This year, one of my goals is to open up about the business side of making and selling art. In my previous post, I revealed the true cost of art when it comes to selling at art festivals. In this post, I answer questions about retail price and the value of art.
I am not a pricing expert; I'm an artist who struggles with pricing. I feel that I'm constantly reevaluating and adjusting my prices. Price and value are difficult and this post addresses what I've learned so far. I always have more to learn.
Q & A on the Price of Art
How is retail price calculated?
A traditional formula for calculating retail price is:
Costs of labor + cost of materials + business costs/overhead = Wholesale Price
2 x Wholesale = Retail Price
What makes pricing art different?
A traditional formula like the one above is derived from manufacturing industries where there are high volumes of "widgets" being produced. In contrast, the very nature of art is that it is one-of-a-kind.
Pricing art using a traditional formula doesn’t work well because the value of art is subjective. Basically, the list price is what an artist hopes someone will pay. But, the truth of the matter is that some art never finds a buyer. An artworks’ value is only determined once an artwork has found a buyer. When an artist and buyer agree upon a sale price, that is when its value is determined.
How do you calculate the retail price of your art?
Despite the difficulties of retail price versus value, we still have to start somewhere! Here is a simplified version of the pricing structure that I use to determine the retail price of my art:
Why is the Retail Price so high?
In an art gallery setting, when/if an artwork is sold, the gallery takes half of the sale. In essence, the artist is paid their “wholesale price” for the art.
An art gallery takes half of the sale?!
It may sound like a lot, but an art gallery has its own costs and overheads (rent, employees, etc.) to pay and it needs to make money in order to stay in business. Just like an artist, the only way a gallery makes money is by selling art!
An artist may choose to sell their art without a gallery, but these settings come with a cost as well (for example, see the costs associated with selling at art festivals in my previous post). Selling art at retail price regardless of setting allows these costs to be recouped.
I am an artist and designer based in Minneapolis, Minnesota. My specialties are textiles and pastels.