Do you want to get paid what you’re worth?
When you’re starting out as an artist committing to prices can be really difficult. On the one hand you don’t want to overcharge and lose out on the opportunity. But on the other hand, you know that by undercharging you’ll be running at a loss and you want to be paid what you’re worth…It can be a very challenging line to tread.
We’ve noticed that the majority of artists seem to err on the side of undercharging. There is a common misconception that by charging less, you’ll get more opportunities and eventually make money. It can become far too easy to fall in a trap you can’t get out of.
We are here to tell you that you need to stop selling yourself short! It’s time you reevaluate your charges and get paid what you deserve!
How much does your time cost?
Importantly, this calculation is about how much your time costs you, not how much you want to receive for your time.
You will have costs and overheads that you incur for making your music or performing at an event. If you calculate those then you will get an idea of how much your time costs. This calculation can be done as a general figure or you could work it out for each activity for a more accurate figure.
How much is your time worth?
This is where you can start to consider what you want to receive for your time!
Once you have calculated your costs, you can combine that with how much profit you want to make from an activity in order to set a guide price for your time.
Time worth = Cost + Desired Profit.
Now, when you are going forward with activities you will have two figures to guide you:
- One that tells you what you need to make
- One that tells you what you want to make.
You can decrease your prices. But you can never increase them.
What we mean here is that you can always negotiate your prices downwards, it’s common practice. But, you won’t get far at all if you try negotiating your price up. When you are contacted about an opportunity, the first offer you receive is likely a prospecting offer. This is intended to let you know they are interested, give you a ball-park figure of their budget and get an idea of how much you are looking for.
Word of the wise: Pay attention to their offer as well as your own figures.
The figure that they offer you will be an indication of just how much they are willing to pay. If you go and triple that number, there are minimal chances that you’ll get the gig. Chances are, the figure they offer is sitting in the higher half of their budget, but they still have a little wiggle room to get the right person. They’ll be looking for a good deal, after all, they need to make money too.
Go in with a realistic counter-offer that meets your financial goals. But be prepared to do a little negotiation! Go in a little higher than you’re willing to take, never go in at your minimum. Best case scenario, they agree, worst case, you have some room to negotiate downwards. Negotiating downwards in these situations is always a viable option, but negotiating upwards will lose you opportunities.
Imagine that you got a call from a venue manager. They want to book you for a gig, great news!
You realise the gig would be a great opportunity and you really want to take it, but you’re worried that offering a high price will cause them to say no. So, you offer to do it for £200, which is what it costs you to get there and perform. The next day they call back and agree to pay you £200, but you know that you’ll make no profit. You respond to them with “Actually, I’ve reviewed my numbers and I would need it to be £300 for the performance”… Yeah, they aren’t going to be thrilled. You’ve already offered your services for a price. Imagine if you went to tesco and bought a pizza for £2, but you get to the till and they tell you it’s actually going to be £5. You wouldn’t be happy either!
Not only is upward negotiation unlikely to get you your extra fee, it will put them off working with you again in the future.
Now, imagine that instead of offering you asked them what their budget was. They then might tell you that they were looking towards the £200 mark. At that point you can tell them that you were thinking £300. They might say “Would you be happy to do it for £250?”, they may agree to the £300, or they might tell you “Sorry, but £200 really is our maximum.” If that’s the case you have the power. You know whether you would be able to make profits or not from the opportunity, and weight it up against any benefits it might bring.
Remember not to sell yourself short. You are not obliged to take events that don’t bring the profit or opportunities that you need to grow as an artist. Do not feel that you should take a gig that provides you no benefit because they selected you and you took up 10 minutes of their time.
Many artists believe that taking free gigs will grow your popularity and eventually you’ll be in-demand and get paid for your performances. That may be true, but you don’t know how much gigs you’ll need to take at a loss first.
The same strategy should apply to any merchandise you sell. If you are wanting to sell your t-shirts for £10 to make a profit, then you might think to list them for sale at £10. But why would you do that? Promotions are an incredibly effective sales strategy as people love getting a good deal! So, you should consider listing your products at a slightly higher price.
Why? Well, by setting the price higher you allow yourself the same wiggle room you have in event negotiations, but for promotional offers. You can then put multibuy offers up, or slash the price down to the £10 base level on limited time offers.
If you’re worried about a higher price for fear that it will cost you sales, don’t be! Chances are, someone who was willing to spend the £10 would be willing to spend £12. Thus, this will help you to shift more stock by enticing customers in using promotional offers.
In a similar way to event bookings, a lot of artists operate under a misguided mindset that lower prices will massively increase sales, and lead to more profit overall. Thinking like this will leave you disappointed. A t-shirt being £12 rather than £10 probably won’t cost you 10,000 sales. You need the facilities to draw fans in and show them it’s a bargain!
Learn when to sacrifice profit for growth
Making money is obviously very important. Once you start making a sustainable income you can rely on music to be your career and your passion. But sometimes the indirect revenue growth from expanding your fanbase may out-way receiving a payment. If you performed at a local festival with 30,000 guests, similar to your target demographics, then it could bring you strong growth. Opportunities like this are worth considering for the sizeable audience boost and long-term profit it could bring you.
The next time an opportunity presents itself, remember the key points here. Negotiation is your friend, but negotiating upwards is definitely not! Never sell yourself short or feel pressured into pursuing something and consider more than just the immediate cash injection getting paid may bring.
By setting up your music distribution with Identity Music, you can take full advantage of our music promotion support services and get your music out to all corners of the globe. You can get in touch with our team to discuss your options here!
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