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Posts Tagged ‘value of art’

Few things are more entrepreneurial than working in the arts, and yet most artists would be horrified to call themselves entrepreneurs, or even worse, business people. 

But business it is, and as well all know, business has been bad these past few years. And while every sector of business and industry has taken a hit, the arts, as usual, take a bigger hit than most. Retailers of all kinds have taken to discounting to clear inventory, despite evidence that continued price reductions in any field are hard to recover from.

Case in Point:  Last Fall, a major upscale women’s clothing retailer opened a new store near my home. It was a smart move, since the surrounding towns are populated by women who have bought from this line both online and through catalog sales. But aside from a stunted economy, it’s been a hard winter. The weather has often prevented people from going out at all, and the store’s sales reflect that. The parking lot is rarely full and the window boasts increasingly deeper discounts on already discounted items, representing cuts of 70-80% off original prices. What happens now? When new merchandise comes in, the locals wait for it to go on sale, not just once, but until reaches the rock bottom price they have now decided it is worth. What’s more, the original prices are now viewed as “overpricing.”

For artists, there is the added problem that the arts are perceived as a luxury—one of the first things to go when money gets tight. And while discounting may help a retailer trying to clear merchandise, as a strategy for artists, it can be disastrous.

Branding

Branding allows your public/audience to recognize you and your art, and to set a current value for it. (It’s very clear in music, where artists like Katy Perry and Lady Gaga had to create personas with new names to finally succeed).

Artists hate the concept of branding, and well they should. In a perfect world, they would be free to create without the weight of public perception bearing down on them. Major artists sometimes have the luxury of leaving this work to art managers and gallery owners who take on the full time job of marketing artworks and branding artists. The vast majority of artists, however, will have to take on some, if not all of the work of presenting themselves to the world at large.  Many do it successfully. (See my previous posts about Adirondack photographer Carl Heilman, II, and iconic musician Kenny Loggins for insights into how successful artists market their work through changing environments.)

 So, even though you may know nothing at all about marketing, if you plan to sell any of your art, you will have to develop an image that people will recognize in a few seconds as someone whose work they value. Yes, this is branding.

What is Your Art Worth?

Which brings us to pricing your work: How valuable is your art? This is a highly flexible concept, and how you approach it is crucial to your survival as an artist. It distresses me to see so many previously successful artists dropping their prices across the board, as this sends the wrong message to art buyers. It reinforces the belief that art is a luxury, and when it gets too expensive, patrons stop buying it or they buy it for less. In short, it devalues your work and the work of others as well.

The challenge to pricing is that nobody really knows what it should be. Some landscape artists follow a basic rule of a price per square inch for their work, while others look at the complexity of the project and the cost of materials. These are all good ways for you to do initial assessments of the value of your work, but for  a successful strategy that will survive the ups and downs of a long career, you need to think through the basis of your pricing structure thoroughly to preserve both your image and your income as an artist.

7  Steps to Help You Set Your Pricing

1)  Look at your entire portfolio as it stands now. Evaluate the quality of your work, and how it has grown and developed. Later work should not necessarily be priced higher, as it may be experimental, or just less popular, although your growth as an artist will be recognized and appreciated by critics and collectors.

2)  Take everything into account. Some works take longer, or cost more to produce. You need to recapture costs for time and expenses, or you won’t last long as an artist. Track the time and costs on each painting, sculpture, etc. Break down shared costs, like the cost of a kiln, paints, studio space, gas to and from your studio, to shows, etc. Create a master list of all the costs associated with your art (down to every pencil and a cost or percentage of the utilities at your studio or home) and then assign a time-associated general cost for doing your art. The easiest way is to start with a 1-day cost. Then calculate what part of a day, or how many days this piece takes you.

3)  Assign an overhead cost. For example, say a still-life takes you a half-day in the studio, while a plein air painting takes a full day out of the studio plus a half day of touch-ups. A portrait requires a 3-hour study, a day in the studio, plus a half day in touch-ups. Do the math based on your 1-day general cost, and assign an overhead cost for your work. This represents the barest minimum you can accept without taking a loss.

4)  Add creative value to your work. The overhead cost would be about the same whether a 3-year old did it, or a seasoned 30-year artist. What makes your art valuable are the choices you make: subject, lighting, palette, medium, size, level of detail, etc. Creative value is a very subjective measure, and one you should talk over with other people familiar with your work. In the end, you want to arrive at a solid scale to measure by. Keep track of how much you value each work creatively and why. Look again at the whole grouping and how you placed the value, and then make adjustments. And it’s worth noting that the better your marketing campaign, the higher the value you can place on the creativity of your work. 

5)  Assess the technique. A simple, brilliantly executed painting will fetch more than a complex, poorly executed one. Again, this is subjective, but you really know when you have outdone yourself, and when you’ve just done your usual great job (anything less you should not even consider selling, as this will damage your brand). 

6)  Stratify your pricing structure. Set a basic A, B, C structure of categories for your work that reflects all of the features above.

Your “A” list is your top portfolio, which gets you more work, more showings, and more buyers. These prices should never be compromised or reduced; in fact, these are generally works that are sold for higher prices through galleries and at auctions.  Instead, pull a work that isn’t selling and look at ways of marketing up to achieve the price you have set.

Your “B” list is where the majority of your income as an artist rests. These are the proven techniques and pieces that buyers have loved in the past. Be careful to preserve the prices you set here, as once you drop them, you make previous buyers feel like they should have waited. If a buyer wants to pay less for an art work, then it is best to redirect them to a similar piece that has a slightly lower value. This way they will feel that they got a bargain, but they also got a valuable work of art.

Your “C” list represents untested or experimental work, or older pieces that have value but may not represent the full extent of your current technique. These can be discounted, as long as the discount is explained through careful marketing. 

7)  Consider your marketing vehicles.  You have to build into the price the cost of marketing, even if you’re doing it yourself. Most artists mistakenly assume that if they sell a work themselves, they are saving the 40-50% commission they often pay to a gallery, but over time, you are spending this money (and maybe more) in self-advertising, maintaining a website, doing demonstrations, and manning booths at festivals and open-air shows. And most importantly, you are taking time away from creating your artwork. On the other hand, a lesser investment of time or money will generally yield fewer sales.

Whether you pay a commission to a gallery, a fee to a marketing site or a collective, or do your marketing entirely on your own, you have to designate a retail price (what the customer pays) that represents ALL of the above costs. Ideally, this price is one that can cross-over all the categories, so you can show your top pieces at a gallery, sell your B-list on your own website, and even make some cash selling your C-list at fairs and festivals.

A Basic Formula  For Selling Art for Profit: 

Overhead Costs + Creative Value + Technique  = Base Price

Double this to get your Retail Price. 

Anything less, and you will drive yourself out of business.

The Other Side of Pricing: Know Your Marketplace

One of the most important factors in setting good prices is an understanding of what the market will bear.

For dead-on  insights into what drives the erratic instincts of buyers, I  recommend a very interesting article published last week online at Inc. Magazine, by blogger Charlie Gilkey, who writes the Productive Flourishing newsletter (with invaluable advice for creative entrepreneurs). 

The article,  called “The ABCs of Pricing,” offers  simple advice that is particularly important for the retailing of art (including photography, sculpture, pottery, and fine arts, and includes a  tight summary of three principles of price setting in a fluctuating market place: anchors, bumps and charms.

These principles, along with those I have already outlined, will guide you in designing pricing strategies that work for your career over the long run.

   © 2011 Arts Enclave. All Rights Reserved.

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