If you are following this series of articles on the basics of Art Marketing you already know that a traditional way to describe marketing is called the Four P’s. The Four P’s are: Product, Price, Place (Distribution) and Promotion. In this article we will take a look at the basics of pricing your art and give you some food for thought to answer the question – “What should I charge for my art?” In the next article on Price we will explore various pricing strategies and how you might use them in your art business.
One of the many decisions you will face in running your art or creative business is how to price your products or services. In strict economic terms, price is the amount paid in exchange for goods or services. You may start with an asking price and settle with the true or exchange price if you are in to bargaining. There is an assumption that the final price paid is equal in value to the goods received.
Price vs. Value
Price is different from value. As mentioned above, price is the amount you ask or eventually sell your art for. For the artist (or seller such as a gallery or representative) the value of the art is quantified by the asking price. Things may not be so simple for the buyer.
Some of the things that go into value are:
This is one of the easier measures of value to quantify. Basically it is the sum of the ingredients that went into producing the art. This would include the materials, the amount of labor, marketing costs, and any overhead such as studio rent etc. that can be apportioned to a particular piece of art.
For example let’s say you make rings. A ring you make out of gold would have a higher intrinsic value than an identical ring made of silver. A ring set with a diamond would have a higher intrinsic value that the same ring set with cut glass.
This is where the fun begins! The intrinsic value of a painting might be very low; after all it is made up of some canvas, some paint and the labor it took the artist to paint it. For some art the subjective value and the intrinsic value may not be that far apart – I’m thinking of the starving artists sales that come through town a couple of times a year where no painting is more than $29.95.
At the other end of the scale is art that sells for a great deal of money – clearly the subjective value is much greater than its intrinsic value. What makes up this difference?
Your target customer
The old saying one man’s junk is another man’s treasure applies to your art. If you don’t match up your products with your potential customers they may not see your art as “treasure”. Be careful where you show or place your art and make sure that your prospects will place a value on your work.
Your brand, reputation and past sales history will have a large effect on the value of your art. If you are a well known artist then you should be able to command a higher price for your art. If you a less well known or not known at all you will need to develop or create your brand.
Don’t forget we are talking here about subjective value, an artist may have a history of producing very expensive artwork and then decide to create a branded line of goods to be sold in a discount store – in the eyes of the consumer there may be a great deal of subjective value associated with the artist and with these lower priced products.
You can have a great brand and mediocre art and be successful, it is much harder to have no brand, create great art and be successful. Having a great brand and creating great art is a dynamite combination!
When you have two or more products that are similar then the intrinsic value of the equation may have greater weight. If one piece of art is similar to another then they should probably sell for the same amount, right? – Probably not.
Genre / Style / Fashion
The price you can receive for your art may be influenced to a great degree by what is in fashion or in vogue. If your type of work is popular you may have a greater chance of getting a higher price. You may choose not to produce what is popular but you will have to work harder to find customers who value your style.
Many artists seem to think that controlling the distribution of their work is the key to fetching a high price – most of the artists who are successful employing this strategy have built the subjective value of their work in many other ways – most notably their brand. Some examples of creating scarcity include limiting the amount of work created, creating variations of limited editions (numbered, signed, lithographs, posters…), or by segmenting the geography where the work is available. Unless you have a great brand and your work sells quite well, creating scarcity may not be the best strategy.
When talking about subjective value investment always comes to mind. When people buy anything for investments (art, stocks, antiques, houses….) they are hoping that it will be more valuable in the future. In times when investors are awash in money, many types of investments are bid up in price because there is more money than art. When times are not so good, these types of investments may go down just as fast as they went up in better times.
Artists or art works that you compete against may influence the subjective value customers place on your work. To make this work you would have to be comparing similar artists of similar stature on similar types of work. Just having work that is comparable to a known work of art is probably not enough to create much subjective value.
If I hear another artist say, “My work won’t be valuable until I am dead, that’s why I can’t make any money, so I am just doing it to create art” – I think I will gag… The reason why dead artist’s work is valuable is because it is scarce. Not all dead artists’ work is valuable. The good thing (and about the only good thing) about this thinking is that you will never know if you were right or wrong.
Art also has a utilitarian value – some art may have more than others. If you are a pottery maker and you create vases then your work can also hold flowers. If you create paintings you are providing a wall covering at a minimum. The neat thing about art is that some of this utilitarian value is hard to measure. How do you measure making a home or office a pleasant place to be in or creating a good mood of feeling of the owner. These are the things that make up the “secret sauce” of your art.
In the next article on pricing we will take a look at some basic pricing strategies and how you might use them in your art business. Remember that establishing a price for your art is much more than supply and demand!
Neil McKenzie is the author of The Artist’s Business and Marketing ToolBox – How to Start, Run and Market a Successful Arts or Creative Business available in softcover from Barnes & Noble and Amazon and as an eBook from iTunes, Amazon and Barnes & Noble. He has developed and teaches the course “Artrepreneurship” at the Center for Innovation at Metropolitan State University of Denver, and is also a visiting professor at University College at the University of Denver.
Neil has over 30 years’ experience as a management consultant and marketing executive, working with some of the world’s top brands. Neil is a frequent lecturer to artists and arts organizations, a guest columnist for Colorado Biz Magazine, where he covers the creative sector of the economy, and the author of several articles for Americans for the Arts, a national arts organization. Follow Neil on Twitter: @neilmckenzphoto