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.
- 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.
- 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.
- Consignment/Gallery Fees. It is totally normal to pay 40-50% in gallery fees.
- 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.
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.
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.
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?