How do I price my artwork?

Artists and makers are always asking me about pricing.  It is a tricky thing, but it does not have to be impossible.  The number one rule is to charge for your time because your time is really valuable.

Here are some major costs that many artists seem to leave out of the pricing equation.

  1. Taxes.  Taxes will end up being about 20% plus any sales tax you collect.  Once you are making a profit, you will end up paying more taxes.
  2. Overhead.  This is a big one.  Anything, I mean anything that has something to do with the ‘behind the scenes’ aspects of your business.  Utilities, Supplies, COGS, Office Supplies, Rent etc.
  3. Consignment/Gallery Fees.  It is totally normal to pay 40-50% in gallery fees.
  4. Your TIME.  Your time is one of the most valuable things you have to offer.  If you do not charge for it, you will never have the time to create and design new work.

Underpricing

In 2009 I was stuck in a way.  Don’t get me wrong, I love what I do, but I had backed myself into a corner with the prices I had on my work.  I was making 40+ pieces a week, entirely by hand without any power tools.  My back and neck hurt, my elbows hurt, I was overworked.  Probably working 80+ hours a week.  My fiance Mike was also helping full time and it felt like we would never keep up.  Our income was okay, but I was working as hard as I could to fill the demand and found that I could not keep up. Also, Mike was helping as a matter of necessity, he really had other things to be working on.

Due to underpricing in 2009, I did not have the time to really work out new technical designs such as my new lockets.  I was having to make many multiples of the same pieces in order to keep up.  My design time was pinched and I started to somewhat dislike the daily grind.

Dropping the Ball

During that summer I was also taking on custom work, but telling the cusotmers that I be emailing 3-6 months in the future.  I missed the ball on contacting of these potential customers soon enough after our original conversation and I am sure many of them went to other people to have their custom needs fulfilled long before I ever emailed them.  Or, maybe they even had forgotten our conversation.

Consignment Fees

Another major complaint I hear from artists is that they cannot afford gallery fees.  It is totally normal for galleries to retain 40-50% of your retail price. Let me be the first to tell you that you are in control of what you can and cannot afford.  You are the one setting your price!

If you want to be in galleries and not get mad that they are taking a cut, you need to make sure you are charging enough.  It is not fair to tell gallery owners that you cannot afford their consignment fees and to act as though they are the problem in the equasion.

What it boils down to is: if you want to be in galleries, you need to pay for their services.  Galleries do so much for the artists that can go unnoticed.  Keep in mind their overhead, rent and the fact that you do not have to stand there all day, every day in order for your work to sell.  Instead you can be in your studio.

Raise Prices

I realized that the key to having more time is to charge more.  At the end of 2009, I raised my prices and I still sold work.  In fact, I found that my prices needed to be raised by about $20 on every item!  It was so scary to do, but honestly only a few people even noticed.

Sell Less + Charge More = More Time!

In 2010, I made about the same amount of gross sales selling less work!  I was able to do less art shows and what I was really grateful for was more time to develop my own designs.  I was also keeping better track of custom orders and sending better stock to my galleries and gift shops.

Raising prices has also allowed me the financial freedom to make more choices in my business.  I can now do less art shows because I had the time to increase awareness about my custom wedding rings and Etsy shop which has really increased my sales over the winter 2010-2011.  I have also redesigned my website which has brought in more customers as well.

Make Business Decisions

With my current business stability and my monthly sales starting to be a bit more even throughout the year, I have decided to attend less art shows this summer.  To replace the shows, I will be doing more to increase my online presence and remaining contact with any custom orders that are in the works.

Also, remember to charge more for custom work.  The time it takes to make a new design and figure out any new details and corresponding with your customer can take a lot of time.  If you do not charge for it, either you will be struggling to catch up, or you may become resentful of your customer, which is a quick way to sabotage your business.  I know, I know charging more is tricky, but what it really boils down to is: Your time is valuable, charge for it. 

 

What do you think?  What are your pricing woes and successes? 

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8 Comments

Filed under Business Tips

8 responses to “How do I price my artwork?

  1. So how does the market fit in? I mean, what if I look at similar items on etsy and they are all priced lower than what I think I need to charge? Pricing has been a huge challenge for me – I have passed up opportunities to sell in shops and galleries because I am so scared to raise my prices above what similar items are priced on etsy 😦 Any advice?

    • Hi Heather,

      I kind of feel that a big portion of the handmade market is maybe undercharging based on a perception of value. There are so many cheap mass produced items that it makes it extremely difficult to really gauge what the market should be. I think this is part of the reason that pricing is so hard. We fell handmade items should be cheaper, like the items in the department stores, but really we should be a lot more expensive because it takes so much longer. The mass produced items are made in factories and handmade items are made by one person, it can be really hard to compare and come up with a final price. Here is a Great article on this subject in regards to dresses: http://www.etsy.com/storque/read/the-history-of-a-cheap-dress-12751/

      I am more expensive than many, many other jewelry makers on etsy, and I really always kind of have been. When I look at comparable items, I think well maybe their overhead is different, maybe they have a smaller mortgage, maybe they do not have student loans, maybe they are under-priced, maybe they have a day job paying for their business. Every one of us will have a unique price because our processes are so different and the time it takes to make something really depends on the person making it.

      When I raised my prices, I felt it necessary to explain to my customers the value in my work. How I did that was to explain how they are made. People will appreciate this and they will buy your work because they like it, you made it and they respect the talent and skill it takes to make handmade.

      Having your prices set correctly for gallery sales will also allow you to have the same prices in your etsy shop. With prices set higher, you can run promotions offering sales once in a while, you can give special discounts to friends and family and repeat local customers.

      I feel that including this extra percentage for gallery fees allows me to basically include the advertising in the price and in a way, hire an employee. When I send my items to a gallery, the percentage included for gallery fees pays them to sell the items. It is so awesome to have a relationship with small gallery owners where you can give them opportunity by providing part of their income. Pricing correctly can create jobs. (I sound like a politician lol).

      Good Luck!!

  2. Great post. I have had many other pros tell me that if my own pricing doesn’t make me wince, then it’s not high enough. Also that I shouldn’t price according to what I would pay for my work, but with all of the factors you outlined as the basis for pricing. That can be an odd little headspace problem: “I know how to make it, so it shouldn’t cost very much.” No. Just because I can make something with relative ease, doesn’t mean everyone can — that perceived value issue is so important. My prices make me wince, but my time investment is huge. Time is money. Spreadsheets also make the pricing process much easier and more consistent too, because it takes the emotion out of the picture.

  3. Thank you. You’ve inspired me 🙂

    Jessica – can you explain how you use a spreadsheet for pricing? Thanks!

    • I charge per technique. Basically hammering is one charge, stamping is another, sawing is another charge, holes drilled etc. This way I do not need to spend sooo much time focussing on the time it is taking me, I can focus at the end by calculating the correct price. Jessica is correct, the spreadsheet allows you to take the emotion out of the picture =)

      • Heather, I use this: http://www.enioken.com/jewelry/pricecalc.html

        It is well worth the $5. I have standard charges, too. As a chainmaker, I have a particular part of the calculation for ring fabrication — winding/cutting/cleaning that is standard for every piece. Beth is soooo right about standardizing that. Keeping a fee schedule for different tasks makes things a lot easier. For instance, I can weave 3″ of Pattern X in one hour. So when I’m doing something custom, I don’t have to guess, I can calculate out what my time will be for weaving 21″ of Pattern X, add it to my basic fabrication fee, toss in the cost of extras, and done. I would add to make sure on your materials expenses that you keep up with market price and factor replacement cost in instead of what they cost you up front.

  4. This is great, Beth. Thanks for writing it.

    I struggle with remembering that many people who go to artist markets and galleries have considerably higher price ranges than I do personally. We’re not selling milk and eggs, things necessary for survival. We’re selling art, and I think most people appreciate that, especially when you get to chat about your process, materials, etc. And we price our fellow artists out of the market by underpricing.

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