs that has a high rating on my Ipod is the catchy, relaxing “Sunday Morning.” Their influence earns them a place among America’s greatest rock bands, however. Managed by pop artist Andy Warhol, they developed an innovative stripped-down sound that helped lead to punk’s ascendance in the seventies. The crude subject matter of their songs was also proto-punk: “I’m Waiting for My Man” is about waiting for a drug dealer, and “Heroin” is, obviously, also drug-themed. Their most famous album cover, designed by Warhol, featured a banana peel sticker over a suggestive flesh-colored banana. At a time when lots of bands were pushing boundaries, Velvet Underground seemed to be pushing them further.
Allmusic.com, a great music resource website, says it with more authority than I can. “By the 1980s,” the website says, the Velvet Underground “were acknowledged not just as one of the most important rock bands of the ’60s, but one of the best of all time, and one whose immense significance cannot be measured by their relatively modest sales.”
Edited to add: Time to Vote for your choice for Best American Band!