Striking the right chord when determining how to price your artwork 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 with determining pricing 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 WORK. HERE’S HOW IT WORKS:
- Consider all the fixed expenses incurred to operate your creative practice, such as studio rent and utilities.
- Look at your variable costs, such as paint, canvas, clay or other art materials over the past few months and determine the average cost of materials each month. (Add them all up and divide by 4.)
- Add your fixed monthly cost to your variable average monthly cost to get your monthly total, also known as “overhead,” which is the money you need to generate to pay all your expenses.
- You can then divide that number by 30 to get a daily overhead and assuming an 8-hour workday, divide again by 8 to get an hourly overhead cost.
- Determine your “hourly wage.” Based on all of your costs, what would you charge per hour to cover your costs and make the profit you’re seeking? Add that to your hourly overhead to get your hourly rate.
- You can optionally include “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.
- Determine how many hours it took to create your work.
So the equation so far is:
(overhead costs + hourly wage) x (markup percentage) x (work time) = sale price
Let’s put it all together using the following assumptions:
Overhead = $20/hr.
Hourly wage = $15/hr.
Markup = 20%
Work time = 10 hours.
($20 + $15) x 20% x 10 = $420
It is important to keep re-evaluating these numbers. Over time, you will get additional data that could impact your work. Always keep in mind that this equation is just a guide. You can change the markup or hourly wage at any time.
Art consultant and gallerist Alan Bamberger says that artists should determine these 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.
Daile Kaplan, the Vice President and Director of Photographs & Photobooks and an auctioneer at Swann Galleries agrees that 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. “Collecting fine art, documentary and vernacular photographs or photo-books means making particular aesthetic and financial choices. In my opinion, artworks (including out-of-print photo-books) are “objects,” not “products” and, as such, should be viewed differently than consumables.”
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 at auction or in the retail environment, its size, condition, and signature, and, in the case of photography, whether it’s a vintage or modern print, a multiple (or editioned) work, or a posthumous printing,” she notes. “In addition, the lineage or provenance associated with the work is important, and whether the work has been in a museum exhibition and was reproduced in books, catalogs or monographs will also influence the value of art.”
Here are a few methods on how to price your artwork:
This model is based on researching other artists with similar artworks to yours to see how your type of work is selling 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 edition numbers.
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 as well as 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.
ARTWORK INVENTORY ADJUSTMENTS
Don’t price your work so high that you end up with a studio full of work that isn’t getting sold. 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 market. Arriving at the right price point for your work takes trial and error, and practice. Conduct sufficient research before arriving at a random 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?
As a photographer and Patent Attorney with a background in marketing, Steve has a unique perspective on art, law, and business. He is currently serving as the Chief Product Officer at Artrepreneur. You can find his photography at artrepreneur.com or through Fremin Gallery in NYC.