For any new business, pricing work can be a total guessing game. On the one hand, you want to undercut the competition, beucase you know everyone wants a bargain and you want to get your product out there. On the other hand, you want to eat. How to solve this quandary?
The pricing problem becomes further compounded with creative businesses, because the product you’re selling isn’t something people can easily place value on. Artwork doesn’t immediately solve a pressing problem, or offer some kind of stable market for which you can compare models and prices. The price a person pays for artwork is whatever they feel it is worth. If they don’t feel it’s worth the price asked, they won’t pay for it.
And that leads to the problem of underpricing artwork. Artists try to compete in the same way big box stores compete – by undercutting their fellow artists. I see this all too often when I talk to artist friends of mine. They cut prices and cut prices so that they can sell their work, so that they can be seen as producing high quality art for a lower price.
This is bad for everyone – it’s bad for the public, who learn to place a low value on artwork. It’s bad for the artist, who isn’t making a profit, and it’s bad for other artists, because they begin to question their own prices and might be tempted to lower them just to compete.
The thing is, art cannot compete against other art on price. It just can’t. What a collector is willing to pay for one painting won’t be the same as what he or she would pay for another. Your goal should never be to undercut your competition, or, worse still, sell work that has greater emotional meaning to you at an inflated price. Your prices should be realistic, consistent, and sustaining.
The same goes for all creative endeavors – music, writing, modelling. To price any art realistically, you must take a step back and assess how collectors purchase. You should focus on offering your work at the price the market has determined it is willing to pay.
We artists have a tendancy to place high prices on works that mean a lot to us emotionally or spiritually, and low prices on works that don’t. We also compare our work to others and price on a scale of where we think we stand on the subjective scales of “good vs bad art”.
Pricing art is one of those areas of creative business where you want to take a fact-based approach, rather than follow your instincts.
The Beginner Artist: Price as an Equation
Most fledgling artists should arrive at their prices based on a simple mathematical equation: materials + labour + profit = price. But you first need to figure out how to work out those three variables.
How much did your materials cost? You need to take into account canvas, inks, paints, pencils, pens, clay, metal, sculpture tools … The list is endless. Create a list of exactly what you use for one piece, what each item cost, and a percentage of that item you’ve used.
Many artists charge a certain amount per inch for paint / ink, then work out the size of the finished piece and calculate a materials cost accordingly.
But this method doesn’t always work. What if you create art from found objects? Then, your materials cost nothing. Ah, but I bet you spent time sourcing those materials. How much time? Add this on. Perhaps you incorporate some kind of rare and valuable find you happened to come across for nothing. In which case, you should assess the value of that object and incorporate that.
How many hours did it take to bring your piece to completion? This includes time for research, sourcing materials, creating and finishing the piece.
What rate should you charge per hour? Set this according to your skill level. Beginning artists might charge between $10-20 per hour, those with more experience and followers will charge more. Multiply one by the other and you have a labour cost.
Now that you’ve got a labour and material cost, you should add profit on top. Most profit margins end up being 0.5x to 2x the cost of labour and materials. Some artists raise their profit margin even higher, but they’re usually established artists who can command a higher price.
Pricing can be further complicated by the production of prints, which increase the value of a single artwork. Many artists don’t make a huge profit on their original pieces, but their money comes from selling prints. Others price their originals on the high end of the scale, in order to market their prints as “bargains”, no matter the cost of the print itself. Saying to a collector, “the original work is $45,000, but you can get a signed, limited edition print for only $200″, makes those prints instantly collectable.
As a bare minimum, the price of your artwork needs to cover your material and labour costs. For whatever reason, you may decide to take little or no profit on your piece – perhaps you’re just starting out and you want to create the momentum of sales. Perhaps you’re attending a craft fair and know a piece won’t sell at your higher rate (I say, not harm in trying, but you might not have that luxury).
Thinking About Your Art Market
After you’ve worked out your basic price for an artwork, you’ll need to do a bit of market research. First, determine the venues through which you plan to sell your art. Are you going to exhibit in a local gallery, sell through a gift show, sell at craft fairs and markets, or in hotel lobbys and cafes?
Visit these venues and study the market. What are similar sized artworks selling for? What do people get for their money? You will find vastly different experiences depending on the venues you’re aiming for, becuase the markets are different and the buyers are paying for different things.
In my experience, galleries command the highest prices, and attract the buyers willing to pay these prices. However, some smaller galleries are more like gift shops for artwork and have lower price points. These are usually looking for a certain style of artwork focused on regional subjects. Art can be popular at craft fairs, as long as the price point is fairly low, or the artist has plenty of prints for sale.
Focus your attention on that art that is selling. If the market is buying paintings for $350-700, and ignoring those in the $3000-5000 range, this tells you the market is not willing to fork over that kind of cash.
Think like a real estate agent, who sets prices based on comparable houses that have sold in the neighborhood. You’re setting a price for your work based on the prices of other artists work. Collectors these days are savvier than ever – they often compare works and prices in many galleries before choosing what to buy. You need to be priced on the same level as your contemporaries to avoid being ignored.
When to Raise Your Prices:
So now that you’ve determined a fair cost for your work, you might be wondering when it is appropriate to raise your prices.
Commanding a higher price for your work will only work if people are willing to pay it. If you develop a dedicated following and an impressive sales history, then you can think about raising your prices. Developing this reputation for quality only comes through networking, building an audience and selling consistently through your chosen venues.
It’s not uncommon for established artists to raise their rates by 10-15% in a year.
Consistent Pricing for Artists
Some artists prefer to keep their pricing consistant across all their selling venues (and you should probably have more than one selling venue). Their argument is if someone buys a painting from a gallery and then sees a similar painting for sale on your website for a reduced cost, they’re going to be annoyed.
I think that if they saw the painting (or sculpture, or print, or collage of kitchen utensils) and wanted it, and paid the gallery’s asking price for it, than what’s the problem? They obviously felt it was of sufficient value to warrant that price sticker. If they find your website after the fact and realise the prices are cheaper without gallery commission, than they’ll be more inclined to purchase directly from you, which isn’t a bad thing.
(Except, some people think it is. Because they view this as artists taking money away from galleries. I also disagree with this view, because galleries aren’t charity cases – they are businesses.)
However you price your artwork, you should continually evaluate your market and reassess your rates. Would your buyers be willing to pay more? Do you need to lower prices to attract an audience? Don’t undertake pricing decisions lightly – have solid research to back up any choice you make, especially if you intend to lower prices.
And, for those of you stuck with instant noodles again for tea tonight, here’s my husband’s favourite recipe:
CHD’s Honey Soy Noodles
- 200gms diced meat (usually chicken)
- 2 cups stir fry vegetables
- 2 Tbsp honey
- 1 Tbsp soy sauce
- 1 packed Udon noodles
In a wok or frying pan, brown your meat (if you’re having meat). Once the meat is halfway there, add a tablespoon of honey and swirl it around so everything gets covered in honey goodness.
Add your veges and cook for a few more minutes. Than add your noodles (we don’t microwave them first or anything, just throw ‘em straight in) and cook until they’re ready, about 1-2 minutes.
Take off the heat and add a good dash of soy sauce. Swirl it through and serve.
If you want more articles about creative marketing for ass-kicking small businesses, as well as my FREE ebook, “Unleash the Beast: Releasing Your Inner Creative Monster”, hop over and get the Grymm & Epic Gazette.