by Catherine Watts
Setting prices for an artwork can be one of the most confusing and persistent issues for an artist. However, there’s amazing good news for them. Today, it’s much easier for artists to get started selling their work as quickly as possible. There are far more types of collectors to sell to and venues to sell art on. There are also ways to effectively market artwork, and pricing strategies to use.
Successful visual artists who can make a living solely from selling their art built their careers over the course five to ten years, if not more. Their work may have been as excellent as higher priced works by another artist, but they started out with modest prices. As they built their reputation over time they were able to raise their prices. When first starting out, a successful artist may have had to paint more than 100 pieces a year. This is for the reason that they can have a stable income. Now they can paint far fewer paintings to earn the same or an even higher income.
So how does an artist get to the point where they can get enough for their work to actually make a decent living at it? In this post, we are going to explore the ins and outs of pricing artwork. Also, tips for how to start making the big bucks.
4 Factors That Determine the Price of Art
Andy Warhol said, “Art is what sells.” Although art is indeed what sells, the following four factors are what sell the art: (1) the target market; (2) the production costs; (3) the technical skills of the artist; (4) supply and demand
The Target Market
A painter who creates art of wildlife for millennial will need to learn about many things. Like how much most millennial can afford to pay, the best places to market to that generation, and what types of venues animal lovers frequent. With this knowledge, an artist can more easily overcome pricing obstacles. It can be easy through negotiating a payment plan or suggesting a smaller piece that fits the potential customer’s budget.
The Production Costs
The retail price of the work often covers the cost of making the artwork. Production costs includes:
-all the materials used to create the piece
The Technical Skills of the Artist
Beauty may be in the eye of the beholder. However, most people can tell the difference between a novice artist and an experienced artist. The higher the skill level, the more money the art tends to warrant.
Supply and Demand
Demand for an artist’s work is the most important factor. This determines the price an artwork can command. The value of a piece of art has more to do with how collectors regard the worth of the piece than it does the technique or skill of the artist.
Pricing Strategies to Use
Production Costs Pricing
With this concept, an artist prices their products by adding up all of the production costs and then adding the cost of the actual labor (i.e what you charge per hour). In order to make this work, you need to keep detailed records and have a good idea of the costs associated with a particular piece of work.
Luxury Item Pricing
With this strategy you keep the price high and try to instill a perception that your work is of the highest quality. The best investment value, is only for a select few and worth the premium pricing. In order to make this strategy work, you need to deliver a premium product. Boutiques and smaller luxury stores are great venues to employ this strategy.
Dollar Store Pricing
This strategy is effective if you mass produces your work and sell it at a low price. For example, illustrators can sell their work to mass retailers like Walmart or to major manufacturers such as Hallmark.
With charm pricing, the left digit is reduced from around number by one cent. This strategy involves using pricing that ends in “9” and “99”. We come across this technique every time we make purchases but don’t pay attention. For example, the brain processes $3.00 and $2.99 as different values. To the brain, $2.99 is $2.00, which is cheaper than $3.00. In 2005, Thomas and Morwitz conducted research they called “the left-digit effect in price cognition”. They explained that “Nine-ending prices will be perceived to be smaller than a price one cent higher if the left-most digit changes to a lower level (e.g., $3.00 to $2.99), but not if the left-most digit remains unchanged (e.g., $3.60 to $3.59).”
Buy One, Get One Free Pricing
This is a pricing strategy in which customers pay the full price for one product. You can also get another service for free. Because this technique has been widely adopted you could put a new spin on it and use one of the following:
- Buy one and get 25 percent off your next purchase.
- Purchase one and get four bonuses valued at $60, for free.
- Buy one, get three for free.
– Start with an attitude that your art is worth selling, otherwise, no price will feel right to you. A big part of sales is self-assurance. So be confident about yourself, your art and your value. If you do not value your work, neither will others.
– Consistent pricing is usually the best practice so you should not price your work according to what region of the country or city it is shown, or what gallery sells it.
– If you plan to mass produce your artwork, be sure to maintain the license so that you can sell the image (s) again.
– Your prices should remain the same until you have one or more of the following:
- increased sales
- increases in the number of exhibitions you participate in
- increase in the number galleries that represent you
– There are times where you may want to sell your art for less than it cost you to produce. However, you should have a good reason to do so. The main reason for selling below full cost is to get a foothold in a new market or gain market awareness. Remember that you can vary your profit level. But not covering your costs is not a sustainable business model.
– Learn about your audience’s past art purchases. What types of styles do they favor and what are their price points? How, where, and how often do they like to buy art? With this knowledge, you can more easily overcome pricing obstacles. This is through negotiating a payment plan or suggesting a smaller piece that fits their budget.
– If you do not already have a track record of sales, your base price should be comparable to what artists in your locale charge for similar works of art.
– When calculating your studio expenses, maintain records of the time you spend and the cost of the materials.
Include overhead such as
- rent, utilities
- professional fees
- fabrication costs
Divide the total by the number of works you make a year, and average the cost per work. Then, add the sales commission. Make sure you build in a profit margin and room for a discount to notable collectors or collecting institutions.
– Always have a price list available that shows the full retail price.
– If people like your art enough to ask how much it costs, but do not buy, it may be because your prices are too high. You should ask for the opinion of any dealers, experienced collectors, consultants, fellow artists, and agents that you know. Reduce your prices according to the consensus. Avoid having to reduce prices again by making sure your deductions are in line with or even slightly greater than the consensus opinion. Never make your art so inexpensive that people will not take it, or you, seriously.
– A price increase is in order when the demand for your art regularly is greater than demand for your contemporaries’ work. The best time to increase prices is when you are experiencing a consistent degree of success. It can also be determined if you have established a proven track record of sales that has lasted for at least six months. Depending on what you make, and the quantity of your output, you should also be selling at least half of everything that you produce within a six-month time period. A price increase of 10-25% per year is in order if sales continue and demand remains high.
– Be able to justify all changes to your pricing structure with facts. Never raise prices based on whimsy, personal feelings or because you feel that they have remained the same for long enough.
– Many collectors and patrons visit websites to see new artists who are outside of their area. When pricing and selling your work online, continually compare your prices to available art in your area. Artists can also compare it with artworks on the internet. Have a good selection of reasonably priced works available for purchase. Give the buyer the option of starting small, without having to risk too much money.
– Always get a Bill of Sale as a purchase contract between yourself and the collector. Always maintain records of who has purchased your work. This should include the name, mailing address, email, and phone number. When doing business with an art dealer, beware of those who will not give you the information on a collector. By law, you are entitled to a copy of the bill of sale and information on who bought the work.