Pricing Your Work

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=90 BGCOLOR="#006699" TEXT="#080000" background="05bfd5a3.jpg"> <div> <B>Pricing  Your  Work </B></div> <div> <B>6260 N.W. 19 Street, Sunrise, Fl. 33313 Toll Free 1-877-512-3333    Email: </B><A HREF="mailto:mike@mikealbin.com" TARGET="_top" TITLE="mailto:mike@mikealbin.com"><U><B>mike@mikealbin.com</B></U></A></div> </td> </tr><tr> <td valign="top" width=210 BGCOLOR="#FFCC66" TEXT="#080000" background="05cd2043.jpg"> <bR> <div> <A HREF="index.htm" TARGET="_top" TITLE="Mike Albin.Com "><U>Mike Albin.Com </U></A></div> <div> <A HREF="wd.htm" TARGET="_top" TITLE="Web design"><U>Web design</U></A></div> <div> <A HREF="ma.htm" TARGET="_top" TITLE="Marketing Articles"><U>Marketing Articles</U></A></div> <div> <A HREF="sr.htm" TARGET="_top" TITLE="Show Reviews"><U>Show Reviews</U></A></div> <div> <A HREF="mt.htm" TARGET="_top" TITLE="Marketing Tools"><U>Marketing Tools</U></A></div> <div> <A HREF="l.htm" TARGET="_top" TITLE="Links"><U>Links</U></A></div> </td> <td valign="top" height=390 BGCOLOR="#777777" TEXT="#080000"> <div> Pricing Your Artwork</div> <div> The biggest mistake most artists make and the reason most artists fail is not properly pricing their artwork.  IT’S IMPOSSIBLE TO MAKE A LIVING AS AN ARTIST IF YOU ARE LOOSING MONEY EVERY TIME YOU MAKE A SALE!   Most artists price their artwork way too cheaply for a number of different reasons.  1) Lack of confidence in their skills as an artist.  2) Fear that their work will not sell at higher prices. 3) Overall feeling that their work is not worth a great deal.  4) Fear of rejection for asking a high price. 5) Not knowing how to figure their true cost of producing the artwork. 6) Pricing your work based on what others are charging for their work. 7) Pricing their work at a high price almost feels like they are cheating the people that buy from them.  This is very closely related to (number 3), my work cannot be worth that much.  Some artists actually feel guilty about raising their prices, they feel it’s dishonest and they don’t want to cheat the public.  8)  If I price my work with higher prices some people will not be able to afford it and I want everyone to be able to buy from me.  Probably the biggest reason: Fear!  Fear of failing, fear of succeeding, fear of what people might say, fear of someone else selling cheaper than they are.  Fear and insecurity are the two major reasons artists sell their work way too cheap!  I actually spoke with an artist that told me if she raised her prices her customers that have been buying from her for years would get mad at her.  I asked her if she gets mad at the gas station owner, insurance agent and grocery store manager when they raise prices?  As your expenses go up you must raise your prices to stay profitable.  Raise your prices and if someone comes by and complains, simply explain to them that your costs are going up and you must raise your prices to stay in business.  If the customer still gets upset and you don’t want to loose that person as a customer, continue selling to them at your old prices but everyone else is still paying more.  I’ve also spoken with several photographers that have been doing shows for more than ten years that tell me they are charging less now for their work than they were ten years ago.  “I have to lower my prices because Steve lowered his prices.”  It’s the airline business mentality.  A lot of people do price shop when buying airline tickets.  They are looking for the cheapest way to get from point A to point B.  It’s not the same when you are selling artwork.  If your photography looks exactly like Steve’s photography and you process your photos exactly like him then maybe you should price your work to compete with him.  But if your images and your processing is different than his than feel free to charge differently.  Offer better service than Steve, offer better/more framing options and offer different sizes. Your artwork is uniquely yours and your prices should be based on your overhead, not what Steve is charging!  You think Fuddruckers (cq) goes into a panic every time McDonalds sells 39 cent hamburgers?  Does Jaguar lower their car prices to be more competitive with Saturn or Kia?  There is a market for both and both companies price their products based on their own costs, not what others charge for theirs.  There are a lot of companies out there that do price their products to compete with their competition but before lowering their prices they figure out a way to cut their costs and make their product cheaper.     </div> <div> As an artist and business person, you really do have to become a business person to survive and be successful.  YOUR ARTWORK PRICES SHOULD BE BASED ON YOUR OVERHEAD COMBINED WITH THE COSTS INVOLVED WITH TIME AND MATERIALS THAT WENT INTO MAKING EACH PIECE OF ART.  PERIOD!  If you base your prices on what others are charging for their work you better make sure you know what their expenses are and be very sure your expenses are the same or cheaper than theirs.  Also make sure they know what they are doing.  If you base your prices on what someone else is charging for their work and they are clueless to what their actual expenses are, you’re both going to fail!  </div> <div> So how do you know what your actual costs are?  I’m glad you asked!   First there is the actual costs of the materials that went into making this piece of art.  Second is the time involved in making the piece.  Figure up how many hours from start to finish it takes to make.  Now pay yourself 20.00 to 25.00 dollars per hour for making it.  Add this up with the cost of materials.  For example, let’s use a painting on a 24x30 canvas that takes you 20 hours to paint.  Cost of canvas and paint about $40.00.  Time costs, 20 hours at $25.00 per hour equals $500.00.  Total costs of time and materials is $540.00.  This is what most artists consider to be their cost of each piece and where they go terribly wrong.  If you live in your parents basement, rent free, and have people stopping by to buy your work with no costs involved in advertising, travel, show fees, hotels, car/van, gas etc.  Then stop right there and you know what your costs are.  Wait, you have to travel to shows, pay show fees, pay your mortgage payment, car payment, gas and electric bill and this all comes out of your pocket?  You better start factoring in those costs to find out what it really costs to make each piece!   </div> <div> Let’s base your costs on what it cost you to do business last year.  We’re going to take business costs for a whole year and average it down to costs per hour.  Each show has so many variables and we all know that at some shows we sell more than at others so we’re going to average it out for a whole year and divide by the number of hours we work in that year and you’ll find out what your true costs per hour is.  </div> <div> To find this number, first total up your show fees for last year, add in travel expenses, hotel and gas expenses for the year.  Divide the total by the number of weeks you spend making your artwork.  Try to be accurate here, just factor in time you spend making your artwork and not the time you spend on the road and vacations here and there.  There are 52 weeks in a year, the number of weeks you work making your art should be around 45-48 give or take a week or two.  (Show fees+ travel expenses+ hotel expenses+ gas money divided by the number of weeks you spend making your art).  This is your weekly costs for selling your artwork.  Now how many hours a week do you spend creating/ making your art?   Divide your weekly costs by the number of hours you typically work each week and you will get your hourly cost for selling your artwork.  Multiply the hourly cost number by the number of hours it takes you to make a particular piece of art and add this to your time and materials total for that piece.  </div> <div> Example: These are just random numbers to illustrate. Show fees for one year $6000.00. Gas, tires, car repairs, insurance, etc. $3000.00, hotel expenses $3500.00. Add those expenses up to get your total for the year, $12,500.00 divided by 46 weeks working equals $271.74 divided by 35 hours per week making art, (don’t forget to spend at least 5 hours per week on your marketing, this time is not added in and is based on a 40 hour work week). I know most of us work way more than 40 hours a week but your expenses should be based on an average 40 hour week with time for office/marketing tasks taken out. This equals $7.76 per hour added into your time and materials. Referring back to the painting that takes 20 hours… 20 times $7.76 equals $155.20 added to $540.00 (time and materials) and our costs are going up! Now we’re at $695.20, our cost for making the painting.</div> <bR> <div> One more time done all together </div> <div>                </div> <div>                 $12,500.00    (your expenses for the year for doing shows)</div> <div>                 Divided by 46 (weeks you work making your art per year)</div> <div>                 Equals $271.74 ( this is your cost per week)</div> <div>                 Divided by 35 ( hours per week you spend making your art)</div> <div>                 Equals $7.76 (this is your costs per hour for selling your work)</div> <div>                 Times 20  ( hours it took to make our 24x30 painting)</div> <div>                 Equals $155.20   </div> <div>                 Add     $540.00 ( time and materials)</div> <div>                 Equals  $695.20 (total cost for painting)</div> <div> We’re not done yet! We still have to factor in overhead expenses.  I’m assuming you don’t live with your parents?!  Mortgage, car, electric, water and phone all have to be paid from selling your artwork.  We need to get these into an hourly rate so take your totals for one month and multiply by 12 (months in a year) and then divide by the number of weeks you work, then divide again by the number of hours per week you work.  Examples: mortgage $800.00, car $350.00, electric, phone, water, etc $300.00.  Total these up $1450.00 (this is monthly overhead expenses) and multiply by 12 equals $17,400.00, divided by 46 weeks equals $378.26 divided by the number of hours we work each week producing work (35) equals $10.81.  Multiplied by the 20 hours to make the painting equals $216.20.</div> <div> One more time:</div> <div>                     $1450.00 (monthly overhead expenses)</div> <div>                      Times 12 (months in a year)</div> <div>                    Equals $17,400.00 (Yearly overhead expenses)</div> <div>                    Divide by 46 ( number of weeks you work making your art)</div> <div>                  Equals $378.26 ( your weekly overhead expenses)</div> <div>                   Divide by 35 ( hours per week you work)</div> <div>                   Equals $10.81 ( hourly overhead costs) </div> <div> Now we can figure out what our true costs are for making the painting that takes 20 hours to paint.</div> <div>              $40.00 Canvas and paint</div> <div>            $500.00 (20 hours of your work @ $25.00 per hour)</div> <div>            $155.20 ( cost for selling your work )</div> <div>            $216.20 ( cost for overhead)  </div> <div>            $911.40 ( your total costs for painting that takes 20 hours) </div> <bR> <div> There are many other costs involved in our day to day lives, food, clothes, movies, entertainment, nice things for your home, flowers for your wife and toys for your kids.  All of these expenses come from your profits.  If you sell at cost or too close to cost then there isn’t much left over for the extras in your life.  </div> <div> So what should you be selling your painting for?  Remember you are a business and do you know any business person that sells for cost?  No, and neither should you!  Truthfully, you should double your costs and this will be your wholesale price,( $911.40 x 2 =$1822.80) the price you sell to galleries for.  Then double that price and you come up with your retail price, ( $3645.60) the price you charge at art shows.  </div> <div> There are artists on the show circuit selling their 24x30 original paintings for well over that $3600.00 figure and way too many artists on the show circuit selling their paintings for way below that.  The only difference between them is one group has more confidence in their abilities as artists and as sales people than the other group.  Car companies charge different amounts for different cars, why do you think just because Steve is selling his artwork for $200.00 you have to sell yours for that amount?  You are in business for yourself and you set your prices.  Your artwork is your original work and the only place to get one of your pieces is through you.  If a patron comes in your booth and asks, “Why are your paintings more expensive than Steve’s paintings three tents over?”  This is your golden opportunity to say, “Please sir, step into my booth and let me show the kind of quality work I produce and the attention to detail in each piece.  My pieces are investments and go up 20-30 percent a year.  My edition numbers are very low on my prints making them more valuable.”  DO NOT TALK BAD ABOUT ANOTHER ARTIST OR THEIR WORK IN AN EFFORT TO MAKE YOU OR YOUR WORK LOOK GOOD!  Stay positive and talk about the positive aspects of you and your work and you can usually make a sale.  </div> <div> Now you should see why it’s business suicide to base your prices on what others are charging for their work.  You’re selling artwork not television sets.  If I want a Sony XP1000 wide screen television I can shop around for the cheapest price.  It’s the same television set no matter where I buy it from.  Some dealers may offer better service or better service plans and that’s something to consider when spending big bucks for a TV.  If one business charges $100.00 more but offers in home service then it might be worth it to pay the extra $100.00.  Think of all of the advantages to buying your work, “I’m happy to deliver any of these larger pieces on my way out of town tonight,” or “I’ll be happy to ship it to you when I return home. I’ll take care of packaging and insuring the piece for you.  All you have to do is sign for it when it arrives!”  “This is one of my latest creations, I have developed my own techniques through years of practice and you can see the effect on the roses right here.“  These are reasons people buy from artists that charge more for their work.  Come up with your own reasons, write them down and practice saying them at home and while you are in the car on the way to the show.  When they come out of your mouth they should sound natural, just like you are explaining them to your neighbor or best friend.            </div> <div> One last note, once you figure up your costs for making each piece, NEVER, and I mean never sell below cost.  Not even to someone that wants to pay cash for ten of them!  IF YOU SELL BELOW COST YOU ARE LOSING MONEY BY MAKING THE SALE.   I’m pretty sure you did not go into business to lose money.  If you mark your artwork up high enough, it’s a lot easier to come down on price occasionally to give someone a deal.  Good luck out there selling your work!  Start charging for what it’s really worth.  There’s no greater satisfaction than selling your work at a good profit margin!</div> </td> </tr></table></body>