Pricing your Art or Creative Product
Many creatives find pricing their work tricky, particularly when they are just starting out. Unfortunately, there is no one size fits all solution. Instead, the price of your work will be based on a number of factors including the materials you use, how long it takes to make, your training and expertise, what others in the market charge for similar items, and what people are willing to spend on it. This guide provides some general tips to help get you started.
The Basics
If you look online you will normally see a general formula for pricing your work that looks like:
cost x 2 = wholesale and wholesale x 2 = retail price
While this formula might not work in all cases, it can be a useful exercise to do, to give you some starting ideas.
The price you get from this formula may feel too high and it’s okay to tweak the figures so you feel more comfortable. However, be cautious about pricing your work too low. This can mean you are unable to make a living from your art and might make you look out of touch to the true costs of your practice. It also undercuts other makers in your field and gives customers the wrong idea of how this type of work really costs.
Cost
“Cost” describes how much it costs for you to make your creative product. This should factor in the materials you use, the time it takes you to make the product (charging yourself out at an hourly rate), and a contribution to administration and overheads of running your creative business.
Wholesale
Generally, wholesale price is 50% of the recommended retail price. So, you might sell your products to a shop at a wholesale rate and then they sell them to a customer for the recommended retail price. While you will make less profit on each individual wholesale sale, there can be some advantages to selling this way. Often you can sell more items in one go, and it requires less work and time than individual sales.
Recommended Retail Price
The recommended retail price is the amount that a customer would pay for your product. Always charge the same retail price across stores, markets, and open studios unless you have a dedicated sale/ clearance table.
Selling at Galleries
Galleries use a different model for pricing. Rather than buying your work at a wholesale rate, instead they will take a commission of any sales you make. This is similar to if you sell your creative product via a consignment model in a shop.
The size of the commission galleries take can vary significantly, anywhere from 20% to 75% of the retail price of the artwork. Make sure you know what the commission is, and what kind of support they will be providing, before you commit to having an exhibition.
GST
Make sure you ask the stores or gallery selling work whether they will take GST out of your retail price, or add it on top. Different vendors will have different approaches. Make sure to check so you can price accordingly and cover your costs.
More is Not Always More
Think about whether it is worth having a smaller product range and get good at producing a few items really well. This may allow you to make savings on material costs or time through making in bigger batches and even potentially allow you to increase your price point for that item.
Positioning Yourself in the Market
While the general formula above can give you some starting ideas about pricing, it is also important to consider where your work sits in the broader market. Who else is making work like yours? Where are they selling and how much are they charging?
Spending some time researching the market and working out what? other makers and brands you want to position yourself alongside can very valuable. Think about the other elements of the brand that support their price point – including the images and language they use, their packaging and presentation, and if they have limited editions.
Do you want your products to be accessible to all different kinds of people? Or do you see them as more of a luxury and exclusive item? Your pricing will connect to your brand and where you position yourself in the market. Remember that if you want to aim at the higher end of the market you might need to invest more on things like your images and packaging.
More Advice for Pricing Artworks
It is often harder to price artworks than creatives ‘products’. There is a lot of variation in the price of artworks and artists and galleries don’t necessarily follow a formula approach to calculating the price. An artworks price might be influenced by the experience and reputation of the artist including if they have won prizes or exhibited in a prestigious gallery or show.
However, you can still do market research to help inform the pricing artwork. Look at galleries showing artists at a similar career stage to you. What are they selling their work for? And is that work actually being bought by people?
You can also price artwork in relation to other similar items you have made. For example, if you sell one 20cm2 artwork for $250 you might charge for $500 for a 40cm2 work.
The other thing about selling artworks is that it is generally accepted that you can slowly increase the price you sell work for over time. This can be harder to do with products, which might have a more fixed upper price point people are willing to pay.
Ask for Advice
No matter if you are selling a convectional creative product or a one of a kind artwork, it is always a good idea to talk through your pricing with someone else in the creative industry. If possible, try to talk to someone who is experienced in pricing such as curator or a retail manager or buyer. It can also be helpful to hear the insights of your peers and colleagues, or more established artists.
Trial and Error
If your work isn’t selling at one particular gallery or shop, it may mean their audience isn’t a good fit for your work and that particular price point. However, if your work isn't selling well anywhere you may need to consider whether this particular style of work is commercially viable or simply something you make for your own enjoyment.