One of the more difficult things to do is to place an appropriate value on your
own personal creations. Charge too much for your art and nobody will buy it, charge
too little, and you waste time, energy, and talent. Even artists with years of experience
can have difficulty pricing work, because
many of the rules that apply to other commodities
are not relevant to art.
The challenge we face is finding a price that strikes a happy balance between being
a motivating reward for the artist, and perceived good value for the buyer, so that
both parties are encouraged in future sales. After all, our collective goal should
be to establish an ever increasing pool of satisfied customers who are happy to
buy your work on a repeat basis.
There's plenty of information below to help guide you so you can either wade through
it all, use the menu to pick out the solutions to your own dilemma, or perhaps go
cynic hunting... either way,
best of luck with it all.
Using pricing and sales to build credibility
In the offline world, all reputable and established art galleries are fully prepared
to explain their asking prices to anyone who asks. This is how the business end
works. You may not be asked online, but you should at least establish in your own
mind, that the price you set is not only fair and reasonable from your point of
view, but also represents good value to the buyer, especially if you are unknown.
Dealers know that collectors constantly compare prices from artist to artist, and
from venue to venue. That's how they get good at collecting and they are concerned
about how they spend their money.
While ArtSales.com.au gives you broad exposure and will offer as much help and advice
as we can, you are essentially your own dealer and will need to establish market
credibility online, in much the same way as a regular dealer would.
This is done through consistent pricing, and by building and referencing
a record of sales.
M A R K E T E S S E N T I A L S N o . 1
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PROTECTING YOUR ONLINE REPUTATION
The buyer feedback feature, on your individual gallery page, provides a record ofprices
for works sold, and levels of previous buyer satisfaction. It largely constitutes
your onsite reputation, as people can see at a glance, if your pricing and service
is consistent, and the level of satisfaction previous buyers have experienced.
While the price and quality of your work is obviously important, online trust is
everything, and this feedback feature will contribute enormously to your sales.
As such, you should cultivate it carefully.
Excessive amounts of poor feedback,
a verified instance of fraud or other serious complaints,
will result in artists or resellers being removed from this site.
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Pricing art for resale
There are many resources available for pricing works by known artists and some of
the more reputable art auction houses should be able to help you, if you are not
comfortable pricing it yourself. Alternatively, you can consult the online resources
listed below:
www.findartinfo.com
Free art information and extensively illustrated database
www.artbusiness.com
Purchase price reports
www.artprice.com
Purchase price reports covering 342,000 artists
www.aasd.com.au
Past auction results of over 280,000 works (Australian)
www.artnet.com
Illustrated archive of 2.9 million international auction results
www.sec1.artfact.com
Free access to art price database after registering
This list is by no means exhaustive and a Google search (try searching the individual
artist) will undoubtedly reveal further resources. For unknown or unrecognized artists,
again consulting auction houses, or even referring to some of the sections below
may help.
Provenance
Provenance is a record of origin or source, in this case, of a work of art. The
provenance of works of fine art often assumes great importance. Documented evidence
of provenance for a work can help to establish that it has not been altered and
is not a forgery or a reproduction. Knowledge of provenance can help to assign the
work to a known artist and a documented history can be of use in helping to prove
ownership. Providing a certificate or evidence of provenance adds to the value of
a work, and should be factored into pricing.
It's to your advantage to include provenance or a reference to it in the artist's
information section on your gallery page.
Click here to
learn more about provenance.
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Pricing for established artists
If you are already established, the best way to justify your asking prices is to
do exactly what the galleries do. Present documentation that you've been selling
art consistently for dollar amounts that relate directly to what you're charging
here. (Please see the section below on sensible long-term marketing.) The more records
you have of recent sales through dealers, galleries and agents, directly to collectors
from your studio, or over time, through this site, the better.
Listing exhibitions and collection inclusions will also help establish credibility.
If recent sales have been inconsistent or erratic, or it's sometime since you have
shown, some of the approaches below may help.
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Pricing for new and emerging artists
Many artists have difficulty in stepping back from their art and looking at it from
a business perspective, but unless you have a wealthy benefactor shielding you from
the usual economic realities, this is where we must start. At the most basic level,
if it costs you $50 to produce a work and you sell it for $30, (unless you do so
just to see if you can sell something), then its charity not business, and you will
go broke. Let's assume, however that you would like to make a profit.
After establishing the cost of production as your fundamental starting point, you
will find a selection of methods for pricing. It's unlikely that anyone will agree
with all of these models, but you should be able to find one or a blend of approaches
that suit you.
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Pricing art: cost of production model
Consider yourself as an artwork employee. Set a reasonable hourly rate, let's say
$20 and then factor in the cost of materials, for a small oil, we have a canvas
and paint, let's say $35. If it took you 20 hours to produce the finished piece,
the cost of production would be $435. Some people will be happy to use this as the
price, while others will use this as a starting point, using some of the following
models to adjust the final price.
M A R K E T E S S E N T I A L S N o . 2
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BREAK EVEN PRICING
While the cost of presenting your work on ArtSales.com.au is small,
this cost should also be a factor in pricing. Let's say you want to sell an artwork
for $22.00...
cost of uploading
= $10.00
10% commission on a $22.00 artwork = $2.20
cost of postage = $10.00
cost of selling your artwork: TOTAL =
$22.20
In this example it would actually cost you money to sell your work!
That would be charity and not business, so calculate this costing as being
the bare minimum starting point when pricing your work.
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Pricing art: comparison model
Base prices on how much other artists charge who work in similar mediums, sell through
similar venues, create similar art, and whose accomplishments and market standing,
experience, and quality of work are comparable to your own.
Whenever you set prices by comparison, be certain to use works that have sold, and
sold recently. There is no point in borrowing a pricing policy that hasn't worked
or is outdated. Supposing your "comparable" artist has a show with prices ranging
from $2000-$25,000 and it closes with only pieces in the $2000-4000 range selling.
This result tells you that collectors balk at paying anything more than $4000 for
this type of work. The price range for your art therefore, is from $2000-4000, with
anything higher likely to garner a similar response.
The key is to look at what is actually selling. Some artists will price original
work at higher than market value in order to make their expensive limited edition
prints of the same work, seem like more of a bargain. Why buy the original for $100,000
when you can have the same signed limited edition print for $500? In this case you
would not use the original for price comparison because the tactic here is to sell
prints, not originals.
The comparison model is a good way to remain competitive. Alongside money, the topic
of competition is one that some people find irksome. However, the fact of the situation
is that you are in competition with other artists, not just for available sales,
but also for available display space once the work has sold. To improve your chances
of being sold and therefore seen, consider charging the same or even a little less
than what you determine to be the "going rate", and while we're on this topic, reading
the section on long-term
sustainable marketing below, will add another dimension to your appreciation
of this strategy.
Also, don't just use other artists on ArtSales.com.au for your comparisons; get
out and visit galleries and art fairs, look in newspapers and magazines, and do
research on the internet to get a full idea of price ranges.
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Pricing art: incremental model
A longstanding system for beginning artists is to enter the market with very low
prices, (but don't forget to cover your costs.) Starting low encourages buyers to
take an early position in your career. This method quickly wins collectors, especially
those who are also just starting, and helps build confidence. When you are selling
well, then is the time for higher prices. There's no shame in starting low, and
there are few things better than a ten cent stock that goes through the roof.
Some artists suggest the opposite strategy, starting very high and lowering prices
until you find a buyer. This carries a good chance of disappointment, and constantly
lowering your prices looks to the market more like gradual defeat than steady success.
After a few sales at the bargain-basement level or if you sell more than half of
your work within 6-12 months, you can implement price management more professionally.
The incremental model has the advantage of pricing your work, not according to what
you think your it is worth (and lets face it, we all think our work is worth more…),
but at a point you know the market will actually bear.
Your prices can always go up but coming down does not look healthy. Prices should
rise sensibly and regularly and for many artists, between 10 and 20 percent once
a year usual. This will add interest and a patina of investment quality. If you
raise prices on the same date each year, you can use this to encourage sales by
announcing increases a month before hand.
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Pricing art: square inch model
Many galleries and some more experienced artists set prices based on the size of
a piece. Not that bigger is better, but be aware of buyer beliefs: with rare exception
collectors associate larger works with higher prices. Keeping this in mind, you
may find greater acceptance for higher priced items when they are presented in larger
sizes. There are always exceptions though, and some miniatures sell for very serious
prices.
OK, back to the 'nuts and bolts'. A formula you can use is based on calculating
the square inch price of a typical piece that sold. (Ideally use your own work,
but the comparison model would also work.) This square inch price is then used to
determine the base price of new paintings (square inch price x square inches.) When
using this formula, you may want to round off prices to the nearest $25 or $100,
depending on size.
You may even want to simplify this by having a sliding scale from small to large
works. If you do this, keep your price list simple and stick to standard sizes.
This approach has the advantage of taking the emotional agony out of pricing decisions.
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Pricing art: advice model
If there is someone in the art industry with experience, whom you know and trust,
you can ask them for their advice or help in pricing your work.
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4 things you should do when pricing your art
Provide an entry point
Art buyers come in many shapes and sizes - and with varying budgets, as well. Offer
art in all price ranges. People who like your work, but can't afford the big stuff
should at least have the opportunity to come away with something. Consider creating
prints, posters or other lower cost artwork in order to give buyers an introduction
to your work, and a way for them to begin to become repeat buyers. These are your
biggest fans, your collector base, the people who will stand by you throughout your
career. Do whatever you can to provide them with art. These are the same buyers
who one day may be willing (and able) to pay a higher price for originals.
Target your market
If the bulk of your potential buyers are in the lower income categories, (they may
be students for instance), make sure they can afford at least something you produce.
Better yet, make sure the bulk of your art is geared towards that market. For collectors
who have the ability to spend larger sums, have a selection of major works available.
Keep pace with your market
Unless you suddenly find yourself in the spotlight with people lining up to buy
your work, keep price increases reasonable. You don't want to price your most faithful
fans and long term collectors out of the market. They're the core of your support.
Cultivate your market
Make the step up between the inexpensively priced pieces and the more expensive
ones very clear. This doesn't mean the less expensive pieces should be rejects.
Quite the contrary; they should be enticements to buy the more expensive ones -
indications of the qualities they can expect. Put collectors in positions of desire.
Make sure those little pieces serve as constant reminders of what they can really
own if they decide to spend more money.
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5 things not do when pricing your art
Do not price on personal significance
There is always the temptation for artists to equate dollar values with psychological
factors such as:
•emotional attachment to a work
•personal dislike for a work
•personal breakthrough while creating a work
•degree of angst experienced while creating
a work
•the subjective opinions of other people
Never entertain the belief that any of these psychological factors should allow
you to place special meanings and, therefore, special asking prices on certain works.
This may make sense inwardly, but to everyone else including collectors for whom
these 'special meanings' do not exist, these prices look inconsistent and unprofessional.
If you believe a work is special, keep it off the market and add it to your personal
collection. Picasso kept most of the pivotal paintings he ever did - Picasso's Picassos
- which he used for inspiration, reference, and to base other works on. This is
a truly professional approach as your work benefits, your market presence remains
consistent, and the value of your own collection increases by containing many important
works.
Do not 'deliberately' underprice works
Don't 'rip yourself off' by underpricing works you want to rid yourself of because
they cause you psychological discomfort: an artistic exorcism. Experienced collectors,
who bargain hunt for art, love it when artists under-price work based on feelings
rather than on more objective factors such as those discussed above.
Don't lower your prices
Doing so is unfair to your collectors and may harm your reputation. An alternative
to lowering prices is to produce works that are smaller, or made from different
materials.
Resist pricing based on exceptional sales
Don't let exceptional sales dictate your prices. If under any circumstances you
make an isolated sale for substantially more money than you ordinarily sell for,
do not immediately raise all prices to that level. Let average selling prices control
your structure, not exceptional ones.
Do not price on emotion
Don't raise prices based on whimsy, personal feelings, or because you think they've
remained the same for long enough. As with any other price setting circumstances,
be able to justify all increases with facts. By virtue of its mechanical nature,
an annual, pre-announced price rise, will be expected and therefore accepted, and
as mentioned, can be used as an effective marketing tool.
Buyers are reassured by things that are predictable and consistent, so consistency
in pricing is a cornerstone of successful selling.
"Artists should separate pride from price." - Eleanor Blair
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Sustainable long term marketing
One of the major advantages that ArtSales.com.au offers, is the opportunity to price
your work more competitively than just about any other art site on the Internet.
Other gallery sites generally work on traditional commission rates of 33% or 50%
of the sale. Due to our low 10% commission, you can afford to price your work significantly
lower here than you could any where else and still expect to make the same or even
larger profits.
This ability to price lower is of course extremely attractive to buyers, and encourages
repeat sales and increased traffic as more of the market learns about what we have
to offer. Given this scenario, there are essentially two choices you can make:
Price your work for maximum profit on each sale
This is a short term strategy probably better suited to resellers who may only have
a limited number of works to sell and to whom cultivating a following is not important.
OR
Price your work as competitively as possible to maximise sales
This is a long term strategy, better suited to artists, in that it will allow more
people to buy your work and more of it, which in turn, will let you build a collector
base more quickly than would otherwise be possible.
As demand and prices increase for your work, this continued ability to price competitively,
relative to other venues and outlets, will establish ArtSales.com.au as a desirable
port of call for the serious collectors who become increasingly important as your
career develops.
The more artists who adopt this strategy of sustainable long term marketing, the
more likely it is that ArtSales.com.au will develop to its full potential as a recognised
site for quality artworks, to the greater benefit of all who use it. The reality
is that some will, some won't and some will pitch their pricing some where in the
middle. Using ArtSales.com.au as a career tool, and the strategies that we offer,
is yet another factor to consider in pricing your artwork.
Whether your motivations are long term, short term, or totally capricious, the final
decision on pricing your work is inevitably a personal one, and one which artists
often find difficult. Proper pricing, along with quality and reputation, will have
a major impact on your sales and career as a whole. Hopefully these guidelines will
help and we wish you the best of luck with it.