40 Questions Blog Series: Question 10 – How do I price my work?
Of all the questions that I am answering in this series, this question isprobably the most asked by artists. You can have the best productor best piece of art for sale at a show, yet if it isn't priced rightyou are shooting yourself in the foot. Even if you thinkyou know the answer to this, humor me and read on as you may find abetter way to price your work, giving you more money down the road.
Question 10: How do I price my work?
There are several ways to answer this question. Each type of art form(due to production time, materials, etc.) is different and should behandled differently when it comes to figuring a price formula thatwill work for you. Some do the “guessing game” method, pick aprice out to thin air and I have even known some artists do a “goingrate” price that changes from show to show. I personally feelchoosing one of these methods never gives the artist a “true”value of the work and your time. I cannot tell you how many times Ihear how people quote a number and do the “three or five times mycost” method. The one method nearly everyone should use is themethod where you add the cost of all your materials to the value oflabor and then add a fixed profit margin to arrive at a sellingprice. The formula looks like: cost of materials + labor + fairprofit percentage = price.
Now let's define cost of materials, labor, fair profit percentage and thedifference between wholesale and retail price.
Cost of Materials. One way to look at cost of materials is bydividing it into direct costs and indirect costs that is best summedup as expenses. Direct costs are your fees for raw materials such asnails, wood, earring backings, thread, clay, etc. Indirect costs areall the subtle fees you never really consider as a cost such asinsurance, canopy, computer and printer expenses, cost of yourworkplace (heat, lighting, machinery, and so on). It is the indirectcosts that folks never seem to factor into their costs.
Labor. This is something that can vary from one medium to another. Thetime to make a quilt verses making a simple pair wire wrapped ofearrings will be drastically different. Don't forget the time ittakes to create your product, time you take to design your work,networking... - all needs to be factored in too. Figuring out yourlabor costs starts with tracking your time. Factor in how much timeit takes to make a prototype as well as allowing time to answer phonecalls/emails, eat, etc. When you have figured the time it takes tomake one piece, figure out how much time it takes to make 10, 100 orhow many you can do in an hour – photography and two 2D art may bedifferent, but the idea can still be applied because we all stillhave to devote time to assemble, paint, frame, make labels, package,and so on. Divide your cost for labor by how many pieces you produceto find your labor cost per unit.
Fair Profit Percentage. Don't confuse labor with determining yourfair profit percentage. Covering your cost of materials and laboris great, but you need to make a profit to keep the bill collectorsaway, this helps in determining your wholesale price. More onwholesale price later... Determining a fair profit percentage canbe determined by doubling your labor and cost of materials (thishelps for those who do fine art) or tacking on a $1 to $5 (lets say)to each unit. This is more or less up to the artist – there is noreal formula for coming up with a profit percentage, especially foreach medium.
Wholesale vs. Retail price. When you use theformula of adding cost of materials with labor and profit percentagesyour ending price is actually your wholesale price, not retail price.To know your retail price, you double or triple it. Now look atwhat fair market prices are by visiting retail shops to see how youfair. If you are on par, congrats. If your cost is too high, startlooking at ways to cut costs such as making multiples at one time tocut labor costs or find better bulk prices for your raw materials.If it is too low, price your work a little higher – nothing wrongwith giving yourself a little more profit.
Lastly, far too often people sell their work at the wholesale price, don'tlet this be you. You're shooting yourself in the foot if you do thisbecause you are not factoring in the cost of selling your work (overwhat you consider labor costs) – paying for your time selling atshows or wherever else you sell your work. Remember, a retailer addsabout 2-3 times on top of the wholesale price to make their profit. If you are at an art fair or craft show you are acting as a retailer.If a retailer comes up to you at an art fair (retail) show and isconvinced they want to sell your work at their shop, they'll ask foryour wholesale price. If you are selling your work at your“wholesale price” at a retail show, game over because you cannotgo any lower. No retailer wants to sell your work at 2-3 times theprice you are selling at a show, there is no incentive for them tomake a profit. See where this becomes a problem? Not only are younot making a profit, but no one will want to sell your work too.Finding the right pricing for your work is more of a science than itis an art form. It is apart of the business side of running your owncraft business. Finding the right price – where you are coveringall of your expenses and making a profit too, will mean thedifference between loosing money or breaking even to becomingindependently wealthy.
Do you agree or disagree with this? Have a question? Post it using thecomment button. Question 11 will cover 18 ways to increase the valueof your work, another blog post you can't afford to miss!
Comments
The only thing that did well was the 275 business cards that people were clambering for! (I put a painting of a crab on the front and the contact information on the back)
Here are the prices and need help!
Original Oils
12x12
Gallery Wrap 2” thickness
Painted on all sides.
$125
Had one artist came buy and said, “I have done this show for 2 years and got skunked. You can’t sell art to a man dressed in a leprechaun outfit with a green beard drinking green beer! The green is in his pocket!
Happy Day!
Heather
I was reading Heather response and remeber liking the 100% income with little overhead and then realized shows are full of overhead. The transportation, motels ,food days going to days doing the show and going home. And the days out of the studio time lost not being able to work. Which you really feel at a bad show. so is is much different than the gallery expense probably not. And less risk. At least you don't have to worry about the weather.
Equally as important is to have work at several price points. As a fine-art nature photographer, I have "bent" my low price point in order to conform to the market, i.e., what I see other photographers charging for similar-sized work. These "entry level" buyers are a bit more price-conscious, and (as Heather mentions) I want to be able to capture them by pricing fairly aggressively. I tweak my mid- and (especially) high-level price points (for my large photos on gallery wrapped canvases) upward to make up the difference. Buyers of large works are going to be (somewhat) less price-conscious. And finally, I offer everyone on my mailing list some sort of discount coupon (the exact nature of it varies from mailing to mailing) to encourage repeat buying and upsizing.
I'm here with you on this topic! I am also treading the waters trying to price artwork. I am an oil painter that has a very difficult time trying to price work. The difficulty is working with galleries vs the show circuit. I finally came up with something that is based on size and I will vary if the quality of the piece is good or not so good. The 2/3’s. For galleries I take the show price $100 and add 2/3 so $80 which comes up to $180 and I make $90 after it sells. I am ok with the $10 difference.
My biggest fear is going to a show and being priced too low. I look at the income of my family and sometimes say I wouldn’t pay $1600 for that painting! But, in the right location of a higher income-I work with a gallery in a tourist area and he sells a $800 painting faster than a margarita to Nell’s in Florida in the winter after a show!
Do I have a degree’? No. Have I won any major shows? No. Do I have a client base over a zillion? No. At 44 I am still new to the show circuit but own a gallery and do artwork in the side. I really like the idea of 100% income with little overhead vs a location with 10% gallery income after expenses. The premise still is true in or out of a gallery: A professional looking booth, artist and artwork will deem a good client. Does this client gaze between a horribly thrown together booth or a neat well tagged booth that screams above all “I am a professional and should be paid for it, I have worked very hard and feel the sticker price is appropriate.” ?If your work is flying off the walls – here’s your sign….Remember America is a little sick financially we need to be understanding the prices we had received in the past will not apply now. That small purchase client today is next years winner when they have the money.
Happy Day!
Heather