Pricing

So, yes, pricing. I knew I’d have to think about this sooner or later if I hoped to sell work. Not everyone wants to sell work, of course, and I’ve never tried until now. But the Prism exhibition provides exhibitors with the opportunity to sell pieces of work in the exhibition, plus items in the exhibition shop. So I’ve had to turn my attention to the important question of ‘how much?’ It’s actually not the first time I’ve considered pricing. I’m the author of an accountancy textbook for use in universities, and I decided when planning the content of the book, some fifteen years ago, that I would include a chapter on pricing. The chapter kicks off with an economist’s  supply/demand graph – which is helpful to illustrate the selling of, say, toothpaste in a competitive market, but doesn’t have any use for the sale of one-off items such as artwork. I then go on to consider the question of how producers decide on prices and then I have a quick waltz around (this is only an introductory textbook and pricing is far from being my speciality) two approaches that I think have some relevance for what I’m talking about here: market-based pricing and cost-based pricing.

Very broadly speaking:

  • Cost-based pricing fixes the price of a product by reference to the cost of supplying it.
  • Market-based pricing fixes the price of a product by reference to what the market will bear.

I’ve seen a couple of good attempts recently to apply cost-based pricing to one-off items produced as art, but then mediated by the market-based approach. For example, recently, Helen Conway produced a detailed blog post on the subject which is full of useful thoughts and descriptions of how she does it. She sets out four basic principles (good idea, this), for example: ‘Principle no 1: I am not dependent on selling my art but I still want to price it as if I were running a full time working studio’. If you want to read the others, jump over there to Helen’s blog and take a look. She explains it all very well. Helen then applies a formula:

(Cost + hourly wage) x gallery commission = starting point

‘What? An hourly wage?’ you may be thinking. But, yes, that’s a sensible approach, especially in the light of principle no 1 above. This treats what you do like a business; obviously, it’s not the only valid approach. You may be happy never to sell and  to go to the grave as an unsung genius, leaving a house full of valuable artworks that your legatees can flog and get rich on; if so this discussion is not of great relevance to you.

The cost and gallery commission elements of the formula are relatively easy – the commission is what it is, and you should have some idea of the cost of production if you’re going to adopt a business-like footing. If you take the unsung genius approach it really doesn’t matter what you do. Or don’t do. Helen has various good ideas about how to establish an hourly wage that values your time appropriately. Realistically, I know that many artists struggling to get by, feel that they are doing well if they generate the minimum wage from their activities. But, we can dream. Helen does not, as far as I can see, include any allowance for pension costs, but I think you would need this for completeness if you were following this approach. And especially if you were planning a life-time career as an artist. (Just an accountant-like thought).

Taking this rational approach, you add together all the costs of making your piece of art, then you add the total (hours spent x hourly wage), then add on the gallery’s commission, and reach a price. So then you go ahead and charge that, right? Well, no. Not so fast. As Helen says, this is a starting point only. Then, you have to think about the market for your product. Artwork is often unique (well, OK, unless you’re selling prints), and that being the case, you don’t, can’t, price it like toothpaste. A final quotation from Helen’s post before I go off on some thoughts of my own: ‘In the art world, it doesn’t work to say, these are my lifestyle needs/ wishes, I want a salary of $x to achieve that and so these are my prices, if the market does not support that price’. Quite so.

So, now, let’s think about this ‘market’ and what you’re actually aiming to sell. What do you buy when you buy a piece of art (assuming it’s not reproduced as a print or photograph) – let’s say a painting? Well, at a basic level you’re buying the object. Part of the price you pay covers the artist’s costs of canvas, stretchers, paints. But this most likely leaves a part of the price for the artist’s time. And what else? Oh, yes, the privilege of owning something that is unique, and of buying into the artist’s reputation. If you buy a Tracy Emin painting, say, only the most trivial element of the price will be accounted for by the cost of canvas etc. The extra that you pay over and above the relatively insignificant tangible elements, depends upon the artist’s reputation. In the act of buying you are simultaneously paying for her accumulated experience, reputation, the joy of owning something unique, and at the same time, you are helping marginally to boost that reputation by being a willing buyer in the market.

So where does that leave a new starter? Well, as a newbie, you don’t have any reputation. Nothing, nada, zilch. (I should say here that Helen Conway is not a new starter by any means: she was writing her blog post in the light of her forthcoming solo exhibition. She has sold work before, and has exhibited widely, so in her chosen field, she has acquired a reputation. By contrast with me, and possibly you). So what are you going to do? You’ve got a choice of approaches, which may, or may not, be encapsulated in one of the following:

  • Being meek: ‘my work isn’t worth anything much and so I should be thrilled to get twenty quid for it, disregarding the fact that it’s taken me 140 hours to make)’
  • Recovering cost at all costs: ‘that’s what it cost to produce, including an hourly wage rate that fairly reflects the value of my time, so that’s what I’m going to charge’
  • Comparison with the best: ‘my work is easily as good as X’s [established artist], so I’m going to charge the same’
  • The hobbyist: ‘I don’t actually need the money, so all that matters is the fact of selling. I’m not bothered about keeping detailed records or about comparisons with professional artists’

Well, where am I with this? I want to avoid the meek approach, as I’d like to think I value myself and what I do a little bit more highly than that. Recovering cost at all costs? To be honest, this is likely to be very difficult for anyone who produces something like hand embroidery – ‘it takes how long???’. Comparison with the best does have something to recommend it. You never know. Perhaps people will fall over themselves to buy my work and I will establish an overnight stellar reputation. But, then again, possibly not.

For me, I can see the appeal of what I’ve called the ‘hobbyist’ approach. I work hard as an accountant, and earn enough to support myself without being obliged to make any extra income from selling artwork. (The trade off, of course, is that I’m very pushed for time). But, on a broader level, is the ‘hobbyist’ approach fair? One reason why artists generally may not earn enough to keep even a modest lifestyle afloat, especially in a field dominated by hobbyists, is that too many people are taking either the meek or hobbyist approach and selling their work for crazy, tiny, prices and professional artists suffer in the comparison.

So, actually, for various reasons, I’m going to try to avoid all four approaches I set out in the bulleted list. One of my basic principles, then, is that I’m not going to sell for buttons a piece that I’ve spent many hours on. I want to value myself more highly than that. It still doesn’t get me to a figure. Cost of materials is not actually a big deal for my pieces that are going into the Prism exhibition. They measure, unframed, 20cm x 20cm so don’t require a lot of materials. But there are some quite significant other costs, e.g. the hanging fee, the commission (a modest 30% which I think is very reasonable, especially for an exhibition in London where I think commercial galleries would charge much more) and cost of framing. I think I do want the price to at least cover these, plus the cost of my going to spend a day in London to help with stewarding. That’s already accumulated quite a lot of cost. Where do market-based comparisons get me? Well, over the years I’ve bought a lot of art. I know artists, whose work I admire very much, who price their work at only modest amounts (in my view). Occasionally, I’ve been amazed that I don’t have to pay more for what I consider to be a very desirable piece.

And what’s the result of all these musings? I’m a complete unknown, I’ve lavished lots and lots of time on my pieces, I don’t want to be meek or to be a hobbyist. In the end I thought about setting a price of £300 per framed piece. Then, in a fit of appalled modesty (meek, meek), I reduced that to £250. So if I sell all three pieces, I make £750 gross, out of which comes the commission and various unavoidable costs like framing (which was £33 per piece – very reasonable indeed for a very good finish). I haven’t even started on how I priced the shop items – I might write another post on that.

So, what do you think? Any comments, views? If you sell work, how do you fix on a price? Do you recognise yourself as Meek Pricer, or a Hobbyist? Or none of the above?