Striking the right chord when determining how to price your art is tricky. Why? The art you create is personal to you and a product of your passion. It’s difficult to put an objective price on the labor of love that your art represents.
If you aren’t sure how to price your work, you’re not alone. Most artists and potential buyers have no idea how to value a work of art. Those who do know have help from authorities such as galleries, art appraisers, or art market specialists. Market sales reports can help determine the price for established artists but may have little bearing on how emerging artists should price their work.
How do you set a price that makes your art attractive to potential buyers and collectors but also allows you to make a profit? While there is no one formula that works for everyone, there are some guiding principles that can help you get started.
ARTWORK PRICING METHODS
Cost Plus Pricing
The Cost Plus pricing model looks at all the costs associated with creating your artwork as a baseline to determine how to price your art. Here is how it works:
- Add up all the fixed expenses, those that you regularly pay each month to operate your creative practice, such as studio rent and utilities.
- Look at your variable costs, those that you buy as needed, such as paint, canvas, clay, or other art materials, marketing expenses, groceries, cable, or even transportation costs to get to clients or your studio. Anything that you need to live the way you do. Use several months’ worth of expenses so you know you have listed most of what you would normally purchase, and then divide that number by the number of months to get your monthly average.
- Add your fixed monthly cost to your variable average monthly cost to get your average monthly total, also known as “overhead,” which is the money you need each month to pay all your expenses.
- Determine how many works you sell each month and divide that by your overhead to determine the sale price of your work for you to operate your business and your personal expenses.
- If each of your works are very different, such as the size or time it takes to create them, or if you are providing more services, such as graphic design, you can use the same formula to figure out an hourly rate, which you can use to determine the cost of an individual work or what to charge a client for your services.
- You can optionally include a “markup percentage,” which is just a way of dealing with unexpected costs, like if you had to buy or replace some equipment that may only happen once.
So the equation is:
- (number of works sold / overhead) x (markup percentage) = sale price per work
Let’s put it all together using the following assumptions:
- The number of works sold each month = 4.
- monthly overhead = $4,000.
- Markup = 30%
So the final equation is ($4000/4) x 30% = $1300 per artwork.
It is important to keep re-evaluating these numbers. Over time, you will get new data, such as additional fixed expenses, larger equipment purchases that may only happen once or twice a year, or hopefully, increasing sales which could impact how to price your art. You should make adjustments regularly, so you don’t get caught short.
Art consultant and gallerist Alan Bamberger says that artists should determine their costs first when evaluating the value of their art. “At the most fundamental level, you should be able to make a fact-based case for what your art is worth in a way that ordinary, everyday people who may be interested in your art can understand.”
Because this pricing model doesn’t take into account non-tangible factors such as an artist’s popularity, exhibition history, gallery representation, or social media following, this type of pricing is better suited for emerging artists.
Consider Using a budgeting App
Today, we have a number of easy-to-use tools that can help ensure that you are not overspending on any of your variable costs. Basic budget apps typically connect with your banks and credit card accounts to track spending and categorize expenses so you can see where your money is going. For this pricing model, it is critical that you know all of your expenses and adjust your prices accordingly. Budgeting apps can help make the process much easier.
Mint is one of the most popular budgeting apps out there, with high ratings for both the iPhone and Android. Mint tracks your expenses and places them in budget categories, which you can personalize to make them more useful. You can set limits for each category, and Mint will alert you if you’re approaching those limits. The app also shows you your credit score and any changes that may occur.
Rocket Money has a lot of integrated features with the end goal of not only helping users manage their money but also helping them save every month. Along with its budgeting and credit score features, it also has a “lower your bill” feature. To use it, you upload a copy of your most recent bill or connect directly to your online account from its list of providers, such as the New York Times or your cable company. Rocket Money will negotiate a lower rate for you, get you onto a promotional plan, or get back bogus fees. On average, Rocket Money saves its customers around 20% on their existing telecom plans through its negotiation techniques.
With Simplifi, you can connect all of your financial data, including bank, credit card, loan, and retirement accounts You can set budgets while keeping track of your spending. It will also create a spending plan that gives you an overview of planned spending versus what you’re actually spending. If you want to save for a big purchase, such as a large format printer or that new medium format camera, Simplifi can calculate how much money you’ll need to save each month. You can alter the time frame or how much you save, and Simplifi will recalculate everything for you — without you lifting a finger.
This model is based on researching other artists with similar artworks to yours to see how your type of work sells in the market.
Start by talking to industry members, such as gallery owners, art dealers, and fellow artists who create work similar to yours. Call and ask galleries and stores that sell art for their price lists. Pay attention to the prices for pieces similar to yours in size, material, and even technique.
Don’t forget – a commercial art gallery can mark up artwork by as much as 50% as part of its commission — so when evaluating how the cost of other artworks can inform your prices, keep that in mind. Using this strategy, your research becomes outreach and does two things: it allows you to collect information already out there and it helps you expand your network.
Here are some things to consider when Comparison Pricing:
- Geographic Market. Do you sell locally, regionally, nationally, or internationally? It doesn’t pay to look at what competitive artwork sells for in Bulgaria if you sell locally in Missouri.
- Consider the Type and Style of Art. Oil paintings should be compared to other oil paintings. Abstract art should be compared to abstract art, not portraits. Sizes should also be similar, as well as the number of editions for a particular work.
- Match Your Accomplishments. Pay particular attention to artists who have a resume like yours. People who have been in the industry the same amount of time and those of similar age, education, or work experience.
- Take Commissions Into Account. Consider the revenue you would get after any commission fees instead of the retail price of the work. For example, a gallery may have a 50% commission, while work sold on a personal website may have no commission. The gallery price may be higher, yet the artist may receive less money than the sale from a personal site.
Daile Kaplan, the Vice President and Director of Photographs & Photobooks and an auctioneer at Swann Galleries suggests considering the totality of factors that can be attributed to what makes an artwork valuable, including relevant details about the artist’s work history and the artwork’s availability or uniqueness.
According to Kaplan, “the value of art is determined by many factors, including an artist’s reputation or standing, the popularity of the image or object, its prior sales record, and its size.” So to make comparison pricing work, you really want to find artists and works that are closely aligned with your style and technical abilities.
ARTWORK INVENTORY ADJUSTMENTS
We all want to get a lot of money for the work we produce. Artist works hard and wants to reap the rewards of that hard work. Plus, the higher the price, the greater the appearance of success to the public, which can then be a factor in more people wanting to buy the works.
At the same time, you don’t want to fill up your garage or studio with artwork that never gets sold, so don’t price your work so high that you sell very little of it. If your work is not selling, or conversely, if it is selling too easily, then you are either pricing it incorrectly or you are reaching the wrong audience. Arriving at the right price point for your work takes trial & error and practice. Conduct sufficient research before arriving at a price and monitor your price against the market for comparison. In time, you will find the sweet spot to price your artwork
What method did you use to price your artwork? What factors go into your decision, and how do you know when you’ve found your pricing sweet spot?