All I can say is that I demand a higher rate because of my experience (27 years), my reviews (all 5-stars) and referrals from clients. I would like to say, without sounding like I am bragging, that my services are in demand but the truth is, we only do 75 weddings a year and when we hit that mark, we are done. After all, I gotta keep my sanity! Oh, did I mention that I do this part time. Yes, I am one of "those guys" that also has a full time job. Ouch!
It wasn't always that way, for years, we were stuck at that $875 mark. YEARS, I tell ya! Then, we realized that we were receiving up to 8 calls for EVERY Saturday. We are only a one-person operation, so we thought that if people want us to play their wedding, they will have to pay a premium rate for our services. We raised our rates and never looked back.
Granted, we are going against dj's who charge $475 for a wedding. And, they are recommended by the biggest/best venue in the area. Sometimes we get the gig over them and sometimes we don't. I never worry about other dj's and how they are booking up. I am one of those guys who gives away more wedding referrals than I get... 10x's more!
There is no right answer to this... charge what you feel you are worth. Only your clients can decide if you are worth it and the price is worth it. Then, if they leave you a positive review (WHICH IS CRITICALLY IMPORTANT), then you know you are at the right spot.
On the flip side, I have seen some $300 dj's do a fantastic job at a wedding. They could EASILY demand $1200+. Mystery why they don't.