How to Price Your CDHow 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!]