How do you PRICING your work?

[Harriete Estel Berman]

Dear Crafthaus people,
As a member of the Professional Development Seminar committee I¹m writing to ask if the community can help with a project.

As you may know, the PDS is a three hour program that was developed to offer solid, nuts and bolts information on establishing, maintaining and building a career as an artist and maker. The PDS takes place once a year in conjunction with the (annual) Society of North American Goldsmiths conference. The next conference is in Houston, TX March 10-13, 2010 and will mark the first year that the PDS will be an official part of the conference.

Part of this next year¹s PDS programming-- and continued lunch discussion -- will focus on PRICING, looking into the different strategies that makers have evolved to establish a price for their work. We want to know what goes into this often difficult process: if people use specific formulas, if they find market comparisons, if there are differences in establishing wholesale and retail prices, etc.

If you sell your work in a gallery, online, from your studio, in your own retail venue or via Craigslist; if you work on a consignment basis, as a production artist as a one of a kind maker, via commission or purely on a custom basis we would love to hear from you.

Our goal is to present a variety of pricing strategies, from specific formulas to more creative approaches, and help PDS participants to develop a REALISTIC method of pricing or to perhaps fine tune their current method.

Thanks for any help that you can lend.


Harriete Estel Berman

On behalf of the PDS committee:

Harriete Estel Berman, Don Friedlich & Andy Cooperman.

[2Roses]

Pricing is the without question the single most difficult and complex task in the marketing process. While many mechanical formulas exist to determine pricing, none are conclusive. At best, formulas simply establish a foundation price on which to layer other more ethereal price influencing factors. While this is true of all businesses, pricing in the arts is dependent on far more emotional factors than rational factors. This is why a basic materials plus time usually is not a reliable approach to arts pricing. The materials and time to create an artistic work are often marginal or irrelevant to its value.

Price influencing factors can include materials, but more often the reputation of the artist is a much bigger factor. Consider that a piece of crap with Miley Cirus’ name on it will probably outsell anything you make 1000 to 1.

Pricing for the arts is really a discussion of how people (the Public) determine value (ie what they are willing to pay). For commodity products people form their value opinions from comparable products, supply and demand. A commercial jewelry store in a shopping mall operates on this type of price/value model. For non-commodity products, such as one-of-a-kind art, emotion based factors such as class, status and power play a far more important role in establishing value and what the customer is willing to pay.

Thus the volume of sales for jewelry perceived has having a high commodity factor will be heavily dependent on price. Price is often the key value indicator of the commodity product, because the buyer is often unable to access value via any other factor. This is why discounting and sales are effective at this end of the market. On the opposite end of the market, when buying one-of-a-kind art, price is typically fifth or sixth down on a list of purchase influence factors. The buyer often places greater value on a number of tangible and often intangible properties related to the item. If the artist has assessed these factors carefully, understood how they influence the purchase decision, and priced accordingly, price objection is virtually a non-issue.

The above is admittedly an over-simplistic snapshot of what every jeweler from Tiffany's to 2Roses grapples with on a daily basis.

[Paul Bierker]

Here is a price sheet that I use

broken down into grams and DWT for mostly modeled and Cast items with or without stones-

With creativity margin on your wax or primary design should go higher- ALWAYS double material costs (some gems do not apply)

And don't ever forget to value your labor- Even if you are just learning-

The attached excel sheet should Help- I hope- Some of my minimum rates are included.

Download here.

http://www.box.net/shared/htg2f0rokg

[Creative Glassworks, Inc.]

I set my prices for at least double my materials, marketing, shipping, and other incidentals. Depending on where I plan to sell my work, I make adjustments based on comprable products in that market. This means the cost for my time making a product varies. Sometimes then I make more than half the cost of materials, sometimes less. But I won't take a loss by cutting into the expense of costs.

[Alison B. Antelman]

While materials and labor go into pricing, artists should be including overhead (ie: rent, insurance, etc...), consumables (ie: buffing wheels, drill bits, etc...), however, there is an ambiguity that also goes into pricing art jewelry which may include experience, reputation and design sense-and the turmoil it took to make the piece. It is true, in my opinion, people who understand art jewelry put price lower on the rung of importance when making a decision to purchase. On the other hand, a well know artist who is often seen in print and other media can fetch a higher price even if they don't make their own work, but have "branded" themselves as an artist-or once was but has now become an import manufacturer (ie: the robin blue box of tiffany's or David Yurman).

In the most minimal circumstance, a sale ought to be priced in a way that helps contribute to the artist sustaining their lifestyle (modest at it may be) and maintaining themselves as a working artist.

I know of many artists who are desperate for cash so they heavily discount their work. This is not only devalues their work and is unprofessional, but it ruins it for the rest of us. I'd like to destroy the image of "starving artist" or "sucker open to discounts" and replace it with a more positive and professional image, where it would be unseemly to ask for a discount.

In the end, when you sell a one-of-a-kind work, ask yourself if you feel happy to receive those funds or sad to give up the piece. That is one tell-tale answer.
alison

[Heather Grandmont]

I like your last paragraph Alison. I do the same thing with pricing, everyone should feel good with the turn out - Heather

[Lorena Angulo]

Princing to me has been a very difficult task to make. At the beginning I was confuse and I priced my work very low.
When I saw the peoples reactions to my work I knew they put more value to what I made than I did.
Since that moment I knew I need it to give my jewelry more respect. When someone really falls in love with your work the least thing they will worry about it is the price.
When I price my work I take into consideration a lot of factors: material cost, labor, overhead expenses, etc.
All this factors will give me my wholesale price.
I am still learning in how to price my work but I am very sure I will never under price my jewelry just because I want to sell something.

[Wendy Edsall-Kerwin]

I use the pricing formula that I learned at Tyler. I figure out an hourly wage for myself and add overhead costs to it. (I basically figure this out by adding up all my overhead costs for the year and then divide it by the number of hours that I worked.) I then keep track of the time I spend on each piece and multiply it by the hourly price. I add this to the materials cost. I then multiply it by 12%. This is my wholesale price. I then double it for retail. There are some pieces that I keep the same price regardless of how long it took me for continuity reasons (my cuffs are one example). That makes it easier for everyone. For the record, most of my pieces are one of a kind or limited production, so each piece needs priced individually.

[Thomas Skaggs]

I make studio furniture. Furniture is a real challenge because so many folks compare the prices to non-handmade furniture they see elsewhere. The folks who actually buy my work however are not interested in buying furniture at the "big box stores". Aside from the materials and time factors there is a "wow factor" with furniture. A piece with "wow factor" can command a higher price. How much? Well I often leave that to the owners of the galleries that represent my work. They have a great eye for "wow factor" and they know the clientelle. I will give them a basic price and they will suggest a higher price based upon "wow factor". It generally works very well. It's in both of our interest for the price to be smart. I feel it also makes for good relations with Gallery Owners when they have input.