Sunday, January 1, 2012

How to Price Your Art

Being clear and consistent when pricing your art gives you credibility as an artist. Just as consumers expect clear consistent pricing when shopping for milk at the grocery story or for a new refrigerator at Fred's Appliance Palace, they also expect that when shopping for art. Price structures that are difficult to understand or explain or are problematic in other ways do not engender confidence in buyers and do not encourage sales. A clear consistent price structure means that every work of art you create is assigned a dollar value that relates to the dollar values of all other art that you create. In other words, all art is priced according to the same basic principles, determined by you and/or those who best know your art, so that the price of any individual work of art makes sense within the context of the rest. Pricing rules and guidelines are based on unique characteristics of your art in combination with outside art market forces.
A main goal of sensible art pricing is that similar works of art have similar selling prices. You, the artist, decide what those similarities are based on criteria you choose. Those criteria become the measures by which you assess and ultimately price your art. Remember at all stages in this process that those criteria should be explainable to anyone with questions about your art, especially potential buyers.
A good first step in determining your criteria is to select one or more works of art that you consider typical of your current output and that display an average range of your skills. These would be pieces that you consider neither exceptional nor inferior in any way. If you work in more than one medium or style, select at least one piece that is representative of each.
Describe these works, in writing and in detail, in terms of basic physical characteristics as well as in terms of variables unique to your art. Basic physical characteristics include size, subject matter, color, complexity, weight, detail, cost of materials, time necessary to create, and so on. Variables unique to your art might include the number of dogs in the composition, theme, texture, frequency of use of the color orange, direction of the brush strokes, date produced, or degree of abstraction.
Avoid using subjective criteria to describe your art such as what it means to you, what its message is, how it makes you feel, and so on. Subjective qualities are important from intellectual and/or emotional standpoints, but not necessarily in terms of pricing as they can vary widely from one viewer to the next. No one, however, can dispute a work of art's size or subject matter. If, over time, you find that some of your art imparts similar feelings or messages to wide audiences, you may eventually be able to quantify those feelings or messages as price points.
Once you've completed your written descriptions, your next task is to set a base price for your chosen typical work or works of art. A good analogy to a base price in the art world is a base price in the car world, or the price of a car with no extras (this may sound crass, but it's how the overwhelming majority of art gets priced). A basic car model with no extras costs a certain dollar amount; models with "extras" cost more. How much more depends on the amount and quality of their extras.
Artists with gallery experience and consistent sales histories should already have base prices that typical works of their art regularly sell for. If you don't have a track record of sales, your base price should approximate what artists in your locale with comparable experience and sales records charge for similar works of art. Keep in mind that even though your art is unique, experienced art people like dealers, advanced collectors, consultants and agents make price comparisons from artist to artist all the time. Being able to evaluate your art from a detached standpoint by comparing it to that of other artists in your area is necessary in order for your price structure to make sense in the marketplace.
Once you've set your base price, use it as the norm to price the rest of your art in relation to that base, in terms of "extras" or lack thereof. "Extras," according to your descriptive criteria, are those characteristics that make certain works of art more significant, in your judgment, than others. If, for example, your typical work of art measures 20 by 30 inches and you base-price it at $1000, and you consider one measuring 40 by 50 inches to be more significant, you might price it at $3000. Similarly, you might price one measuring 8 by 12 inches at $400 because you consider it to be less significant, all else being equal. "Extras" that indicate price increases beyond the base are characteristics like more complex compositions, larger sizes, more intricate details, higher levels of technical difficulty, greater production times, and more expensive materials.
If certain works of art hold special meaning for you or represent critical moments in your life or career, but are not drastically different from your other art in terms of physical criteria, best procedure is to keep them off the market because the tendency is to overprice them. Isolated extreme prices may not make sense to viewers, and can even skew an artist's entire price structure in an unrealistic direction. If you can make a case to the art world as to why isolated works of art should be priced well beyond similar looking pieces, and the art world agrees with you, then fine. If not, save emotion- or attachment-based pricing for when you become famous and have greater latitude in how you present your art to the public.
As previously mentioned, your price structure should make sense to people who have questions about your art, such as why this piece costs more or that one costs less. Be able to explain how and why you set your base price, and how and why you set other prices higher or lower in relation to that base. Having a price structure that people who know art can understand is essential in order to move art from your studio to for-sale settings and ultimately to private or institutional buyers.
Once you've set your selling prices, don't change them without a reason. Any deviation in price, particularly in the upward direction, has to be justified. In other words, don't raise or lower your prices just because you feel like it. People generally shy away from art that costs a certain amount one week and a different amount the next; they prefer constancy in art prices.
And now for a few hypotheticals:
Suppose your price structure turns out to be too high-- people who like your art enough to ask how much it costs aren't buying. This means that you have to lower your prices, but by how much? Re-pricing somewhat below what comparable art by artists in your area sells for is a good starting point, but rather than arbitrarily cut prices either across the board or on a piece-by-piece basis, conduct an informal survey first.
Ask those most interested in your art how much they think it should sell for. Whenever you get the chance, also ask dealers, experienced collectors, consultants, fellow artists, and agents what they think. Put together as much of a consensus opinion as possible, and then reduce prices accordingly. Your goal is to generate sales with the new lower structure, so make sure reductions are in line with or even slightly greater than consensus opinion. You want to avoid having to reduce prices again, but you don't want to make your art so inexpensive that people won't take it seriously.
Suppose your art becomes popular with the public and sales are brisk. When demand reaches a point where a good percentage of your art, at least a third, sells within several months of its appearance on the market, think about raising your prices. A price increase is also in order when demand for your art regularly outstrips demand for art by your contemporaries.
As you become better and better known, a brand name, so to speak, your art begins to merit premium pricing, or pricing beyond that of your contemporaries. Exactly how much that premium is depends on the significance of your accomplishments (shows, awards, news coverage, etc.) and the constant or, better yet, expanding interest in your art. Depending on how well known you get, continue to price according to what "the competition" charges, but who that competition is will likely evolve from local artists to regional artists, and possibly even to national or international artists. As you advance in your career, always be aware of what circle of artists you are perceived as belonging to and how much they charge for their art.
Suppose that with the passage of time or as tastes in art change, that one type of your art finds favor with collectors while demand for your other art remains modest. Raise the prices of this in-demand art above that of your other art, and price earlier examples higher than those you're currently making. For example, if collectors come to like your abstracts much more than your landscapes, raise prices on all past, present and future abstracts, with prices for your earliest abstracts (those in the styles that receive the most attention) being raised the most.
Raising prices for the earliest examples of your most desirable art is somewhat similar to pricing antiques and collectibles-- the first edition of a famous book costs more than later editions, early Barbie dolls cost more those produced today, and so on. The significance of your "first" or "earliest" art only becomes apparent as you progress in your career. You have no idea how the public will respond to different styles of art when you first create or show them or what their legacy might one day be, but as that legacy becomes clear, price increases are in order.
Continuing with this line of reasoning, suppose, from a historical standpoint, a particular type of your art becomes significant beyond you as an artist-- in other words, as part of a movement or school of art. For example, let's say you painted large abstracts in the late 1950's. Prices for these abstracts will have to be raised, not necessarily according to how your own career has played out, but rather according to how abstract paintings from the late 1950's have been embraced by collectors. Prices for these abstracts may far outstrip prices for all other art you've created, regardless of the significance that you personally place on those abstracts, just because you painted them in a particular style at a particular point in time.
No matter how old you are or how long you've been making art, know that art prices fluctuate over time as a result of a variety of factors. Set your initial price structure according to characteristics of your art and of your local or regional art market, but be ready to revise those prices at any time (assuming adequate justification). The more you're aware of market forces in general and how people respond to your art in particular, the better prepared you are to maintain sensible selling prices and maximize your sales.

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