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Pay What You Want: How Letting People Choose Their Price Can Make You a Millionaire

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coffee shop writing

I started writing and publishing online in the fall of 2012.

At the time, I wasn’t sure what I was doing…I just knew there were ideas in my head I wanted to share with other people.

I started with no audience and no connections.

For the first few months, I spent dozens of hours every week creating content and publishing multiple times a week, but received little to no attention.  I didn’t keep track, but I easily spent 100 hours a month on this website – a part-time job’s worth of work on top of my regular 60hr+ per week regular job.

For most people, that would be enough time wasted on a project to conclude it’s not going anywhere.  Throw in the towel and cut your losses, right?

Against rational reasoning, I didn’t stop.  I believed in my writing and I couldn’t quit because no one noticed (at least not until I hit 10,000 hours, right?).  So I kept creating content and continued to do it all for free.

In November of 2012, I wrote and published my first book: The Art of Instigating.  I gave it away for free, just like my blog posts.  Once again, I felt there was an important message that people should hear, and I wanted as many people as possible to hear it (hence, the free price sticker).

The small group of people who were following me liked it and spread the word.  My list grew by a couple dozen (an embarrassingly small amount by some standards, but I was proud nonetheless).

Shortly after releasing The Art of Instigating, I created a couple guides to help people start, finish and ship their own creative projects.  This is something I have a lot of experience doing through entrepreneurial endeavors but also throughout my time in the military, where the majority of my jobs related to project management, setting and hitting deadlines, and making things work (even when there were no resources to do so).

I gave these away for free.

In January of 2013, I started a podcast, In The Trenches, hoping to share the stories and journeys of other entrepreneurs and artists making an impact in the world.  While the show costs money to produce, I didn’t want to charge listeners – I felt the content was too valuable to keep it locked up behind price barriers.

Like the book and guides before it, I gave this podcast away for free.

What to do as an Unknown Author…

Around the spring of 2013, I was ready to publish my second book: 2 Days with Seth Godin.

This book, like The Art of Instigating, had a ton of compelling content, and I wanted as many people as possible to have access to it.

But I didn’t want to simply give the content away for free, and let that be that, like I had with my previous experiments.

To be completely honest, I wanted validation.  REAL validation.  Of course, the only ways to get real validation is through an exchange of money.  You find out pretty quick what people think of your product or service when you start charging.

But this presented a problem because charging for the book would defeat the purpose of the platform I was trying to create – I wanted people to have access to the same game-changing information that I did, regardless of their financial situation.

That’s when I stumbled across the Gumroad platform and their Pay What You Want pricing option.

Putting PWYW to Work

I originally heard about Pay What You Want pricing about a year ago while listing to an interview on Pat Flynn’s Smart Passive Income Podcast.

The person being interviewed was Anthony Vennare of The Hybrid Athlete.  Anthony and his brother started The Hybrid Athlete earlier that year.  But in a short amount of time, they had created a website that brought in, on average, $200 – $400 per day, using a Pay What You Want pricing method.

I was blown away.

Here was a real business, with real products and services, and real employees, making a killing using an unconventional pricing model.

I loved it.

This interview stuck with me.  Ever since starting my blog I thought about how I’d incorporate Pay What You Want into what I created.  I wasn’t sure exactly how I should use it, I just knew I wanted to.

So as I sat looking at the finished PDF of 2 Days next to Gumroad’s Pay What You Want feature in an open browser, the year-old interview came back to me:  THIS is how I can apply what I learned from Pat Flynn’s interview with Anthony Vennare to my art and work.

After getting permission from Seth Godin to share the book I’d written, I uploaded it into Gumroad, created a simple page on my website, and shared it with my readers (166 subscribers at the time).

I set the price of the book at $0+ (contribute whatever you want to my creative work – or nothing at all).

In the first day, I received close to $80 in contributions – enough to pay for a nice dinner for two…not bad…

By the first week, $340 – enough to cover groceries for the month…awesome…

By the end of the first month, I was closing in on $500 – almost enough money to pay the rent…incredible.

All for a product I gave away for free, but with one big difference: this is the first time I LET people give back to me.

Why These Numbers Matter

I give you my personal story for a couple reasons:

1) You don’t need to be a marketing genius or have a huge following to make money from your art.

I had no idea how to ‘launch’ a product.  I had a subscriber base of 166 people – a lot of people would laugh and say you don’t make money off of a list of 166 people.

I released my product randomly on a Sunday evening with no big announcement, no strategy, and no connections to other bloggers, yet I made $340 in the first week.

All from a product I gave away for FREE.

2) Pay What You Want WORKS

In my case, in a very small way – at least at first.

But in many other cases, in very big ways.

Anthony Vennare and The Hybrid Athlete is only the tip of the iceberg of what’s possible with this pricing method.

After writing about my experience  with Pay What You Want for Think Traffic, I received dozens of questions regarding Pay What You Want:

  • Why and how does it work?
  • Does it work with service-based businesses?
  • Can physical businesses (restaurants, construction, etc) use Pay What You Want successfully?
  • Does PWYW make more money than fixed pricing?
  • How do I incorporate it into my business, art, or writing?
  • And many more…

With questions like that, there’s obviously a large amount of interest in Pay What You Want pricing – clearly people see how valuable it can be…

Yet, oddly enough, there’s no single authority that’s written about the subject matter in-depth.

I decided to fix that.

In a few weeks, I’m releasing a massive book on Pay What You Want pricing: The Complete Guide to Pay What You Want Pricing.

This book explains everything you’ve ever wanted to know about Pay What You Want pricing, from how and why it works, to how to SPECIFICALLY apply it to your products and services to make 60% more revenue, to precise tactics and strategies you can use to create, grow and sustain a Pay What You Want business.

The Complete Guide to Pay What You Want Pricing by Tom Morkes

Get your copy of the book here.

Making Millions from Generosity

Did I become a millionaire from letting people choose their price?

No.  Not yet, at least. 🙂

But Amanda Palmer did.  So did Radiohead.  The Vennare brothers are on their way to building a million dollar business using the pricing structure.  There are literally dozens of other examples – all of which I analyze and dissect in my new book so you can apply their specific tactics, techniques and procedures to your art project, digital goods, or hardstand business.

At the end of the day, I believe in Pay What You Want – I think it benefits everyone, from the creator to the consumer.  But the only way it works is if we continue to support the creators we respect with our generous contributions.

So if you’d like to find out more about Pay What You Want and you’d also like to support my creative work, just click this link and contribute.  I’ve included a DOZEN (12!) free bonuses, worth over $500 easily.  This deal won’t last long.  Once the product launches, the price goes up and some of the bonuses won’t be available anymore (I simply can’t afford the time and money it would take to make them available to everyone).

Oh, and I’m giving away 3 free copies of the book.

All you have to do is leave a comment a below letting us know how you think Pay What You Want pricing could change your business, art, or writing for the better.

As always, thanks for the support, and hope to read your comments soon!

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35 comments

  • Count me in, TM! You do one bang-up job detailing the HOW and the WHY of PWYW. (Sounds like a public radio station’s call letters!). I like the aspect of letting the potential reader feel empowered by naming a price. You give a gift of your work, the reader gives a gift in return.

    Editors and agents are swamped with choices. It’s time to choose myself. Thank you, Tom!

  • Thank you for this! I work as a coach and I LOVE what I do. And every day I hear from other coaches that you need to charge high rates for people to see value in what you do. And I do have some high paying clients. But there is a place in my heart that feels that my message is for more than just the people who can afford my Platinum package. I would love to learn more about Pay What You Want.

    • Lisa – great stuff! I completely understand where you’re coming from…and Pay What You Want could definitely be the solution you’re looking for. I know someone who uses it to not only expand his audience, but make more revenue from his higher paying clients – all because he gave them the chance. Pretty incredible 🙂

  • Hey Tom,

    Really loving following your progress, keep it up!
    I think you really answer the huge (Mt. Everest huge) question of, “How should I price my product?” Your answer is, “Don’t price your product.” Don’t you make that decision, let your buyers make that decision. I love it also because … I don’t know what to price my product.

    I write quite a bit about home exchange. I’m passionate about it, addicted even. Sure, it can save you money (e.g. How We Stayed in an $8,400 Villa in the South of France for Free). But I think it’s more of a mindset switch or even a lifestyle change. So what should I charge for my not-yet-in-existence “Home Exchange 101” e-book? $8,400!? Ha. $84? $8? What if it changed your life and you had the dream summer in Paris with your family you might never have done? What’s that worth? Up to you.

    But, like you, I’m so in love with the concept of home exchange and I see so many positives, that I truly just want people to know about it. So if it changes their lives and they pay $8, I’m honestly thrilled.

    But I’ll take it a step further. I’m currently working on a huge WordPress University. The basic premise is, “Pay me $2,000 to design and develop your site or buy my product for $200 and I’ll teach you everything I know.” It’s a work-in-progress over at WPU. But maybe I forget $200. Maybe it’s Pay What You Want. The $200 number is kind of made-up anyway–I don’t know what people would pay.

    So you see I’m a prime candidate to at least test the waters of Pay What You Want.

    Keep writing.

    • Bradley – awesome stuff. Love the story about house swapping. A brilliant example of unconventional business transactions (where both parties win).

      Excited to see what you do with WPU as well!

      I’ll be sending you a copy of the guide as soon as it’s ready for release – hope it sparks your imagination and helps you get your PWYW pitch perfect 🙂

      • As far as I can tell, Gumroad isn’t (yet) compatible with WOO Commerce. Right? Hopefully it will happen soon.

        Interesting that you mention “both parties win” in home exchange. I sometimes forget that people really enjoy our house (and city) too. Thanks, Tom!

        • Not sure about Woo compatibility, but it can be its own standalone link set up on any website. So it’s still pretty flexible.

          Thanks for sharing my man!

  • I’m a terrible skeptic, yet I can’t dispute facts. The facts about your experience describe a model anybody ought to be able to use. I am chewing over this whole idea, wondering if this would be good for my work. I think I choke over my lack of faith in people’s willingness to pay at all if they can get something for nothing. If I could believe that people want to pay me, then maybe I could believe this idea could become a way to make a living. How do I get there?

    • Katherine, your concerns and fears are pretty common, actually. Part of the goal of the book is to help people do a bit of a ‘mindset shift’ so they can actually put PWYW to work.

      How?

      By using lots and lots of examples.

      I find that truth and experience are the best medicine for overcoming fear.

      I am posting about some of these true stories in my next blog post. I think it may help you get a better feel for PWYW and how to apply it to your business / art / writing.

      Of course, I’d also be happy to help you one on one if you’re interested – just let me know!

  • Wow Tom — fascinating post. I am about to launch a fitness/nutrition book and was thinking about how I might price it, or if I should just give it away for free. PWYW seems like a viable option. I feel like PWYW could provide me an opportunity to get my book out to a many people as possible but also allow me to test what people (the market) think the books worth. And maybe make a few bucks along the way. I’d also be interested to see how it works with services too. Thanks for sharing and creating this.

    • Julie – I think PWYW could work extraordinarily well for you, since you’ve built up a relationship with your readers already.

      I’d love to help you frame your PWYW offer, if you’re interested. I’m working with a few people one on one to test out much of this brand new PWYW research.

      Shoot me an email if you’re interested 🙂

  • I love it Tom! I’m with Lisa on this one, Pay what You Can is a sure fire way to stand out and get your message out there. I get the value of charging what you’re worth for your time but for products that are already created this is definitely an approach in the spirit of giving.

    • Melissa – awesome!

      Also – you might be surprised, but PWYW works incredibly well for services too. In the guide, I interview a few people who have used PWYW for their services and the results are mind blowing.

  • This is an interesting concept, Tom. I’ve heard of a similar concept with restaurants, where the patrons pay what they want for their meal. Like Julie, I am working on an ebook and planning workshops for the spring and pricing is the one constant grey area. Women, in particular, struggle with charging ‘what they’re worth’…whatever that is, me included. And I began my business by low-balling myself because I wanted to help so many people. Thanks for sharing your journey and how PWYW has worked for you.

    • Laurie – PWYW is certainly one of the best ways to quickly validate the worth of a product or service…of course, the offer has to be done in a certain way, but if you get the presentation / delivery right, you can quickly find out what you ought to charge (or just keep PWYW if it continues to benefit your business!)

  • Count me in! I have played with the idea myself but I have no idea how to actually go about it. I just know that I have enjoyed being on the consumer end of PWYW and appreciated the honest trust of the creator. I love the idea of being able to give and to receive. The logistics and how to apply it in such a way that it actually does truly benefit both sides I am certainly a bit fuzzy on. I don’t have products ready to share yet but I do have services. I have two business in mind and I wonder how to apply it to either one or both. I hope to find answers to my questions (and to questions I don’t even know that I have yet) in your book. The amount of work that must have gone in to this project is hard to imagine. I am so glad that you didn’t give up last year 🙂

    • Kate, thanks so much for the reply! Love it!

      I hope my book + additional resources will answer your questions. But if you’re interested, shoot me an email and I can help you work through the problem set and see how to implement PWYW into your services (and future products).

      Thanks for leaving a comment!

  • I am so keen to try this Tom, I was going to for my first launch but I haven’t I would like to think about it for future products though so this page is ear-marked! I think this is a wonderful way of giving back and helping everyone access what we have to give them. This is the new revolution!

    • Paula – could be a great opportunity to use it as a special one day or limited time offer to kickstart new sales of your first launch product. Paid to Exist does this every year with their products with remarkable success.

  • […] 2. Pay What You Want Pricing with Tom Morkes on the Content Warfare Podcast (external link) I sit down with marketing expert Ryan Hanley to discuss why Pay What You Want is one of the most powerful marketing techniques available. 3. 3 Ways Pay What You Want Leads to More Profit than Fixed Pricing I show you 3 case studies of people killing it using PWYW pricing. 4. Get Unstuck and Start Making Money Now (external link) I sit down with marketer Tema Frank to discuss my origins in the online world and how I got started using Pay What You Want pricing. 5. Why I Give it All Away  This is my reason WHY for what I do / create / write 6. How Letting People Choose Their Price Can Make You a Millionaire […]

  • This idea is great Tom and I am considering to use this strategy for my first ebook launch. But I have one question… how did your revenues go after the first month? Did it kept on growing, stabilized or decreased?

    • Mario, thanks for reading!

      In the guide I wrote (The Complete Guide to PWYW Pricing), I explain that sometimes the most powerful way to use PWYW pricing is in limited time increments, like one day only events, or for a special cause (ideally integrated with charity).

      That said, my books continue to bring in income. Some have decreased in average cost – but are still way above the $5 or $10 I would charge with fixed price. And a new journal I just released, The Creative Entrepreneur (www.insurgentpublishing.com/books/journal ) is bringing in consistent income…

      How?

      Bonuses!

      I go into a lot more details on why and how this works in the guide though.

      here’s another article I wrote on PWYW pricing with a lot more detail if you’re interested: http://blog.gumroad.com/post/75707736685/is-pay-what-you-want-pricing-for-you

  • I have been richly blessed by the free resource offerings of greats like Jeff Goins, Carol Tice, and Danny Iny in a time where I couldn’t have paid a penny for their books or updates. As a result, they’ve got themselves an enthusiastic and relentless ambassador – anyone who tells me they want to start writing something, those are the first names I give them. As I look forward to my life as a speaker and life coach, this would be a perfect model for me to follow. People feel happy when they get a deal, but they often buy because it’s a deal and then don’t use it. No good. Asking a person to decide what to pay changes their mindset to imagine what it would be worth to them. Immediate buy-in, and more likely to actually utilize and benefit from the product. Everyone wins. And, if it turns out they undervalued my service, I have a loyal fan, excited to pay a little extra for the next thing I put out. Excited to put it to work!

    • Ashley – you hit the nail on the head!

      There are levels to how powerful PWYW and the gift economy is…and it’s much bigger than a revenue stream or an ROI number…keep me posted and let me know how your idea evolves!

  • Thanks for putting this information out there for all of us to learn from…it’s a very intriguing concept for pricing. I am very excited to try my hand at the PWYW method of selling.
    I am within weeks of launching my crafts with Etsy and after hearing your discussion I definitely want to try this approach to selling my items. Would you recommend using the PWYW approach from the very beginning of my business or should I build the customer relationships first? I was thinking about doing this like you suggested for maybe the first day of my launch and then setting prices after that and then doing the PWYW concept periodically. I would like to get your feedback on this please.

  • Seems like this is geared towards non-fiction books. Do you see people using the PWYW concept for fiction? Also is gumroad your only avenue or are your books available on other platforms?

    it’s an interesting concept
    thanks
    chris

    • Chris, it definitely works for fiction. In fact, Steven King used it in early 2000 to launch a new novel written in parts…he made about $.5 million and didn’t even finish the book….that’s probably not the best way to go about it for those of us who aren’t Steven King, but it’s just one example of many.

  • I am currently using the PWYW method on a web site that sells a Christian e-book on forgiveness. At the time of this writing, I have had absolutely no sales, but I am not giving up.

    I believe that this pricing model is an excellent one because it gives the customers the power to decide the price rather than the author, and or business owner. This pricing concept eases people’s minds in that it allows for them to pay what they want without feeling intimodated at a fixed price that they might not be able to afford for a product or service.

    I plan to use the PWYW method on all of my products and services that I offer because as I see it, it shows true transparency, honesty and integrity in your business practices. It releases you from the grip of greed and deception because you’re allowing for the customer to decide what it is worth to them.

    There are cafes and restaurants that use this method and it has proven to be a very successful business model. I have done plenty of research on this practice, and have come to the conclusion that this is the pricing strategy that I am going to use from now on.

    There is another product that I am offering that also uses this pricing strategy. It is called the Ultimate Text Editor and Word Processing package. It is a huge zip archive file filled to the brim with Microsoft Word alternatives, plain text editors and other text editing and processing tools that were gathered from the Internet that are good replacements for the Windows Notepad and Wordpad programs. You can click on the URL here below to get it.

    This product also uses the PWYW pricing model.

    https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=JD8F5THESXWEJ

    If you’re not using this pricing strategy, then you might want to use it because it really does make perfect sense, and Paypal does let you do it on their platform which is great for me and for anyone else who wants to use this pricing strategy.

    • Keep at it. No sales isn’t a PWYW issue – it’s a marketing issue. You need to get your message right…and present it to the right people in the right way.

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