How Should You

Price Your Records?

A pricing guide for indie record labels.

A Pricing Guide for Indie Record Labels…

Pricing your records effectively is crucial for indie record labels to generate revenue and sustain their business. However, determining the right prices can be challenging, considering various factors such as production costs, different contexts, and the balance between profitability and fan satisfaction.

In this article, we will delve into the process of pricing digital albums and physical records, including cassettes and vinyl. Additionally, we will explore the concept of wholesale pricing and provide insights to help you make informed decisions.

So, let's get started!

Things to Consider When Pricing Your Records

Before setting the prices for your records, it's essential to consider the following aspects beyond manufacturing and distribution costs:

Additional Costs: Take into account expenses related to writing, recording, mixing/mastering, design, photography, promotion, and other creative processes. It's crucial to understand your actual takeaway from each sale, rather than focusing solely on gross revenue.
The Concept of Loss Leaders: Some products, like vinyl records, may serve as loss leaders, offering them at cost to please dedicated fans. Digital sales can help cover the costs associated with vinyl manufacturing. Similarly, offering digital singles for free can be an effective promotional strategy to build a fan base.
Different Contexts Dictate Different Pricing: Consider the context in which you are selling your records. For live shows and in-person events, higher prices are generally acceptable. On the other hand, pricing records competitively in record stores may be necessary if your artist is less well-known, as you are vying for attention alongside established artists.

Pricing for Digital Albums

When pricing your digital albums, keep the following considerations in mind:

The standard pricing set by iTunes over a decade ago was $1 per song, which can serve as a starting point.
Adjust the price based on the project's length and perceived value. For example, a 5-song EP may range from $3 to $5, while a full 10-song album could be priced at $7 or $8.
Offering flexible pricing options on platforms like Bandcamp often results in higher payments from fans.
Differentiate between regular albums and demos/b-sides when determining the price. The perceived value and production costs should be weighed accordingly.
Consider offering singles for free to promote your music, although fans may still choose to pay for them.

Remember that when selling digital albums, you have more control over pricing on platforms like Bandcamp but less control over streaming services.

Pricing for Physical Records

When pricing physical records, such as cassettes and vinyl, take these factors into account:

Cassettes:

The standard price range for cassettes is typically between $5 and $10.
Consider the value of your product and the effort put into creating it; don't undervalue cassettes simply because of their size.
Some major labels and indie labels price cassettes closer to $20, but you can find your own balance between affordability and profitability.

Vinyl:

The price of vinyl records varies based on multiple factors, including package specifications, special inclusions (e.g., download cards, booklets, posters), color variations, limited editions, and scarcity.
While the lowest prices for vinyl records can be around $15 or $14.99, $20 is considered the average price. Special limited editions may command prices closer to $26-$28.
The price may vary depending on the context and location of the sale. Charging a premium at shows or in your own shop targeting vinyl enthusiasts is possible, while lower prices may attract potential customers in local record stores.
Keep in mind additional costs, such as shipping, distribution, and retailer cuts, when determining the final price.
The laws of supply and demand apply to pricing vinyl records. Finding the right balance between supply, price, and demand is crucial for maximizing sales and profitability.

Pricing for Wholesale

Retailers usually expect a discount of approximately 40% off the retail price. However, local record stores might require smaller discounts.
To calculate the wholesale price, decide on your ideal retail price and subtract the appropriate discount percentage.
Connect with other record labels in your genre/region who have experience with wholesale sales to gather insights and determine reasonable pricing.
Consider your break-even number (the minimum price that covers production costs) and the retail price you plan to sell the record for on platforms like Bandcamp.
Take into account the profit margins of both your label and the retailer when negotiating wholesale prices.

Remember, these guidelines are not rigid rules, and experimentation is encouraged.

While it's essential to be aware of industry practices, you have the freedom to explore unconventional pricing strategies that align with your label's goals and the desires of your fanbase.

Pricing your records effectively requires careful consideration of costs, value, context, and the expectations of your target audience.

By factoring in manufacturing/distribution costs, understanding loss leaders, adjusting pricing based on different contexts, and setting appropriate wholesale prices, indie record labels can strike a balance between profitability and fan satisfaction.

Remember, while it's valuable to learn from industry practices, there are no hard rules. Use this knowledge as a foundation, but don't be afraid to experiment and find what works best for your label and artists.