Why are Chess Lessons so overpriced?

I want to improve my chess but as a pensioner I can't afford $50 per hour either. So I play higher rated players, read books and use the training tools provided for me here on chess.com. My progress my be slow and erratic but I am a happy bunny who loves her chess.

just because one does not stick out, does not mean there is no competition. To the contrary, the fact that none stick out indicates monopolistic competition.  Take toothpaste for example. They all pretty much do the same thing but it is how they market themselves that sets them apart, and get customers to pay a premium for their product. That is how they compete. Sure you can get the off brand toothpaste, and save a buck or two, but if you were that type of consumer, then the Colgates and Crests of the world were never really competing for your dollar anyways. Its "monopolistic" because they can charge a premium for a well marketed product, but its "competition" because the items generally are all the same, and the premiums have their limits.

Acquiring customers is a challenge, but as you said, "There is no way to tell whether one coach is better than the next". Until a client actually tries a coach out, they can never be sure. This also means that until the client meets with the coach, the coach doesnt know what the client needs. This is why you hear them "all say the same thing". "Personalized development plans", "strength/weakness identification", etc etc.

As CEO of your company, do you make more than $50,000/year?

I suggest to students looking for a coach to do the following:

(1) Try to do some research about the coach.

What are their strengths and weaknesses as a teacher (this applies even, perhaps especially, to GMs!). Some coaches specialize in certain openings, or even teach some aspects of chess better than they teach others. Just about every coach works better with certain "types" of student -- for example, intense competitors, headcases, students who like/dislike solving puzzles, students who play lots of tournaments (or not), students who like to read/not read chess books, students with a great/poor memory, creative/uncreative students, casual students, lazy students, etc.

(2) If the coach is local to you, try to get a sense of their personality, and whether or not you would feel compatible with it. If you see them at a tournament, chat them up for a few minutes. But don't ask for free advice!

Listen, sometimes good coaches and good students just don't mesh. Doesn't mean anything is wrong with either side. It could be for any number of reasons, but the most common I find are that the coach demands more from the student/their family than they are prepared to do; or that the coach/student are not on the same page about the student's opening repertoire.

(3) Don't commit to a coach too soon.

Tell the coach that you would like to try a couple of lessons to see if you are right for each other. Some of the "my way or the highway" top level coaches might tell you to "get lost," but IMHO you should only hire such a coach anyway if you have hours each day to devote to chess and are aiming for the titled ranks.

(4) Don't hire the coach unless you are ready to pay their rate for the frequency of lessons you have decided is good for you.

Let's say the price is more than you were expecting. Don't ask for a discount walking in the door! That is disrespectful, and a good way too get less than 100% effort from the coach even if they agree -- it sends the message that the student doesn't really value us. What you CAN do is tell them that you can afford to do lessons once every two weeks, once a month for a check-in, etc. Most coaches will understand and will really try to do their best during the lessons you do have with each other. 

(5) Do what the coach says.

There is no point in hiring a coach if you are not going to do what they tell you to do. If you feel a disconnect with the coach at some point, then you should stop working with them and choose someone else. Needs do change.

If you were in the business and charging dramatically less than everyone, you would not be capable of doing your job. Coaches charge what they know they can get. They could get 1,000 people willing to pay $10/hr or they could get 10 people willing to pay $50/hr. But if they are physically only capable of teaching 10 people at a time, then why not set it to $50? This isn't a charity. They're trying to make a living in a field where that is very hard to do. It's basic supply and demand.

And quoting the pay of teachers in the US is not very wise. Teachers in the US get paid garbage. They deserve to be paid on the level of doctors and lawyers. And in many countries they are.

Do you know how much a bottle of Dom Perignon costs, sir? I'd charge $150 per hour or more, especially if the student could not tell the difference between "their" and "they're."

They aren't. They are underpriced because there are so many of them. Competition keeps the price down. Same with the example of teachers you mentioned. You say they make 27 bucks an hour, that's because there are so many of them competing for the same jobs. I'm not good enough to want to take lessons, but if I were, I would expect to pay between 75 and 100 bucks an hour.

The insanity:

No problem paying $600 for a phone.

Thinks its ridiculous to charge $50/hour for chess lessons.

Have lowered my price down to half a beer per hour.  Looking for serious students who want to be a GM before the end of the week!

I doubt they have all their slots full...

Just like any business, maximizing income is likely a primary concern while also keeping sufficient time for planning.

A good coach spends some time outside of the actual lesson peparing for it, for each student. So, each hour lesson likely takes an additional 30 minutes of work. 

You are likely right that most don't have all available slots filled but decreasing their rates doesn't necessarily mean they will make any more money to support their needs. A full-time coach has to try and balance things and it isn't really possible to say a given rate is too high without knowing their specific situation or market.

"Because it is worth it."

Also, above comment regarding tennis and other coaches is spot on. Good luck finding anyone with specific knowledge (or a coveted skill) that is willing to give it away. If you want to get better make an investment, lots of time (reading/playing) or lots of money is up to you, but becoming very good at anything takes a large investment.

To the OP: How much is your time worth? What can you teach me and how much will you charge me?

Books are cheaper.

Books dont give you the feedback a coach can.

I would like to become a professional in medical tourism in South America. Does anyone have expertise in the field? How much will you charge me for lessons?

Books are cheaper and self study should make up the bulk of your time.  A coach, or one to one lessons, should take up 5-10% of the time you're spending on chess.  So if you're not already spending 10 hours a week on serious study, you won't gain much from having a coach.

Cheaper lessons don't necessarily mean more students.  No one has offered me a beer yet.  

So what, in some of your opinions, is a fair price? $10 an hour? $5 an hour?

Just curious.

Depends on the level of the chess coach, and how well they can teach.  A higher rating doesnt always mean better instruction.  

I know an A player that charges $10/Hour

I know a Master that charges $20/Hour

Its like shopping for shoes.  Just because one pair costs $100, and 1 pair costs $30, doesnt mean the $100 pair is better if they arent a comfortable fit.

Yeah, definitely high titles and famous names can charge higher prices... not necessarily because they're good at it, but because it's more marketable.

From what I've seen online, it seems to me $50 an hour from a GM is fair. I saw earlier Pfren making fun of anyone willing to pay that amount though.

pfren is certainly entitled to his opinion.  I dont see anything wrong with paying someone to help you improve at chess.  If that person is truley helping you improve, you cant put a price on that.  I would rather overpay for progress, then underpay for not improving.