How to Price Your CDs

January 8, 2013{ 7 Comments }

iStock 000013581152XSmall 300x300 How to Price Your CDsHow much should you charge for your CDs?

$5? $10? $12.99? $15.72?

Let me say upfront that there’s no clear answer to this question. Your CD’s selling price will be determined by a number of factors, but it’s wise to add up your various costs for creating the album and set your selling price somewhere ABOVE that sum.

Here’s a few things to consider when you’re deciding on a price to charge for your CD:

Manufacturing costs

Did you have your CDs professionally replicated by a company like Disc Makers, Oasis, or CD Baby? Calculate how much each unit/disc costs. That’s the most obvious basic expense you want to recoup per sale.

Production Costs

How much did you pay for engineering, production, mixing, and mastering? While it’d be great, of course, to recoup these expenses by selling through your first pressing of CDs, oftentimes your production costs are not the best factor to consider when determining your CD’s selling price.

Why? Firstly, it’s a one-time expense that has nothing to do with the quantity of discs you’ve made. You could’ve spent $30,000 recording an album for which you only pressed 1000 CDs. You’re not going to charge $30 per CD, are you? Of course not. And if you sell a million copies, that $30k ain’t nuthin’ but some chump change!

On the other hand, if the difference between a $9.99 and $12.97 selling price will help you recoup your production costs over the course of your first disc pressing, it IS worth considering those expenses — and probably going with the slightly higher selling price.

Royalties

Are there any cover songs on your album? You’ll need to pay a mechanical royalty on every single unit of the CD you’ve manufactured. Do you owe other kinds of royalties (splits among co-writers, points for the producer, etc.)? Factor these costs into your selling price, too.

The competition

You’re not the only one with a CD to shill. Hundreds of other albums are being released every single day! Just because you’ve labored over every detail of your album for the last 2 years doesn’t mean you can charge unreasonable prices for your CDs. Are you an indie band somewhere between unknown and regionally-recognized? I’d say between $5-$15 is sane. Much more than that and folks are going to buy music from someone else!

Also, consider the fact that your album will be available on iTunes for $9.99 (assuming you’ve got 10 or more songs). If your physical CD is too expensive, most fans will just go digital.

The context

Context matters when it comes to physical album sales. You might sell it for $12 on CDBaby.com, offer it wholesale for $6 (so that your final customer doesn’t pay too much after the distributor and retail store mark-ups), and charge $15 at a show — where a real connection has been made and people are going to want to buy something there and then to remember you.

Odd number pricing

Pricing involves a little bit of mind games. $9.99 sounds closer to $9 than $10. Add that extra penny and all of a sudden people are thinking double digits. $12.97? That sounds way cheaper than $13!

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Obviously there’s a lot to think about in terms of pricing your CD at that perfect point where fans are happy to buy, and you still make enough money to — well — make some money. Luckily with CD Baby you can change your selling price at any time, offer limited time sales, set a quantity discount so buyers will get a certain percentage off if they purchase 2 or more copies, and take advantage of our $5 Sales Bin.

How have you determined your CD’s selling price? As a music buyer, how much is too much? Let us know in the comments section below.

[This article leans heavily on some of the points made in this piece from the folks at Indie-And-Unsigned. Check out that article for some other good pricing tips!]

  • http://twitter.com/Matt_LDN Matt Early

    Dont forget the price is part of the marketing.

    You could ramp up the price with a decent bit of marketing and promotion.

  • http://twitter.com/MusicbyProseed Proseed

    I tend to sell CDs at shows for $5, keeping in mind that not only is someone buying your CD, they came out and paid a cover charge to watch you (and other acts) at a venue. Online, at least a few dollars more to pay for third party charges plus shipping. I think charging $15 at shows–which was theoretically included above–is a bit much. I think $10 is about as much as anyone should ever charge at shows.

  • Lindy Danton

    I live in an area with a depressed economy, so selling for 15 bucks is considered very high were I am. Still, we sell our CD for 15 because my music partner is a Native American Award Nominee. We're still considered indie because we do everything ourselves (yep, even cutting and stuffing jewel cases at 3am) but having that sort of recognition counts for something. If there was no award attached to our name and if we weren't well known with a good reputation in our genre we would drop the price.

    Although when we play live, we drop it two bucks because people like to hear that they're getting a deal. We make it exclusive and say something like, "We're dropping the price for just this show. Our retailers and our online store are 15$ and today is a special deal for 13$." Most times, people who are on the fence about buying a CD will scramble to take advantage of a discounted price- but you have to let them know it's a discount.

  • http://diymusician.cdbaby.com/author-chris-robley Christopher Robley

    I don't see anything wrong with that at all. If you look at CD Baby as a store — like iTunes — or Best Buy, it makes sense that the product on the shelves has a price tag. And people who like to shop with us will pay $9.99. That doesn't mean you can't do a "pay what you want" offer elsewhere.

  • http://diymusician.cdbaby.com/author-chris-robley Christopher Robley

    Are you asking why a physical CD costs more than the sum of its songs would cost in a digital format? If so, there is the value of the tangible item — the artwork and liner notes — plus the CD-quality audio, as opposed to compressed files (though that is not really a concern if you're downloading FLAC files). Those would be the benefits to the buyer. For the artist, there are manufacturing costs that need to be recouped.

    @ChrisRobley

  • http://diymusician.cdbaby.com/author-chris-robley Christopher Robley

    You're right. That'd be a pricing error on the artist's part. We allow them to choose their selling prices (for tracks, digital album, and physical album) — and the reason artists CAN set a higher full-album download price than the sum of the individual tracks for sale is because in some cases artists choose not to offer all their tracks for individual download. Sometimes you have to purchase the whole album download to get all the tracks, in which case it makes sense for that price to be higher than the sum of available individual tracks. But in this case… it's probably just an oversight on the artist's part.

    @ChrisRobley

    • Tony Masiello

      Makes perfect sense now… Thank you for the detailed reply!