As anyone (even me) will tell you, I made one large mistake when I started the AoPS school - I dramatically underpriced the classes. I did so partially expecting more students, but mostly underestimating the amount of time required to both run the classes well and communicate with parents and students about the classes. (Some of you may remember the initial classes were audited and evaluated.) To give you an idea how badly mispriced the classes still are, I'll note that group instruction in our area runs around per hour, and we're not even talking about highly specialized instruction such as we offer. Currently, our classes run around /hr, and that's not counting grading time, and the fact that we typically have 2 instructors in each class. For another comparison, we're roughly 1/3-1/5 the price of online classes like EPGY, and we offer something that, unlike EPGY, is very hard to find elsewhere.

So, back to the error of mispricing - basically what has happened is that we at AoPS have heavily subsidized the school. Meanwhile, we offer a pile of resources on the site for free (and will add several more in the coming months), we run the USAMTS and may not even break even on that, and we invest a few hundred hours a year in our local Math Circle. (Not to mention the degree to which we subsidized the expansion of the USAMO.)

Unfortunately, this is not all sustainable. At some point, we have to start bringing in revenue somewhere, or start focusing more on activities that clearly already do so. Therefore, we cut back on the Olympiad classes (which are the smallest of our classes by far), and encourage students to enroll in WOOT (which we also subsidize, but not as heavily as we do everything else). While we understand the frustration of those students who have to stretch to afford WOOT and could have afforded the Olympiad classes, we ask that they understand our position as well. And this gets to the peril of mispricing on the low side - offer something too low for too long and people begin to think that's the price for it, rather than realizing it's being subsidized by something else. Had we never offered the Olympiad classes in the first place (which in retrospect would certainly have been the financially correct decision), no one ever would have noticed, nor would many think of WOOT as 'expensive', particularly considering that WOOT is still a small fraction of the cost of specialized instruction you'll find anywhere else.

I think a lot of the difficulty of pricing stems from the nature of the good we produce: education. I would like to be able to offer a quality education to everyone who wants it. It feels like a good that should be free. But that's simply infeasible - we have to eat. So, we create some resources that are free - the community, the Math Jams, the Math Circle, the USAMTS. And we'll add some more in the next few months. But to pay for those, we'll offer resources that are not free. The problem comes when we offer resources that are not free, but are not nearly the correct price, as we have done for a long time with our classes.