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Pricing Strategies

We're gonna talk about pricing, and I really hope that you find this valuable because I really find pricing to be a very difficult thing to find information about. You know, short of going in to galleries and writing down different artist pricing, which I don't necessarily recommend doing. It can be really difficult to find artists who speak openly about how they have priced their work. And I just hope that part of my journey is helpful to you in figuring that out. So, some things you have to consider with your pricing is how much time did you spend on each individual image? And this might lead you to want to price your images differently, you know, from one to the next to the next, and I would very much discourage you from doing that, because that is a lot of information to keep track of. So instead, I would take averages of these things for your general body of work that you're pricing. But, how much time did you spend making it? What materials did you use? So, what was the cost of t...

hose materials? Were they high end materials or not? You know, just things like that. What was the total creation cost for you? You might factor in time spent; so, paying yourself, for example. Printing cost. You know, what does it cost you to literally make that print? Something really good to consider. Shipping cost. I'll be talking a lot more about galleries, and artists, and who does what, in terms of contract terms and conditions and things. But, in terms of shipping costs, that's usually the artist's responsibility, unless the work is already with the gallery, then that'll be their responsibility. But, in general, shipping cost comes from me. So, something to factor into your final cost. Framing cost, which I actually would like to advise caution on this one, with framing, because I would say probably 80% of the time, maybe more, I do not sell framed prints. So I wouldn't wanna factor in the cost of framing if I usually don't actually frame my prints for my clients. We'll talk a lot more about that a little bit later. And then originality, and rarity. So we have already talked about a little bit of what makes something rare, in terms of limited editions, how limited your editions are, how many sizes you offer, how many images you will present to people that are for sale. Originality, I think, is a really interesting one to consider, and it's one that we definitely can not put a price tag on because that's kind of up to you. Let's say that I have an image that I think is just the most beautiful thing I've ever created. I feel like it's my masterpiece image. I might want to price that image higher than others, and that's okay. And that's what I've done with my new series, is I've priced that higher than my other prints because they are more rare, and more original than the other ones; given that it's a small body of work that has a certain look to it. So there are things that we're considering, and it's a lot to consider. So, now we're going to get into the nitty gritty of pricing. And we're going to... I'm telling you, in the next 20 minutes, you're gonna know your pricing. Well, maybe not. But we're gonna get so close. And hopefully this will be helpful. So, I've One-Time Costs, and what I'm referring to, when I talk about these one-time costs is this Fourth Wall series that's I've created, okay? So this is just in relation to this particular image right now, that you see here. One-time costs. I built a room for this picture, and I decided since I ended up with nine images, I took the cost of building that room, which was $900, and divided that and got $100 per picture. So, if I consider the cost of the room, for that one image, I decided $100 is good. Does that make sense? Am I already being confusing? Oh no. This is so hard to talk about. Okay, so we've got the room cost, and then we've got the bath tub cost, which was $375, although we just found a totally free one on the farm, and now I have regrets, but it was $375 for the bath tub. And then we've got the wax that was $50 to purchase. And that was wax that was safe to go on her skin. At least that's what I'm gonna tell people. No, it was. A crock pot, which was like, a small thing that I had to buy, but nonetheless, we had to heat the wax. I didn't have a crock pot. $25. The model, $200; as an expense. My assistant, $200 for this experience. Movers for that bathtub because I couldn't move that thing to save my life. Especially to the second floor of my studio. So, movers were $200. Total time spent for this one image was 15 hours. And then we have our total. So the total cost that I spent that day, or that week that I was working on this image was $1,150. So that's my one time cost spreadsheet of what I had to pay to make this image happen. Okay, so then we have a little bit of a different idea here. Instead of just factoring in every single one time cost, well, what about the editions that you're creating, right? So, I could sell five of that image. So it makes sense to take your cost and divide that by your edition number. So in my case, that's $1,150 divided by five, and I get $230. Okay, so for every single print of this that I sell, $230 is my expense per print. Got it. Okay. This will all make sense in a moment, I hope. Okay, so my printing cost then is $ for a large print, okay? My 42 inch size print will cost me $200 to get that print on a piece of paper. Shipping cost, $400 to make sure to make a little crate for it, to make sure that it's all secure, getting it to where it needs to go. Framing cost was $800 for that large print, and then the rarity factor, which is our $230, because that was our cost for the image divided by our edition, $230. So my total cost for this image, all together, was $1,630. Okay, this will all make sense. (laughs) So my costs incurred, if we do this per edition, is $1,630. The gallery takes 50% of the sale price. So we're factoring that in. The gallery price that we're selling for is $ for one of the large scale prints. My split, if we sell it, is $4,500, minus my costs is $2,870. So now if you think about this, that's going to get me my money back. Almost in totality. But what if you decide, well I don't know if I'm going to sell all five of those images. I mean, what if I only sell one? I still really wanna make my money back. And then let the rest of it be profit, which, I think, is probably a good business decision. So you might go about this where you don't take your costs incurred, divided by your edition, so that you make back your money in one print sale, when it comes to pricing your work. It's just an option, and we'll see what you feel most comfortable with. Okay, so just going over this one more time. We've got my costs incurred, right? And I didn't assign any sort of number for my time spent here. So you might do that, you might factor that in. You might decide, I am worth at least what a lawyer is worth. I'm gonna pay myself $200 for my time spent per hour. Maybe you do that. Maybe you don't wanna assign any sort of specific price per hour, so you just sort of think to yourself, maybe in terms of pockets of time. Maybe if this takes me one to five hours, I'll add in this much more money, or you know, five to 10 hours, or however you might wanna do it. So if we get rid of the rarity factor here, then that means that my total cost is $2, for one image, for one print here. So then if we go through this again, if I keep the same gallery price, and I divided the 50% here, my split stays the same, but my cut of that goes down, if you're factoring in without the divided edition. If that makes sense. So if I just go back here. Okay, I'm simply taking out that 230, and I'm adding in the 1,150. And my point in showing this to you is that I did not change the price of the print. This is the price of the print. So, I'm not saying, you know, well given this, I should take my price up. What I'm saying for you is, you have that option of how you wanna price your work. Do you want to have all of your one time incurred costs covered in the first sale of that image, or would you rather get your money back over that sale of all your editions? That's really the difference here that we're talking about. But I hope that this break down gives some indication of what you might wanna factor in when you're creating your pricing structure. So now let's talk about if you have no costs incurred. Like me most of the time, right? Like, I use bed sheets, cost $10; it's not a huge thing. So if you have no costs incurred, then this is my recommendation, which my printer actually gave me right when I started. He said, okay, how much time do you spend on your images? How much time do you do this? How much money do you spend? And basically after me giving rambling answers for a long time, and not really having a good sense of how I work yet, he just said, well listen, if you take your printing costs; just the cost to print an image, and multiply that by 10, that's a really good starting point for what you might wanna sell your images at. And that was like a really easy thing. I'm like, oh, I can multiply by 10. That's something I have the ability to do. So, if I print that image at that size, the 42 inch size, that'll cost me $200. If I multiply that by 10, I get $2,000. The only issue with this is that this is not factoring in any of the rarity, originality factors, right? So, if I'm assuming that this didn't cost my anything, if I didn't have that 2,000 plus price tag of what this image cost me to make, then yeah, this makes a lot more sense. But, I still have to factor in, what is my edition size, how rare is this series, and how much time did I put into this? So this price will go up based on those factors. And I like this starting point for somebody who doesn't have a lot of cost incurred, because it's just so simple. And you might decide that you need to go down on that number, or you might wanna go up on that number. That's totally up to you. So, okay. So let's break this down again with this new method of pricing. So, if my costs incurred are now $200, just for printing. I'm not framing, I'm not shipping. Just $200. The gallery takes 50%. Now, if I sell at my normal price; this is my normal price for a 40 inch print, okay? So, not this image that we see here. Not for my Fourth Wall series. My general body of work. Remember how I showed you the two different sizes and editions for my general body versus my Fourth Wall series? So this is my gallery price for a normal 40 inch print. My split, if sold, is going to be $1,700. My cut minus costs is $1,500 for my normal process of creating a 40 inch print, where I don't spend all that crazy money to make the image. So, it works out pretty well with this pricing structure, I feel. And what I did to get this gallery price of $3, was I took that $2,000 price that we, let's see... Oh, where was it? There, there. (laughs) $2,000, and I went to my gallery with that price, and we were very first starting out pricing my work, and I said, what do you think about somewhere in the range of three to $4,000, and she said, yeah, $3, sounds good. And the reason why I said three to 4,000 instead of just saying 4,000, which I'm just doubling 2,000, because of the 50% split, is because I didn't have a career yet, really. I hadn't really sold a lot of works. And I think that's a very valuable thing to add in here, is, how many pieces have I sold? How many collectors are following my work? How many exhibitions can I put on my resume? And if the number is very low for all those things, then you might start out priced slightly more reasonably than somebody who's been working at this for 15 years. So you're always having to consider, where am I in my career, and how does that factor into my prices? It's very easy to take prices up. It is not so easy to take your prices back down. You know, if I sell a print, you know, as we see here, at $3,400, and in two years, I'm like, I think that's too high, I'm gonna take that down. Well how do you think that person who bought that print for $3,400 is gonna feel? You can't do that. It's not like a department store where you can just put things on sale all of a sudden, and then no one's mad about it. You know, people are gonna be pretty mad. So, all right. So this is just another example for my 20 inch print, which is my most common size. That'll cost me $40 to print, times 10 is $ if I've done that correctly. And so that's my starting point for what I might begin to sell that image for. If I double 400, that's 800, and that's exactly the price range that I was in, when I started selling my works. So when I first started out, when I was just putting my images out there for the first time, my works ranged from, anywhere from about $ up to $1,000. And that was my, sort of, price range. And I felt that it was reasonable at the time. So, just to give an example of what maybe collectors will be looking for, or art buyers, or whoever you're trying to sell to. If you're just starting out, a range under $1, can be a really good idea. And I am by no means telling you to not charge whatever you wanna charge. At all. But, when you go into galleries that aren't necessarily representing artists where they are making their money by the artist paying a fee to be in that space or something like that, you're generally not going to see a lot of works that are priced about $1,000. Just in general. So this is just more market research on my part, of walking into those galleries and seeing how people are priced. And actually seeing what's selling. So you have two options. You can price your work to sell, and one reason why I would caution against that is that when I walk into those galleries that are very, sort of eclectic with what they carry, where they turn their shows over really frequently, where you maybe have to pay a fee to get into the gallery, the prints that are selling in those spaces in general, in my experience, have been between $50 and $100. And they're very like, mass produced works that people coming in have the money in their pocket, they can just pay right then, and walk out with their print. Whereas art buyers know that they're not gonna walk away with their print. It's gonna be an investment. That print will probably hang on the wall for a while, then it'll be nicely packaged and installed in their home. And it's just a totally different way of selling art, in my opinion. So, thinking in terms of your starting range, there's either that method where you price it to sell immediately on those walls, of those galleries, who are not necessarily representing you. Or you'd price your work, knowing that you're goal is to get into a better gallery later. And so maybe you know you're not gonna sell that much at your price point in these smaller shows that you have. But at least you're getting into those smaller shows, you're building your resume, and then when you take those works to the gallery, you'll be able to say these are my prices. Again, prices can go up, and they cannot go down. So, I wouldn't say you're in trouble if you start low, or anything like that. I would simply say, don't sell yourself short. But also be realistic about where you are in your career thus far. And my prices are always changing. You know, they change about every couple of years, and I'll notify all of my galleries that my prices have gone up slightly. And the way that I choose that is usually with my flagship galleries. So the gallery that I've been with longest that I have the closest relationship to, we'll usually have a conversation every couple of years, and I'll say, you know, is it time, or she'll say, is it time, and we'll have a conversation and just raise the prices slightly. Yeah. When you raise your prices, do you raise them for your whole portfolio at that point, or do you, Yeah. the older works are still at the lower price, and the newer works... I mean, this set aside. But... Right, yeah. That's exactly. I raise it for everything. So, if I've got this image, which is from I think, 2011, or something like that. It's much older image of mine. If I've got new body of work that, sort of, fits into my general portfolio, the price of this print will also go up. And that's not necessarily standard. You can do it any way you want. So if you say to yourself, you know what, 2016 and before, that sort of, that work is now old to me, whatever comes after that I'm gonna raise the prices on. You can totally do that. So, it just depends on how you wanna do it. I'm not a super organized person, so it's just so much easier for me to just tell all the galleries, hey guys all the prices are raising right now. You know? And that's pretty standard too. It's much more an expression of, okay, I was at one point at this place in my career, now I feel like I've moved on to a different place, and therefore this work is worth more now, because my name is associated with it. Not saying my name, I'm not... You know what I mean, right? This great artist's name is associated with it.