Do you feel like you’re shooting in the dark when it comes to pricing your custom artwork?
You’re certainly not alone.
With something as personal and unique as art, many artisan entrepreneurs struggle to develop a pricing model that generates consistent sales, reflects the time and effort invested, and turns a healthy profit.
The truth is, there’s no magic formula.
So, rather than offering a standard solution, we’ll explain the key factors you should consider – and how to keep your emotions out of the equation. Then, we’ll look at some pricing methods for inspiration. Taken together, you can create a customized pricing system that works for you.
Remove Your Emotions from the Pricing Process
Jill Tarabar of JIST Designs has been designing and creating stained glass gift items, Judaica, and artwork for close to 40 years. She’s sold her pieces at respected, juried events like Sugarloaf Craft Festival and the Pennsylvania Guild of Craftsmen in Rittenhouse Square.
Despite these accomplishments, she notes, “The biggest challenge I’ve faced has been maintaining a level of confidence in my work and abilities, a level of self-worth. It’s taken me years to build confidence in the value of what I create. Self-confidence is vital but challenging to maintain.”
She attributes this partly to the fact that she’s self-taught. However, it’s a struggle that many artists face regardless of their formal training or experience.
For emerging artists, that’s an important takeaway. The critical voice in your head probably won’t go away with time. But you don’t have to listen to it – and you shouldn’t let it direct your pricing decisions.
To make sure a lack of confidence isn’t affecting your prices, ask yourself these questions:
- Am I frequently changing the price of a piece depending on the buyer?
- Am I comparing my art or craft medium to others, assuming mine has less value?
- Am I setting the price of each piece based on my own perception of its quality?
- Am I properly accounting for the value of my time?
- Am I offering drastic discounts that imply the art isn’t as valuable?
It’s not easy to stop doubting yourself, but having a set pricing method will go a long way in helping you avoid these pitfalls. Let’s talk next about the variables that go into a pricing model.
6 Questions to Ask Before Pricing Your Artwork
By working through these six questions, you’ll have more clarity on the true cost of each custom piece, be able to factor in profit margins, and gauge what the market will bear.
- How much time does each item take to produce?
Getting specific about how much time you spend on an item is the first step. Break down each part of the process, so you can identify opportunities to simplify and speed up your work.
For example, if you create custom woodcrafts like jewelry boxes, you might build templates for a particular cut or feature, making multiple components to assemble later. Alternatively, you may discover it’s better to outsource parts of the process that you find time-consuming or difficult.
- What is an hour of your time worth?
Once you know how long it takes to produce a single piece, multiply that by your hourly rate to arrive at your labor costs.
Naturally, there’s no clear standard for an artisan’s hourly rate, so you’ll need to come up with a figure based on supply and demand. Consider these questions:
- Are there few artisans who can produce what you do? The more original you are, the less competition you have.
- Are you exceptionally skilled at your craft? The more skill you have, the higher your rate should be.
- Do you have a following (online or otherwise)? This increases your perceived value.
Look for actual jobs that match what you’re doing (or somewhat closely) and check the pay. For example, The United States Bureau of Labor Statistics reports that Craft and Fine Artists earned a median hourly rate of $23.54. This is a good starting point.
- What are your material costs?
Next, you’ll need to assess the cost of materials per piece. If you’re buying supplies in bulk, figure out how much you use for each item.
Don’t forget to include expenses like renting studio space, outsourcing any production, gas or electricity to operate machinery, and maintenance costs for equipment. This should all be tallied up and divided by the total number of pieces you create.
- How are you selling your pieces?
If all you had to do was set up a table in front of your house to sell your artwork, you’d have a great profit margin. But unfortunately, that’s not the case. There are costs associated with how you sell your pieces, and you’ll need to factor this into your pricing.
Let’s look at a few examples:
- Consignment – Every consignment shop is different, but most will fall somewhere close to a 60/40 split. This means for each item sold, the consignment seller keeps 40% and the maker receives 60%.
- Wholesale – Almost all wholesale contracts work on a 50/50 split agreement. Keep in mind that retailers purchase wholesale orders upfront, whereas consignment shops pay after items sell.
- Gallery – Galleries also vary quite a bit, but a 50/50 split is common.
- Online to Consumer – While there are great benefits to developing a direct relationship with your art buyers, don’t overlook the costs of building an online marketplace. You’ll need to pay hosting and transaction fees, handle shipping, and drive traffic to your site through social media and paid ads.
- Art/Craft Fairs – Consider the cost of getting a table, the materials to make your booth appealing, transportation to/from the event, and your time invested in getting ready and attending.
- What’s the average price for pieces similar to yours?
Now that you have a better sense of your cost per item, it’s time to do some market research. Look for artwork that’s similar in:
- Style or medium
- Targeted audience/buyer
Next, examine the artist’s background.
- How many years of experience do they have?
- Do they have an online following?
- Are they well-known in their community or for the type of art they create?
Lastly, see if you can figure out how well their pieces are selling. For example, Etsy shows customer reviews, which will give you a sense of their volume. Many sites also show when the artist posted an item. If you find similar art but it’s not selling, you may want to exclude it from your research. Or at least keep it in mind as a caution for what’s “too high.”
Once you’ve narrowed your research down to a representative sampling of work that’s similar to yours, average the cost to smooth out any outliers. Since every artist has different ways of pricing their work, this helps to get a more accurate picture of what the “going price” is for work like yours.
- What would your ideal buyer be willing to pay?
Jane Yorty is the owner of Carriage House Style, a handmade goods boutique in Lancaster. As both an artist and retailer, she stressed the importance of setting a price that implies value. “The most important thing when pricing your work is knowing your market. Price creates a value…value creates demand…demand creates sales.”
Let’s say you’ve estimated your cost per piece, accounted for sales and marketing expenses, and added a healthy profit margin. But when you compare it to similar art in the marketplace, the price you came up with is much higher. You might start asking yourself, “Wow, is my work really worth that?”
Yes! Your art is worth what someone is willing to spend. If you’ve done thorough research and marketed your art to the right audience, a higher price creates more value, as Yorty pointed out.
3 Methods for Pricing Your Artwork
Let’s take a look at the three popular methods for pricing artwork. These should be more helpful now that you have an understanding of the variables that support these formulas.
Cost Plus Pricing Model
In this product pricing model, you’ll calculate the total cost of producing one item (materials, labor, and marketing), then add profit to arrive at the sales price.
For example, let’s say you create handmade metal signs. The cost per item is $100.
- Materials and machinery costs – $50
- Labor ($35/hour x 1 hour) – $35
- Marketing (Website and Etsy) – $15
Next, you’d add profit. You’d base this amount on what similar items are selling for in the marketplace and what you think your ideal buyers would pay.
What happens if you see similar items for $100? That’s your base price. How can you make a profit?
You’d have to look for ways to cut material costs, speed up the process, or explore more effective marketing strategies. For example, NextFab member Lauren Stamegna of The Fox & Sun increased production of her home decor signs by utilizing the laser cutting and engraver equipment at our Wilmington location. A much less expensive and time consuming option than cutting everything by hand.
Value Pricing Model
In the value pricing model, you base your price on what you believe buyers would be willing to pay. In a way, it’s simply removing the costs from the equation. You skip directly to market and buyer research.
This approach works best for artisans who sell highly sought after items or something that’s completely unique. When your artwork or craft pieces are fairly similar to others in the market, profit margins can be lower. That’s why it’s important to understand your costs.
Variable Based Model
With variable based pricing, you price based on a certain variable, such as size, weight, or dimensions. You’ll see this frequently with paintings or custom furniture.
For example, let’s say you charge $2 per square inch. A painting of 12×16 inches would be $384 (12x16x$2).
To arrive at the amount per variable, you may need to work backward. That is, select the price you think is in line with similar pieces and figure out what number would get you to that price point.
Keep Your Prices Consistent
Regardless of how you structure your pricing model, Genevieve Coutroubis of The Center for Emerging Visual Artists cautions, “The most important thing for artists to remember is that their price should remain fixed.”
In other words, your prices should be the same on your website, in a gallery, at art fairs, and anywhere else buyers might encounter your work. Coutroubis adds, “An artist can always extend discounts but it’s important for the work to maintain a set value.”
If you’re selling items to wholesalers, keep a primary price and then determine a scale for reductions based on volume. If you use a variable pricing model, stick with one amount (ex: $2 per square inch) for calculating prices.
This consistency shows professionalism and confidence.
Need Help with your Crafts?
It may feel impossible to reconcile your creative process with scalable business growth, but it can be done. As successful artisans can attest, when you get your pricing right, maintaining this delicate balance becomes much easier.
At NextFab, we help artisan entrepreneurs achieve their dreams. We’re a network of membership-based makerspaces that provide access to tools, technology, education, events, and services for makers of Philadelphia and surrounding regions. Contact us to reach an even broader audience with your handmade art or custom crafts.