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This article reprinted from John T. Unger's Art Heroes. The original article can be found online:
© 2010, John T Unger
Does pricing your work make you nervous? Are you worried that higher prices might result in fewer sales?
One of the questions I see most often is variations on how to price artwork. That's the topic for this week… call in with suggestions that have worked for you or to get advice on the parts of pricing that you find most difficult. I'll be providing some of my own ideas on how to calculate your true overhead to insure that your prices are not to low.
The following are some of the best articles I've found about pricing your work. Each has a slightly different focus, covering different factors that affect your price.
- Setting Prices for Handmade Products: Alyson Button Stone, Bixbe
A Great overview of direct costs, indirect costs, and margins, all of which affect your pricing.
- Pricing Revisited: Lisa Call, Artist
Lisa demonstrates the thinking (and the math) behind her pricing.
- Wholesale Pricing and Sales Tips: Shana Victor, Shanalogic.com
Even if you never plan to sell through galleries, this is required reading.
- Art pricing article archive: Clint Watson, Fine Art Views blog
- The Art of Pricing: Tiered Pricing: Bethela, Etsy
Working a range of prices points to reach multiple markets.
- Setting Realistic Retail Prices: Linda Sanchez, Outright
A review of William Poundstone's techniques for pricing.
This episode is available as a Kindle Ebook at Amazon
Art Heroes Review No.3: How to Price Your Artwork [Kindle Edition]
Show Highlights: Excerpts From the Conversation
Selling art or selling out?
When I was a kid, I wanted to be an artist or a writer. Everybody was like "Oh, you'll never make a living in the arts." And I proved them wrong; I do make a living in the arts now. Then everybody was like "Oh, my god, you've sold out…There's this underlying feeling that art is "invaluable," and yet, not "valuable," not something you can put a value on, or that it's crass to talk money and art…
That's never made a lot of sense to me, because I feel like how would it be more honorable for me to be working a fast food job most of the day and then making my art at night? If I'm making art all day, presumably I'm refining my skills. And I think it makes sense that your art should support you, if that's what you really want to do, if that's what you care about.
You have to get paid for your time, even if you really enjoy it. But every time I raised prices, I increased sales. I've never raised prices and had sales drop.
Sometimes having a lower price is actually going to hurt you rather than help you.
I have a couple of clients who visit the studio every summer…They stop every year, and they typically spend a fair bit of money. They're great people. I always like to see them even if they don't get any art…I have a giant wind vane that I did that's in the yard. It's 11‑feet long, 11‑feet tall; it's pretty sizable. And he asked, "How much is that?" And I think I told him, "$4,800." …He said, "I thought it would be more. Other work I've seen in galleries of that size and that complexity goes for $7, 000 to $8,000. What's the deal? No, I don't want it." The funny thing is he would have spent twice what I was asking, but because I named a price too low, he felt maybe it wasn't worth it. Or maybe there was something wrong with it, or maybe it wasn't as good as he thought.
He was in some ways judging the artwork by the price. He liked it enough to ask on its own merits. But when the price was too low, suddenly he didn't want the work anymore; it spoiled it for him. I thought that was really interesting…Sometimes having a lower price is actually going to hurt you rather than help you.
I've seen a lot of people selling work on Etsy for probably less than the cost of the materials, where they're not really factoring in the other costs that maybe they don't see…I've even purchased stuff from people on Etsy. I buy the thing and it's five bucks. They send a free gift. It's packaged really nicely. And by the time it gets to me, they've actually spent more money than they've made just to send me a piece of artwork, which is great for me ‑ but not really sustainable for the artist. I'm going to assume that they have jobs, or spouses, or something there and not relying on their income there.
The cost of making artwork is more than just the materials
One of the popular formulas that I've been told by a lot of artists, is that they'll take the costs of the materials and double it and that's their price. Or maybe triple it. And there are probably some industries or some art media where that might work. I know that it wouldn't work for me, because so much of my overhead is not materials. Sometimes when I'm making a fire bowl, for example, the plasma torch tips that I burn through and the grinding discs and the sanding discs and the wire wheel that takes the paint off and the propane that takes the paint off, all of that can wind up being almost as much money as I spent on the steel for the bowl.
So in order to figure these costs out, you've got to track it over time. One month is not going to tell you a lot, because you don't have a run out of everything at once. You've got to track it over a period of months, ideally, over a year or two. You're going to make mistakes between starting out and having enough data to work with to know what your costs are.
You've got to pay yourself enough, not just to put the time in on the art but to put the time into selling the artwork. I think that is something that people really see as a different job…You go to the studio, you make art. You go online and you're listing the art on Etsy or on your website or on Flickr… that feels like something different. It is something different, but the art still needs to pay you for that.
What it sort of boils down to is when you're pricing your art work, there are two main things you've got to consider: your time and your materials. But in that materials category, there's a lot of hidden stuff like your shop rent and your electric bill and your consumables. Those are materials, those are stuff that you need in order to make the work, and you've got to count those. And in your time, there's the time you spend making the work, but there's also the time you spend getting ready to make the work and your selling the work and marketing the work.…What I would do is take the materials I know about, and double or triple that to cover the hidden cost. Then, in the studio, and at least double that in terms of how much I'm going to charge an hour.
Adam King on pricing art to include inherent value
…if you do any research, you're going to be informed, or you're going to read the two books that have ever been published on marketing your work for woodworker, and you're going to see the formula. And that is your material, time, certain percentage. You need to go and figure out your monthly expenses and divide that by a certain number and then you end up with this magical hourly shop rate that if you charge in that alone, then you somehow cover everything that covered and you're making a profit as well, because you factor the profit.
Then I remember doing the math over and over and over again when I started my studio and it didn't make any sense. I thought, wait a minute, how does this work? I kept charging.
Nothing was working until one day, it finally dawned on me what my teacher told me. He says, "I don't care how young you are. I don't care how inexperienced you are. If you don't start at this...." and he named a price. "If you don't start at this much an hour, you will never, ever, ever get anywhere." And I realized what he was doing…he said, "Don't take anything under $50 an hour. And within six, eight months, you better start charging $70 an hour." And as I thought about that, I thought that was crazy. Then I realized he was telling me to price value.
Well, I was saying it's several levels of value. It's the value of what you do and your knowledge as that increases, but it's also the perceived value that the customer receives from the work. You work to be priced accordingly so that the customer sees the inherent value that's also tied into the price.
Higher pricing buys you time in the studio
I have a friend who's a printmaker, and she's remarkably talented. I own a bunch of her pieces. And typically, she'll sell things for $30 to $100, which is really crazy low because she'll combine different techniques. If she gets six or 20 of them, she's lucky, where a lot of printmakers will do an edition of a hundred.
So I've told her, "I would probably spend three times what you're asking and be really happy to still have the piece." And she'll say, "Well if I raise my prices, I won't sell any." But again, with that confidence thing, what you price your artwork at tells people a little bit about how you value the work, and whether you're confident, and whether you've earned what you're asking.
What I've tried to explain to my friend is, "Say you sell a hundred pieces for $30. Or say you sell 10 pieces for $300. It's the same amount of money."
There's a lot of time that goes into each sale that has nothing to do with the artwork itself, just talking to people, emails back and forth, shipping the artwork, and so on. It's a lot easier to make 10 sales than a hundred sales.
Use multiple sales channels, but focus on your own domain
For every fire bowl I sell on Etsy, I sell 50 on my site, or something. A small percentage of my sales online is Etsy, but they add up, and it doesn't cost much to have that channel.