The thought of attaching a price to your artistic vision can bring on a case of the hives for even the most experienced artist. It can feel like a soul-sucking contradiction. On the one hand, art that is a true expression of the self is a priceless commodity. On the other hand, there comes a point when most artists would like to move the art along on its journey.
There’s no getting out of it. You have to put a price on it if you want to sell it. But pricing art brings up all the feelings, especially if you’re new to it. But what is it really worth?
To make matters worse, pricing can be very confusing. Everyone seems to have different opinions. A quick Google search leads to art business advice that either oversimplifies the issue into a quick calculation or never really nails down a solid process.
You Need an Art Pricing Strategy
Art pricing is not a one-size-fits-all-artists proposition. Artists have different goals when selling their art. Some need to set a price for a local art show. But artists who sell nationally, or work with consultants and designers have different needs.
To simplify the art pricing process, I’ve broken the best strategy down into four steps and laid out several things for you to consider in pricing your art:
Step 1: Determine Your Minimum Price with a Formula
When you are new to selling your art, your first pieces will sell for lower than they will as you advance in your art selling career. Artists who need to price their work for local shows or occasional sales will benefit from figuring out the minimum price they need to sell their work with a formula that accounts for their costs and time. This serves as a floor to your art pricing and guarantees you will not lose money on your art.
Step 2: Determine Your Maximum Price with Competitive Analysis
Once you’ve had success selling with your formula, you should explore if you can get a better price. You can begin this research by comparing your prices with other artists. Competitive Analysis will help you price your work in the sweet spot – not too low and not too high.
Step 3: Pricing Your Art for Retail
As you begin to seek out multiple venues, your prices will need to account for wholesale and retail pricing. This is a bit of a balance because your wholesale price must cover your costs, but your retail price must still be competitive with other artists showing in the same venue.
Step 4: Reverse Engineering to Make a Living
Before you go full-time with your art, you should reverse-engineer your target income. You will need to know exactly how much art you’ll need to make and distribute to meet your monthly needs.
Other Art Pricing Considerations:
Keeping Your Pricing Consistent
Artists that Accept Commissions
Artists that Sell Online
Overpriced Art as a Strategy
When to Increase Your Prices
Allowing Others to Adjust Your Pricing
When It’s Okay to Discount Your Art
How to Handle Art Hagglers
Now that we have a sense of the overall strategy, let’s dig into the steps, one by one:
Step 1: Determine Your Minimum Price with a Formula
Your first concern with pricing your art is coming up with a number that is fair but will cover your expenses. No one wants to lose money on art sales. This is why every artist should understand their cost and time expenses. It’s just good art business.
Other reasons for using a formula are:
- You may be in a rush. For example, if you’re filling out a show application, you may be a little panicked to find out that you are forced to declare a price. A formula is the fastest way to answer the question.
- Knowing your minimum price ensures your art pricing profitable. It also confirms that it is viable.
To determine the minimum viable price of a piece of your art, make the following calculation:
Cost to Create + (Hours to Create x Hourly Rate) = Minimum Price
Cost to Create
When considering your cost to create the art, include the actual cost of supplies to create the work. Also include your overhead costs, such as studio rental, utilities, and hired help.
You will need to apportion your costs to determine the amount for each work. For example, to determine the cost of paint for a single painting, you will need to consider the total cost of your palette and divide it by the number of paintings you can create with it to come up with the cost of paint for a single painting.
For monthly costs like rent, you will need to divide the amount of your monthly rent by the number of paintings you can usually complete in this time frame. You’ll make the same analysis for other costs like utilities and hired help.
Your Hourly Rate
Not sure what to use as a starting hourly rate? The U.S. Department of Labor reports that in 2020, the average hourly rate of an artist is $22 – $30 an hour. You can use the national average of $23.62 an hour and adjust up or down according to whether you’re in an area with a lower, or higher, cost of living.
If you are just starting out, you can also use your area’s minimum wage.
Your Minimum Price Confirms Profitability
Using this calculation confirms you will never lose money when you sell your work. For example, if it took 10 hours to create a painting, your formula may look like this:
$120 (Cost) + [10 (hours) x $23 (hourly rate)] = $350 Minimum
In this case, $350 is the minimum amount you would need to get for the painting to make sure you are not losing money. If you are selling in a retail outlet, $350 is the minimum wholesale rate (the amount you get paid as the artist.)
Your Minimum Price Confirms Your Work is Viable
Calculating your minimum price is important for another reason. It may be harsh, but it confirms whether your work is financially viable. Think of financial viability as being realistic, or achievable.
For example, if it took you 1000 hours to create the same painting in the above example, your minimum price would jump to $23,120. If you’re just starting out, this pricing is probably not realistic unless you are a celebrity or have backing from a famous institution.
If this happens to you, you’ll have to decide if you’re okay with selling the painting at a financial loss, which is totally okay, but probably not the best repeatable business plan. (See below for more info on using this as a strategy.)
If you find yourself with nonviable work, you have a few options. You can find a way to make the work in less time, find a way to lower the cost of creating the artwork, license the art or sell something other than your original work for a lower price. Examples include prints, merchandise, digital downloads.
Step 2: Determine Your Maximum Price with Competitive Analysis
The value of any commodity is equal to the amount someone will pay for it. This is true with art, and with everything else that you buy. To figure out what this amount is, we have to compare the sales price of similar items.
If you have ever bought or sold a car, you are already familiar with comparing the market for value. To figure out what your car is worth, you look for similar cars, with similar features and condition that have been sold nearby. The process for “comping” (or comparing) the art market is nearly identical.
The first step in analyzing your competitor’s pricing is to locate artwork that is similar to yours. Visit venues you are interested in both online and in person. If you are interested in showing in a particular gallery, go there. Likewise, if you are interested in doing a show or art fair, make sure to make a visit. You are looking for work that is of similar size, medium, and quality. Note the artist’s name, size, and price of the similar work.
Once you have generated a list of similar artwork and listed prices, research online for the artist’s website and make notes about their education, shows, and career level. It will not be possible to find an artist that possesses an exact match to your background, but you should be able to get an idea of whether your pricing should be a little more, equal to, or a little less than their work.
TIP: Make sure you are looking at artists and works that are selling. Comparing your work to work that is not selling is unhelpful. Sometimes it’s difficult to ascertain whether a particular piece of art has sold. Online, sales may be indicated by reviews. In-person, sales may be indicated by red dots, or changing inventory.
Competitive analysis has another benefit aside from helping to price your work. It is a GREAT way to find new markets and venues that are appropriate for your work. Take a look at where your competition is showing and make a note to look up these venues and shows for future consideration! Keep a list so that you can check in with their online presence over time to stay informed about what’s going on in the art market.
Step 3: Pricing your Art for Retail (Wholesale vs. Retail)
Many artists think the term “wholesale” does not apply to art, but it is a term that your retail outlets use regularly. If you would like to sell your art in retail spaces like interior design firms, galleries, or gift shops, you will need to have a wholesale pricing structure.
If you are interested in building retail relationships, it is important to adjust your pricing to a wholesale formula ahead of time. Some artists who start with selling directly to collectors for the minimum profitable price fail to raise their prices to market value. Over time, they develop a following without ever adjusting to wholesale. When retail opportunities arise, they are unable to make enough money to cover the retailer’s markup costs. They are flabbergasted when they realize their retailers need to make just as much as the artist on each sale.
What is Wholesale?
When pricing for retail, the wholesale price is the amount the artist gets paid. You may also hear it referred to as the artist’s commission, or the artist’s cut of the sale. The wholesale amount is typically 50% of the retail, but some artists are successful at negotiating as much as 70%.
Your minimum price is a good place to start with setting a wholesale price because it ensures profitability. Higher is better, of course, but the wholesale price should never be lower than your established minimum.
Once you have determined your wholesale rate, your retail rate is calculated by doubling your wholesale rate (multiply by 2.) Some retailers will want to triple your wholesale rate.
As an example, if your minimum for a painting is $350, and the retail rate is $700.
Step 4: Advanced Pricing Strategy: Reverse Engineering
If you are considering making the jump to making a living selling your art, you are ready for advanced pricing. In addition to competitive analysis, as outlined above, you should also do some reverse engineering.
Reverse engineering your income needs allows you to set a minimum amount of work that you must create and make available for sale each and every month. Using this process will help you identify whether you need to raise your prices in order to make a living. If your work does not support the higher rates, you may need to create more work, find additional sources of revenue, or reduce your living expenses.
How to Reverse Engineer Your Income Needs
The following are the four steps to reverse engineering your income needs:
Step One
First, create a budget that accounts for all of your expenses for the year. Make sure to account for all of your business and personal expenses, including hidden expenses like overhead and taxes. Once determined, add 20% and divide by 12. This is the monthly amount of income you need to maintain a healthy business.
For Example: $65k + 20% = $78,000 per year, or $6500 per month
Step Two
Now that we have a monthly target, divide this by amount by the average amount you earn for an average-sized piece. This is the average number of pieces you must move each month. This information will give you a sense of how much diversification you require in your business plan.
Example: $6500 per month / $2000 average = 3.25 Pieces Sold per month
Step Three
Once you know the average amount you need for an average-sized piece, compare the market as outlined in the previous section of this guide. The investigation goes like this:
- Find a venue you are interested in
- Look at the other artists in that market and find one with similar work,
- Now find that artist’s website and note the other venues they sell in. Keep a list of your competitor’s galleries, shows, competitions, and art consultants.
- Look into these other venues. They could very well be great targets for your work
This is also an opportunity to confirm whether or not the market may support higher pricing. If you are finding higher-priced work from artists with similar backgrounds and qualifications, showing similar quality work in similar venues, for goodness sake, raise your prices! Just be sure to confirm their work is actually selling at the higher prices first.
Step Four
The last, and most important step is to create a plan to make and distribute this calculated amount of work each month.
In our example, we know we need $6500 a month for a healthy income, and we know we need to move 2.3 art pieces that earn an average amount of $2000 every month to make this goal. In this case, the artist will need to have at least 2 – 3 times this amount of work available in multiple venues that support this market value and sales performance.
Another way to look at it is this: we know we need $6500 a month for a healthy income. This means we need to create and make available for sale at least $10,000 worth of art a month.
Although you cannot control the number of sales you will have each month, you can always control how much work you are creating and making available for sale. Having measurable and achievable goals is imperative to creating income stability.
From time to time there will be an income shortage due to changes in the market or life circumstances. To account for this, always work to develop multiple sources and types of income.
For instance, in addition to selling your original artwork, you might also consider teaching or a passive income source such as royalties, prints, or publications such as books or videos to fill in the income gaps.
Other Pricing Considerations
Keeping Your Pricing Consistent
If there is one unwritten rule of cool in the retail art world, it is this:
KEEP YOUR RETAIL PRICES THE SAME IN ALL VENUES.
(Yes, I shouted that.)
If a 10 x 10” oil painting retails for $690 at one gallery, a similar painting online should have similar pricing. This can’t be stressed enough. If your pricing isn’t consistent, you risk losing your galleries, your representation, and worse yet, your collectors.
You don’t like buying an expensive item only to walk into another store somewhere else and finding it priced for much less. Your collectors don’t like it either.
Keep Your Prices Consistent with Size
Although your pricing must take into account your time and costs, in the end, the retail gallery prices must be consistently priced for size. This is because typical collectors are put off by pricing that is different for a piece that seems similar in size and materials unless there is an obvious and compelling reason. If you have two paintings that are the same size and are priced significantly differently, make sure that your collector can easily detect the difference in the quality of the work or materials. Otherwise, consider raising the rate for all of your pieces to account for the anomalies.
If you have highly detailed work, or work that is simply much more expensive to make than your usual work (perhaps it’s leafed with 24k gold), name and price this series separately. If it is truly different, you may also have to market it separately as well.
Tip: Many artists create a pricing formula to help account for size: For 2-dimensional art, the formula is created by dividing the retail price of a piece by the square inches of that painting. This creates a price per square inch that can be applied to other paintings. This takes the guesswork out of pricing for both the artist, as well as retailers who might need to quote what an artwork will cost.
For Example:($690 retail divided by 100 square inches(10 x 10” piece) = $6.90 per square inch.
For 3 dimensional art, a similar formula can be worked out, but instead of using square inches, use cubic inches or linear inches.
Keep Your Prices Consistent with the Market
Another way you must consider consistency with your pricing is by keeping your pricing consistent with the market. In order to do this, you must “comp the market” (compare your work against the work of other artists in a similar market.) If your work is completely out of whack from what other artists are charging for similar work, collectors will question why.
Pricing Commissions and Custom Work
Creating custom work requires considerably more work than your usual work. You will need to deal with back and forth communication with your buyer, prepare proposals or samples, and sometimes even adjust or rework the finished piece. Because of this, you should charge a premium for custom work.
Artists generally charge between 10% to 25% on top of their regular established prices for commissions and custom work. If you are not comfortable with charging extra, start with a 10% premium. Then, work your way up as you do more commissions.
Another important detail to consider is a deposit. Even though most buyers commissioning custom artwork are wonderful, there are a few bad apples. Because creating custom work takes time and materials away from your art practice, you should never begin work on a commission until you receive your deposit. That way, if your buyer backs out in the end, your time has not been completely wasted.
A deposit is typically between 25 and 50% of the total commission price. Consider the request for a deposit a litmus test. If the buyer does not want to pay a deposit, run. This means the buyer does not value your time and materials.
Pricing Art for Online Sales
Pricing your art for online sales has a few special considerations.
Your Online Platform May Affect Your Price
How you present your work online will affect its perceived value. You will want your website to convey a professional and beautiful aesthetic. If you are self-hosting your own website be sure to use a clean and modern theme. The quality and range of your photos are how your potential buyers will compare your artwork to others, so be sure to show your best. When doing your competitive analysis, research how other artists and online venues are presenting artwork. Take note of the format and features of websites that are selling artwork in the price ranges you want to compete in.
Some online platforms may be a great place for beginners, but keep in mind that your artwork will be shown alongside other art that may not provide your work with the best context. This may lower the perceived value of your work, and therefore, reduce your prices.
Additional Costs with Online Sales
When determining your minimum, don’t forget to include the costs associated with the online platform(s) you use. This includes the costs for running your own website, as well as transaction fees from online platforms and payment processors.
Shipping
Another cost you will need to factor is shipping. Most art sold online is sold to buyers that are not in your immediate vicinity. Since this is the case, you will need to consider shipping materials and carrier charges, which can be quite costly.
Shipping materials are the responsibility of the artist and should be included as a cost in your minimum calculation.
You have an important decision to make with respect to carrier charges. Absorb the cost yourself, or pass the cost along to the buyer. According to Statista, 73% of buyers are more likely to purchase online if they receive free shipping. Offering free shipping can be the tie-breaker between your art and that of your competitor.
If you’d like to offer free shipping with your online offerings, calculate the cost to ship your art from California to New York and add that to your minimum calculation. Don’t forget to add limitations to your item description so that your customer is clear about what type of shipping is included. Make sure to include the carrier, and type of service (priority, two-day, or ground transport.). Let them know if they need expedited shipping, or shipping outside of the contiguous United States, they should contact you for a quote.
If you decide you do not want to offer free shipping, you will need to employ a system that will provide your buyer with a quote prior to purchase. Most website hosts and online platforms provide plug-ins for this purpose.
Overpriced Art as a Strategy
At some point in your career, you may have occasion to create a piece that is truly just over-the-top. Maybe it’s exceptionally large, or made of expensive materials. Perhaps the added detail means that it will take you five times as long as usual. It’s a true master’s piece.
Because of the extra time and expense to create this master’s piece, you will have to price it at a much higher price than your regular work. And rightly so!
This higher-priced item can be used as a strategy for selling your other artwork. If you feature it on your website (or other venues) it can have the effect of putting your regular-priced work into context for your buyer. The master’s piece attracts the buyer in, but your more affordable pieces make the sale.
Be careful though. Retail spaces use this strategy as well. It’s called anchor pricing. They put their extravagant pieces front and center to attract buyers. But then close the sale on something a little more affordable. You don’t want your art to serve as the “pricing anchor” of a retail space if you are working on consignment. Your piece will likely never sell if it is priced way above the other work. Before you agree to a consignment agreement, make sure that the prices of your artwork fall in the middle to upper-middle of the retailer’s price range. If you fall at the high end, you should consider creating some smaller pieces with lower price points to go along with your offering.
When to Increase Your Prices: Better Art, Context & Recognition
At the beginning of pricing your art, you will be experimenting with price points that are profitable, but also palatable to your buyers. You “should try to settle on a pricing scheme as quickly as you can so that your pricing doesn’t appear to be inconsistent. But, you will need to do some adjusting to get to that point.
Once you have settled on a pricing scheme, you should stick with it. Don’t just raise your prices because it “is time.” You should have a reason for the raise. Remember, you may have to justify the increase in cost to repeat collectors.
There are a few reasons you should raise the price of your art:
- You are making better art. As an artist, you are always developing your work. It is expensive to take workshops, study with masters, and use better quality materials. All of this results in better art and increases its value.
- You have improved the context in which your art is found. Your buyer’s perceived value of your artwork is based in part on where they find your work. As an extreme example, your buyer will perceive that the value of a painting in the Smithsonian Museum has much higher value than the very same painting in a small town gallery. Likewise, your buyer will perceive the value of a sculpture on a beautiful and well-designed website is worth more than a website that looks like a MySpace page from the ’90s. Because of this, one of the easiest ways to increase the value of your artwork is to be very selective and careful about how it is presented. As you improve the context of your art, you will improve its perceived value.
- You have received a significant accolade or recognition. Significant accolades, awards or recognition also increases the perceived value for the same art. Examples include curated shows, museum shows, inclusion in publications, and even news coverage. These types of opportunities are not always paid gigs, but some of them can raise the value of your art.
- Inflation and increased costs. Over time, the cost to do business as an artist will increase. Your fixed costs such as supplies, hosting fees, shipping will eventually raise. No artist should go out of business because of inflation or increased costs. Don’t be left behind. Make sure you are keeping great accounting records so that you recognize when it’s time to raise your prices.
Allowing Others to Adjust Your Pricing
There is some danger to allowing art professionals to raise or lower your retail prices without your knowledge or permission. But, there will be times when it is simply out of your control.
When other people change your pricing, it can be upsetting to both your collectors and your other venues. Inconsistent pricing can result in your collectors feeling like they overpaid. It can also result in your other venues feeling like they have been undercut.
In one case, a fellow artist was very excited to have her paintings represented in a gallery in Carmel. To her, having artwork in Carmel, California, meant that she had “made it” as an artist. The gallerist was shrewd. He found work from out of the area that had a lower wholesale price point and then tripled or quadrupled the price for his retail outlet. This shorted the artist of a large portion of the sale. It also upset a collector who had purchased a painting for $2600 only to find similar work from the same artist online for $750. The collector felt she was overcharged.
In another case, an artist sold her artwork on several well-known online venues. She was careful to make sure all of her pricing was consistent, knowing that collectors will comparison shop. Unknown to her, one of the venues began to cut the price of her work by 40%, leaving the work on a perpetual “sale.” As this began to draw business away from her other online venues, one of her better retailers confronted her. In the end, the artist will be held responsible to ensuring that all of the venues are using consistent pricing so that one doesn’t have an unfair advantage over the other.
Although these examples demonstrate some of the pitfalls of allowing others to determine your pricing, there will be times when it is simply out of your control. If a buyer purchases your work outright, the buyer has the right to sell it at any price. You really can’t control that. Likewise, galleries and online venues will (and should) run sales and offer special discounts to their best clients. Some discounts are just part of doing business. The trick is to make sure that the sales and special discounts are not an ongoing thing. A collector should not be led to expect that your work is always 40% off. Discounts should create a sense of urgency for the buyer.
When It’s Okay to Discount Your Art
As mentioned above, it is very important to keep your pricing consistent. However, there are instances when it is okay to discount your work:
It’s okay to sell work for a lower price if the same type of work is not available in any of your retail outlets. For example, if you sell sculptures at retail outlets, it is fine to discount any jewelry you make so long as it is not represented anywhere else. Likewise, it is okay to discount your postcards when you only have original paintings in your retail outlets. This would also be true for experimental works and seconds that don’t quite meet your high standards.
It’s okay to offer discounts “to the trade.” You may be contacted by an interior designer or an art consultant that is looking for art for a design project. You should offer them a discount for placing your art. Designers and Art Consultants earn a commission for placing your art. They will charge their client the full retail amount, and you will be paid your wholesale rate.
It’s okay to discount the work you are closing out. Over time, your work will evolve. You will make work that is different from prior works. At some point, you will have “moved on” from what you are making now. When you’re ready to let go of the old work that didn’t sell, it’s okay to discount it.
How to Handle Art Hagglers
Many buyers will find your work in a retail setting will look you up online and try to negotiate a lower price. While you can’t blame a shopper for trying, it is best to decline these offers as your retailers will not do business with artists who undercut their prices. This is true whether the retailer is an online catalog or a brick-and-mortar shop. Either way, the overhead to run a retail establishment is high and if you undercut their prices, you are stealing their marketing dollars.
The best way to handle a retail haggler is to offer an alternative. For hagglers that simply can’t quite afford your retail price, offer to break the purchase up into several payments. You could also offer free shipping. Don’t ship the work until it has been paid for.
But some hagglers can more than afford the work. They just like to wheel and deal. For these hagglers, offer to throw something else into the mix. Free shipping, or adding in one of your preliminary drawings or sketch may do the trick. If they live close enough, you could offer to deliver and install the work or invite them to your studio. If they live far, you could offer to add in a few of your smalls that you don’t normally sell at retail like postcards or jewelry.
