How would you like to own a calculator that could calculate the perfect price for your art? All you’d have to do is punch in a few numbers, and it would tell you exactly how to price your work. . . no guessing, no stress.
Unfortunately, that calculator doesn’t exist yet, but you CAN create your own art pricing formula fairly easily.
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Every formula is made up of several factors (Like A + B + C = D) which you can use over and over again to find solutions to a recurring problem. In our case, the recurring problem is what to charge for your art.
Are you ready to take a shot at creating your own formula? Here’s the basic formula that I use to help artists price their work:
(Costs + Overhead + Labor)*Talent and Track Record.
Let’s go through each of those four factors. . .
1. Costs to make and exhibit your art
We might as well start with the easiest part—receipts for things you can count and measure, which end up leaving your studio when you sell the piece:
Materials – This is everything that you put into your art, such as the materials and the substrates on which you make it.
Finishing and presentation – This includes any frames, hanging systems or presentation pedestals that you use to exhibit your work.
2. Overhead to operate your studio and art business
Next, you will need to gather information about the ongoing costs of running your studio and art business.
Tools – Make a list of all the tools and equipment that you keep in your studio to make your art. Determine what your monthly costs are for those tools and upkeep.
Space, utilities, taxes, insurances and security – Allocate a portion of these costs as well, as determined by the IRS.
3. Labor to make art and run your art business
Now we come to the human factors, some or all of which you deduct on your taxes.
Wages, fees and commissions – Write down whatever you pay your assistants, contract employee or companies, business professionals (e.g. bookkeepers, accountants and lawyers) plus any commissions you pay out to your representatives (whether they be artist representatives, curators, galleries, art consultants, interior designers, etc).
This is like keeping receipts as well, only what pay others for their time instead of what you paid for a product.
Your labor – Allocate an hourly rate of pay for the time you spend on your art, from conception to completion. Include the time you spend on art marketing, as well as shipping, handling and installation, too.
Now that you have the first three factors figured out (costs, overhead, and labor) you can put them into a spreadsheet and divide them by a time period, say, every month.
Then you can divide your monthly costs by the number of pieces you sell each month to figure out your “cost of goods sold.” This will be the minimum you should charge for each of your works of art.
But that’s not all. . . there’s one more factor left!
4. Your Talent and Track Record
Here’s where it starts to get subjective. Your talent and track record are measured in the court of public opinion that helps collectors compare the worth of your work to other artists. Do some research to see what artists charge who are in the same career stage, who create work in the same genre as yours. Consider the following:
Professional accomplishments – You may be able to charge a premium on your work if you are a member of an elite group of artists or art association; or if you are the recipient of juried prizes, awards, residencies, honorary degrees.
Past purchases – Take into account what your artwork has sold for in the past. The highest price you have been able to consistently get becomes the minimum for your next series of work.
Geographic reach – Typically, the further away from home that you sell your work, the higher the price. In other words, if you are located in the Midwest, but sell your art in galleries on both coasts, you will be able to charge more for your art than someone who only sells their work in their hometown.
Naturally, no single pricing formula will work for ALL artists, but this formula covers all the basics, and is a great place to start. You should also evaluate your formula on a yearly basis (if not more often) to see if anything has changed.
Once you’ve gathered all the information you can, simply set your prices and take your work to market to test it out and make adjustments. The market itself will tell you if you’ve priced your work to high, or too low.