• Tag Archives the price of art
  • Pricing Art

    Pricing Art, No Easy Task

    How other things are priced.

    When it comes to pricing art, it is different than pricing other products.  When most people decide what to charge for a product or service, the process breaks down to a simple formula that makes sense and is hard to argue with:

    (Time)(rate of labor) + cost of materials + other costs = price

    How this would look if you were building a deck on someone’s house is this (I’ll say the owner of this company is also its only employee to keep it simple, otherwise we need to add another category, which is desired profit):

    Job takes 15 hours, you decide that you need to earn $30 per hour because that’s the going rate for this kind of work in your area, the materials cost $250, other costs such as gas to run machinery, wear and tear on tools and such is figured at $50 for this job.  In reality the other costs would probably much higher because you’d need insurance and things like that, but this is just for illustration.  So here is the formula.

    (15 hours x $30) + $250 + $50 = $750

    Now if this person was a business owner with employees it would look a little different, because we would say (Time)(rate of labor) + cost of materials + other costs + desired profit = price.

     

    Art is different.

    In a perfect world, art would be priced the same way as building a deck.  The artist would decide on the hour wage they required to support themselves, lets just say $20 per hour for this example, they would multiply that wage by the hours spent making a piece, add the cost of the materials, add in other expenses such as commissions paid to galleries, and maybe a percentage of the studio rent they pay, and that would arrive at the price to charge.  That formula is fair, it makes sense, it is logical.

    And it DOESN’T WORK, at least not perfectly

    Here is why:

    Lets say we are going to price painting on a 36 inch by 36 inch gallery wrapped cotton canvas.  The artist buys this pack of 5 canvases, which means that before tax and shipping the canvas costs them $20.15 each, for sake of this example we’ll say the artist lives next door to the art supply store and doesn’t spend anything on gas, and they have a resell certificate so they can purchase the materials without paying sales tax (this is tricky for artists to get, but more on that later).  So the materials so far run $20.15.  Now for paint, the only way for the artist to know how much paint he uses up in one painting would be to weigh the tubes before and after the painting, and not to use those tubes for anything else in the meantime.  Now, professional quality acrylic artist paint varies in price depending on the brand and color, but an average price is about $3.45 per oz, if the artist buys the larger jars to save money.  If the artist buys the typical 2 oz tubes, then it comes to around $5 per oz.

    So lets say that to cover this 3 foot by 3 foot canvas, the artist used 4 oz of paint (sometimes paintings have texture from thick paint, sometimes the paint is applied thinly, with no texture, so the amount of paint used varies accordingly).  So 4 oz of paint, multiplied by $3.45 per oz, and that is $13.80.  Now the artist also seals the painting with what is known as an isolation coat, and then a layer of varnish.  Lets just estimate the cost of both of those together to be $5, then add $2.00 for the hardware to wire the back of the painting for hanging.  So now for our materials cost we come to $40.95, lets round that to $41 for the sake of simplicity.

    Next we have our labor cost.  We had said this artist decided they needed to make $20 per hour, but they are only considering the hours they actually work on this painting, not the time they may spend manning a booth at a show or putting in unpaid time at a co-op gallery to try sell it.  So lets say they aren’t considering that because they won’t do those things, they show their work in a traditional gallery that will collect a commission at the time of sale.  Galleries typically charge 40-60% of the sale price as commission. So for our purposes we’ll say the gallery will take 40%, and the artist will keep 60% of the sale price.

    The time spent on a painting varies widely depending on the style.  Detailed portrait work of this size could easily 40 hours, a splatter-style abstract on the other hand might only take 2 hours, including the time to seal and varnish and wire it for hanging.  Lets say this piece though is an impressionistic landscape, and will take about 9 hours to complete the painting, plus another hour for the finishing work of sealing, varnishing, and wiring, so 10 hours of labor all together.

    ($20 per hour) x (10 hours) + $41 material cost = $241

    So $241 is what the artist needs to make on this painting after commission.  But remember, the artist only gets to keep 60% of the sale price, in order to figure out what the artist needs to charge we need to do another calculation.  If we divide the artists cost, by their percentage, we’ll find out what the actual price needs to be.  First though we convert that percent to a decimal, so instead 60% we will have 0.60.  So here is our formula $241÷0.60=$401.67.

    The problem is that only a few people are actually willing to pay $400 for a painting, no matter how skillfully it is painted.  So while the artist may start of this price, a year or two later they start cutting the price, $350, $300, $275, $250 Finally lets say it sells at $225, the artist keeps 60% which is $135, the materials cost the artist $41, so the artist actually made $94 for 10 hours of work, or $9.40 an hour.  That is actually good in the artists eyes though, because often they end up making much less.

    Most artist don’t use that formula at all

    Most artist don’t even go through all those steps though, most will charge by square inch, or will ask the gallery owner what he or she thinks the piece can sell for, and then the artist just takes their cut of that without regard to the hours they put in, often this results in the artist getting $75 for a piece that cost them $41 to make, so the artist actually made $3.40 an hour.

    My recommendation to artists.

    My recommendation to artists, and what I will start with future pieces, is to at least use, as a starting point, the formula:

    (Time)(rate of labor) + cost of materials = your price before commissions

    They may have to cut the price down some to make it sell, but at least they will be aware of how much they’d like to receive, and how much they absolutely MUST receive in order to not lose money, at least if you use that formula as your starting point, you will know when you start cutting down the price how much less per hour you are making, and you will know what you can’t drop below if you are going to make anything at all.

     

    My recommendation to art collectors.

    Consider buying directly from artists on their websites, at art fairs, or in their studios.  If the artist doesn’t have to pay 40-60% of the price to the gallery, they are probably going to be a lot more flexible with you, the customer.

    That being said, if you see the work in the gallery, don’t try to contact the artist privately and arrange for a private sale.  This is unfair to the gallery owner who is paying rent to keep a gallery open so you can see the art in the first place.  It is also putting the artist in a position where they are being asked to violate their deal with the gallery, because 98% of the time, they have signed a contract that disallows them from pulling a piece and selling it to you if you saw it in the gallery.

    You could though, contact the artist and see if they have other pieces that are not being shown in the gallery, often this is allowed.