When you have a formula for pricing your artwork your entire relationship with your prices changes. We hear from a lot of artists that they struggle with how to price their art. This topic is usually cloaked in emotion, which is right there a major part of the problem. Creating art has to power to feel emotional, but pricing art shouldn’t. Just like any other business there is a simple cost to produce the good, a perceived value accepted by the consumer, and a profit margin the maker/manufacturer desires. Sounds simple enough, right?
We talk about pricing a LOT with our Members. Whether you’re a painter, a photographer, a ceramicist, or a jeweler, knowing how to price your artwork is challenging when you’re getting started selling online. If you look only to potential competitors to analyze their pricing you’ll notice that the range of prices is vast and it’s not always clear why their pricing is what it is— and the thing is, you don’t need to understand someone else’s pricing but you do need to understand yours.
DETERMINE YOUR WAGE PER HOUR AND KEEP TRACK OF YOUR TIME
What is your time worth? And think beyond just working an hourly job. You are a talented craftsman, with a very unique set of skills, honed over years of training and practice. Charge accordingly.
Also, be sure to factor in ALL of the time that goes into creating your work — from the early development and sketching stages, to finishing touches and preparing to ship.
KNOW THE COST OF YOUR RAW GOODS AND MATERIALS
Everything you purchase that goes into creating your artwork is considered a raw good. A raw good is essential for making the final product. This is another reason to keep track of your receipts, even before tax season (if you have questions about tax season you’ll enjoy this post.)
It may be hard, or even impossible to know exactly how much paint you used for a painting, or how much dry material went into making your glaze, it’s okay to make estimates. Once you’ve calculated your cost of raw goods a few times you’ll notice patterns emerging that’ll provide a helpful framework when you’re working on new sizes and new products.
Your cost = (Time x Wage) + Materials Cost
CONSIDER WHETHER YOU’LL EVER OFFER THIS PRODUCT ON WHOLESALE OR CONSIGNMENT (GENERALLY 50% OF THE PRICE YOU CHARGE FOR RETAIL)
If the answer to this question is yes, or even possibly, then your price should be at least 4 times your cost. This allows enough cushion so that if you were to sell wholesale at 50%, you would still have a decent profit margin.
Print reproductions and lifestyle products are the obvious items that come to mind when considering selling wholesale in boutiques, but also consider if you were to sell your art in a gallery that takes commission on consignment pieces. Be sure to factor in that commission!
When you’ve set your prices appropriately for wholesale, that 50% commission shouldn’t feel like a cut to your profit. If you have priced with wholesale in mind, your wholesale pricing should feel like your costs are fully covered and you walk away profitable. In that way your retail pricing becomes your wholesale price plus a 50% markup for selling the work in your store.
If wholesaling/consigning: Retail Price = Your Cost x 4
If only selling privately: Retail Price = Your Cost x 2
DO YOUR MARKET RESEARCH — WHAT DO YOUR COMPETITORS CHARGE?
While we don’t think the market should be the primary factor in determining your pricing, it is an important element to realistically consider to make sure your work is within the same ballpark as comparable artists.
The quality and skill of your work is an important consideration. If you’re just getting started or know that your technical skill could benefit from improvement, price your work with those fair considerations in mind.
Look to other artists working in your same style and medium, and appropriate galleries/shops where you could realistically see your work fitting — are your prices comparable?
If your prices are far lower than those artists, RAISE THEM! You are doing yourself and those artists a disservice by undercharging for your work.
If your prices are far higher than those artists, consider why and examine where in your process you could potentially cut costs. Efficiency and time management tends to be a big factor — could you streamline your process and batchwork more to lessen your time investment into each piece? Could you buy your materials in bulk to get at a less expensive cost?
Other factors to consider:
SIZE — using the formula above as a guideline, create a pricelist for the different sizes of your work, in proportion to their sizes. Buyers are accustomed to paying more for larger works, and while that may not always perfectly align with your time investment for each piece, its a good rule of thumb to follow to help potential buyers make sense of and trust your pricing structure.
Otherwise, expect questions and be prepared with a very clear explanation of your pricing structure.