Pricing can be one of the hardest things for artists to figure out. And, figuring out how to make a profit can be even harder.
The cornerstone of making more sales and having a profitable business is staying consistent in your pricing. But, how do you know where to set your price point to begin with?
Especially in this field, it can be easy to let your emotions dictate your pricing. But, taking a critical, objective look at your work by taking some feeling out of the process will help you run your career professionally. (If you are especially attached to a piece and really can’t put a fact-based price on the work, consider keeping that special piece for yourself!)
Now, let’s take a closer look at how to price your artwork so you can make a profit:
Know Your Costs
Remember: to actually make a profit, you need to make more money than what you spent on producing the piece. So, understanding your costs is the first step.
Costs you should remember to include in your price (or you will have to pay for it yourself later) are your materials, shipping, and even framing when necessary.
The other thing you absolutely must account for is your time. Viewing your time as a line item cost is the best way to ensure that you are always compensated at the end of the sale.
Think of it like this: you have a unique skill set that people value and therefore will compensate you for. You are actually providing a service along with a final product. If you had any other job, you would be compensated for your time, right? That’s why it’s so important to account for your time. Because this is the money that’s going back into your pocket after a purchase.
Use a Consistent Formula
Using a consistent pricing equation ensures that you are factoring these costs in every time, so you never end up undercutting yourself.
An easy formula is simply using an hourly wage for the amount of time you were creating and adding in the cost of materials. Another method involves multiplying the square inches of a piece by a specific dollar amount. Just remember that whatever formula you choose to use, make it sure it covers your costs so you actually get a fair amount of money to hold on to after the sale.
Learn more about different art pricing formulas here.
What To Keep In Mind
Be aware that after using a pricing formula, you still might have to adjust the price for a few different reasons. While it’d be great to set a lofty price and rake in the dough all the time, that’s not always realistic.
Emerging artists may not be able to sell pieces for as high of a price because their sales simply aren’t as consistent as more established artists. Once sales become more steady and your recognition begins to grow, you can leverage this as social proof of your success and raise your prices.
It’s also important that you don’t outprice your buyers. A good trick is to check and see what artists with similar styles, quality, and accomplishments in your area are selling their work for, and set a comparable price. That way, when buyers take to the internet to research artwork, you won’t be passed over for too high a price or taken advantage of for too low a price.
Consider Different Price Points
In the end, the price needs to work for both you and your buyer. And, if you are still concerned about making a profit, you might want to consider selling less time-consuming, more affordable options alongside your higher-priced art.
Having multiple art price points increases your chance of making sales, and these smaller profits can add up over time. It also invites a new collector base into your art business — fans of your work who might one day be able to afford more expensive pieces. Building multiple revenue streams is another viable option if you can’t quite cover all your business and living expenses by selling original works alone.
Be Able to Show Your Comparable Sales History
One of the best ways to justify your pricing to your potential clients is by showing them your sales history. Galleries often present their clients with documentation of an artist’s recent sales — or their provenance. If you aren’t represented by a gallery, thinking of your sales process in this same way can help demonstrate to buyers the value of your work.
The more sales you can show, the better. One way to pull all this information up for you future collectors is by keeping up with your inventory, sales, and contact records through Artwork Archive. Easily export a list of all your recent sales by location within a certain time frame in a beautifully laid out report.
Increase Your Price Point After a Proven Track Record
Once you set your prices, know that you don’t have to keep them that way forever. Right after setting the initial pricing, knowing when to raise prices is the next big thing that artists struggle with.
If you are having success with your current pricing and body of work, you might start thinking that you can increase your price. One rule of thumb we like to live by is that if more than half of your inventory is selling within half a year, you are experiencing decently measurable demand for your work. In cases like this, you can increase your prices by 10-20% a year and expect to keep making the same volume of sales.
What’s the bottom line?
Don’t sell yourself short. The only way you are going to make a living as an artist is if you develop a pricing strategy that leaves you with a fair amount of money in the end. Getting a handle on your costs and understanding the market you are trying to sell in will help as you set prices and sell your artwork for a profit.
Want more help pricing your artwork? Check out these 5 art pricing do’s and don’ts.