The worst thing about being asked to perform for free is that many times those clients try to use prehistoric negotiation skills, in order to convince you that they are giving you a great opportunity.
Like that time, when a client told me something like “I can’t pay you, but if you bring your CDs you can sell them to the audience so, in a way, you get paid! It’s a win-win!”.
Worst negotiation ever. Let’s see why.
Every kind of business deal is based on the principle that “nothing in this world is for free”. It's a do ut des, I give you something in exchange for something else.
Nobody willing to negotiate would try to get something for free unless they think that what they are getting is crap.
The fact that you could sell your merchandise (like CDs) is just a collateral aspect of being there to perform but it doesn’t substitute for a payment.
It’s like going to a restaurant and expecting the whole dinner to be free if you pay for the wine that you drink.
So, when someone makes up new arguments to convince you to work for free, it's either because they think that what you are doing is crap, or because they think that you are stupid enough to be messed around.
I wouldn’t even react to such an idiotic way to negotiate, I would just change the topic and move on.
But if you really feel like wasting your time, you might try to reply: “My performance is the service that you need, it’s the reason why you want me. My merchandise is just products that can help spread the word. So, let’s do the other way around: you pay for my performance, and you receive for free one of my CDs! It’s a win-win!”
Just don't listen to their answer, please: since they had the guts to ask you to perform for free in the first place, I'm afraid that their answer would only transform you into the Hulk!
Just smile and move on.