I cannot count the number of times I have discussed the question of price with other artists. What is a fair price for my work? Is there standard pricing for pieces according to their size or medium? Should the buyer have to pay more for work that took longer to make?
The confusing truth is that price is highly variable. There is a definite range for the kind of work you are making, but the range itself will differ from city to city, or even from one show to the next. Buyers in a big city or at an upscale gallery will expect and support higher pricing than buyers in a small town or at a DIY show. Buyers are also more likely to perceive higher value in a piece by a well-established artist, one whose work will resell for more than the purchase price, than in a piece by an emerging artist.
Be a Copycat
The simplest way to get an idea for how to price your work is the “copycat method”. This involves going to art shows, fairs, and festivals, and seeing how other artists are pricing their work. It is important to seek out artists who are making similar work to yours, and who are at the same place in their career. In other words, don’t zero in on a famous, multi-millionaire painter if you are a sculptor that is just getting her feet wet. Even an artist that has been in the business for an extra 5 years is not a good gauge for your pricing.
Gross vs. Net
One of the most important distinctions for a business person is gross vs. net. “Gross” refers to the total money buyers paid for your work. For example, a painting with a $100 price tag would gross $100. “Net”, however, refers to the money you actually make after you factor in costs. That painting might have cost you $25 to make in supplies, so your net is $75.
In the same way, an art show that grosses $700 will require that you pay for certain costs, including supplies, entry fees, delivery costs, etc. If your costs total $300, then you will net $400. Another word for net is profit. If you divide profit by revenue, in this case 400 by 700, you will arrive at a profit margin of 57%.
Cover Your Costs
No matter what your costs will be, make sure you build these into your prices. Let’s say you want to make a 60% profit on a piece, and you know you spent $30 making it. In order to make your margin, you would need to charge $75 for the piece. (If you struggle with the math, here is a link to a handy margin calculator.)
There are additional costs that can come up if you are working with a third party, such as an art festival staff, a gallery owner, or an online store, and you will need to increase your prices to cover these costs. For example, a gallery will typically take a 50% commission on all sales of your work. In order to cover this cost and still make your profit margin, you should increase your prices by 100%. Even an online store platform will charge a transaction fee, usually 3 – 5%, and you will have to add this cost to your prices. If you will be shipping your work to buyers, calculate an average cost of shipping and add this cost as well.
If you have to pay a flat cost, like a $100 entry fee for an art festival, you can minimize the impact on your consumers by spreading the cost across your inventory. Let’s say you are selling 10 pieces. You can add $10 to the price for each piece.
Where is Your Support?
As you increase prices, there is always the chance that you will price yourself out of your market. Rest assured, the market is willing to support you at a certain price point. The difficult thing is determining at what price you will find that support.
Honestly, the only way to discover your market support is to choose a price and see if anyone buys. If you have difficulty selling at your desired price point, there are a few solutions you can try to make your business more profitable:
- Expand your visibility, thus creating additional opportunities for revenue
- Produce work that is less costly to make, thus making room for a wider profit margin
- Connect with new, more upscale markets that are willing to pay a higher price
With the last solution, it will take time for you to earn the exposure and credibility you will need to succeed in exclusive markets. You may need to settle for lower revenue as you build your brand. Always take the long view and appreciate the small victories along the way.
Review the Steps
- Find artists like yourself; use the “copycat method” to determine your price range
- Choose an acceptable but realistic profit margin, and include all costs in your calculations
- Make adjustments to your prices based on market support