Ever since the Post Modern Times cafe in Minneapolis ditched its price list, half the customers have chosen not to pay. It is still making a profit.
What Is Pay What You Wish?
Pay what you wish (PWYW) is a pricing strategy where the buyer sets the price. You can pay any amount, often as low as zero or as high as you want. The idea is to build trust between a seller eager to provide value or expand market share and a fair-minded buyer.
How It Works at Post Modern Times
The cafe moved from loss to profit after switching to a PWYW model in January. Now 40-50% of customers do not pay, but the rest do. Running on donations means the cafe does not have to pay tax on sales. Staff are volunteers working for shared tips and community donations.
Other Examples of PWYW
- Museums such as the Met in New York use a PWYW entry fee for residents and students.
- The fashion retailer Everlane tried a PWYW sale in 2015.
- Radiohead self-released their 2007 album In Rainbows as a PWYW download.
Radiohead's Success
Research showed that 62% of fans paid nothing, and the average price per download was $2.26. However, it was still more than the share Radiohead would have got by selling at full price through iTunes (about $1.40).
The PWYW model has its place for charitable aims or promotional buzz.
