Pricing artwork is tricky. The key is to start with analyzing and understanding your costs.
Undercharge and you lose money, overcharge and you scare all the customers away, and if I were to take a guess, I’d say that the majority of artists don’t get excited about the finances and math department. Hey, me included!
Just looking at a profit and loss sheet makes my spine shiver, so telling me I should do some math to see what to charge to make a profit…pfft, are you nuts?!
Pricing artwork isn’t a simple formula or exact science and it comes with a few questions:
- Costs. What are your fixed costs and your variable costs?
- Goals. What are your business goals and how much are you trying to make?
- Competitor research. What are others in your industry charging?
Let’s talk about analyzing your costs.
Imagine you want to sell art prints. You gotta make back what you spent to create the prints, right? So before pricing your artwork, you want to start by analyzing your costs.
Fixed Costs. These are the costs that don't change per print. They're always there and don’t change, no matter how many prints you sell. Think Shopify fees, printer cost, materials to make the original, etc.
Variable Costs. The costs that you incur for every unit that is sold. This would be paper, ink, shipping materials, etc.
Don’t forget about your time! For creating art prints, the materials of each print would be considered a variable cost. It will probably be different per SKU (per art print), and you should also factor in how much time you spent creating the artwork, designing, scanning, printing/production, shipping etc. Come up with a number value on your time (if you got paid $20/hour, your annual salary would be $40,000. You're worth more than that!).
What’s your break even point?
Once you add up those costs, play around with some price points to see what your break even point would be.
Here's an example. Let's say your basic cost to paint an original is roughly $20 for materials, then you add the 10 hours that it took to you to paint/scan/digitize the piece, at a $50/hour salary. Add on the price of the scanner and the yearly Shopify fee and you've got your fixed costs.
Now, let’s say that every print costs you $2 to print at a shop, $2 for paper, and packaging materials for each one is another $2. Add on your admin work fee for each print sold (for the sake of the example let's say $10) and those would be your variable costs.
So how many prints do you want to sell before you make that back? 20 prints?! That’d be $72 per print!
If based on competitor research that seams too high, then you know you'd have to work to lower your costs or raise your break even point.
Let's say after some competitive research, you decided you wanted to charge $25 per print, you would need to sell 120 prints to reach your break even point. Everything beyond that is profit. See how this works now?
For some, this is a huge risk. 120 prints?! That could take years to sell that many. But for others, this could sell out in a weekend, so we need to find that balance.
Now that you have a good grasp on what your costs and goals are, it's time to hop on Etsy and artist's shops to see how others are pricing artwork!
Find artists who are your competitors and gauge the high, middle and low costs per print to get a good pulse on where your prints would fit in.
Keep in mind, high-end shops will have high-end prices. What makes a shop high-end? It could be anything from the demand (maybe they're a really popular artist and their work is in high demand), to packaging and amazing customer experience, to materials the work is printed on.
Always be testing with pricing artwork.
At the end of the day, always be testing.
Pricing isn't a science, it's an art. If something isn't selling…reevaluate! Is it priced too high? Maybe too low?
There is no right or wrong way to pricing, as long as you are making money and covering your costs (and then some)! Increasing the value of your prints through limited runs, or deadlines helps to sell out quicker, therefore, making your money back quicker!
In conclusion, way too many artists undercharge and undervalue their work. It’s hard to know what people will pay before you start listing items for sale, so that’s where testing comes in, but keep in mind, it DOES take doing some calculating to really make sure you cover your costs (and your booty!).
If you want a break-even calculator that has alllll of the formulas and math done for you to analyze your costs (you just have to plug in your numbers for costs and your price), then check out this one here! It was made by my friend and finance guru Andres Martin and will give you the most accurate look at your break even point on any type of product, course and more!