Let’s talk about pricing.
Pricing is a sticky subject for musicians. I never know quite what to charge. Or even to ask for.
Figuring out the price of a commodity is easy. It’s mostly based on the cost of providing it. If I go to the supermarket and buy a sandwich, there is a narrow range of costs. It’ll probably be between 5 and 10 dollars. If I ordered a turkey sandwich and the teller asked for $40, I’d just go down the street where the prices are more reasonable. If they asked for 2 dollars, I’d be scared to eat it. The reason it costs 5-10 is because that’s the cost of materials (bread, turkey, tomatoes, etc.) with a little extra for labor costs, plus other costs of business (taxes, electricity, etc.)
Essentially all commodities are priced this way. Price too high and we’ll go somewhere else. The market is unforgiving about this type of pricing.
So that’s cost based pricing. Total your costs, add a small profit, done.
Your other option is to use “value based pricing”. This is pricing based on the perceived value to the customer, not the costs.
What sort of items could this be true for? First, it can’t be an item that’s a commodity. In the sandwich example, there are other options. The biggest limiter on pricing is the availability of other substitutes. How about signed copies of a book by the customer’s favorite author? You’d never price that by deciding what it costs to get the author to sign it. It’s purely based on the value of a signature to the customer. And it has to a be the right signature. I’d be happy to sign your favorite book, but I doubt that you’d be willing to pay for it.
There is a natural monopoly to unique items that offers new pricing opportunities. However, finding the right audience is critical. A small part of the population would be willing to pay exorbitantly for a private dinner with Russell Wilson. Others wouldn’t be willing to pay a single penny. If you offer a special and unique item to an uninterested audience it won’t work. You might then be tempted to lower the price, but that still won’t get you what you want.
So how does this apply to our music? I notice that we are tempted to use cost based pricing where we should use value based pricing. Cost based pricing is designed for commodities. And our music, if we consider ourselves artists, is not a commodity. We need to seek out those who place value on it, and provide the products/services/experiences that they value. Then we can ask for a price that allows us to keep making our art.