Thanks to Leonard Baca who reminded us about this article at our July 14, 2022 "Clay Connections" Zoom.
From Slip Trail archives. Original: February 2005; re-published January 2013.
By Betsy Williams
How do you price your work? Do you have a consistent pricing system, or do you simply assign prices according to whim? Do you think prices are arbitrary and 'personal'? Are you trying to build a viable career? Do you have a long-term strategy connected with the pricing of all your artwork? These are essential questions to ask before you sell your work. Pricing is a joint venture, involving you, your market, and yes, your fellow artists. Failure or inability to price your work appropriately will create obstacles in your career. If your work is overpriced, you may alienate potential customers and galleries. If your work is underpriced, you may undermine your own reputation and long-term financial growth. According to Caroll Michels’s book, How to Survive and Prosper as an Artist, there are three approaches to pricing your artwork, each of which must be considered and coordinated.
1. Pragmatic Pricing
2. Market Value
The artist should begin with a standard formula to calculate the price of a piece.
• Calculate your annual business expenditures, including materials costs. Divide by 12 to calculate your average monthly overhead
For example, let's say that all of your expenses for materials, utility costs, advertising, and so on, add up to $15,000 per year. $15,000 divided by 12 gives you a monthly overhead of $1250.
• Calculate the number of pieces you complete in one month. (While the specifics may be different for production potters, or those who make a combination of gallery pieces and production pieces, the approach is the same.) Clay artists should calculate the average number of pieces that are successfully fired each month.
For example, let's say you've kept track for an entire production cycle through to a glaze firing, by recording your hourly work, and find that it takes about 30 minutes (.5 hours) lo complete one cup in your production repertoire - throwing, trimming, adding a handle, bisque-firing, decorating, glazing, loading the kiln, etc. This time period should represent all of your labor from start to finish. On average, you could complete 16 cups per day. If you work 22 days per month, that means you can make, give or take, 350 cups per month.
• Determine your hourly wage. What is minimum wage for you? What do other professionals with equivalent levels of education charge per hour'? Do you have many years of education and expertise, or are you just starting out? When you have decided on a wage, calculate your monthly costs in labor. Keep an accurate record of your labor costs not only to help with pricing, but also to give you information necessary to schedule, budget, and price commissions and other projects.
For example: let’s say you’ve set your hourly wage at $15 per hour. At this point, you can multiply .5 hours (the time it takes to make your one cup, as described above) by $15 per hour. Your labor costs alone for the cup total $7.50. Then your $1250 per month over- head must be included. If you can make a total of 350 cups in a month then your monthly overhead per cup = $1250/350 cups = $3.57 per cup. Your total thus far is $7.50 plus $3.57 per cup = $11.07.
• Add a profit margin (recommended is 10%). That brings your total to $11.07 + $1.11 = $12.18 per cup.
• Add 100% commission (to account for the standard gallery cut of 50%). Whether or not you sell all or some of your work through galleries, the price that you charge from your studio and the price for which a gallery sells the same piece must be the same. Always establish the retail price, rather than the wholesale price, to prevent inconsistent prices at different galleries and in different regions. When selling work directly to the customer, a discount of l0% is acceptable. If you discount more to your direct customers you are underselling yourself and doing a disservice to your gallery, as well as to your fellow artists in the same market.
Now the total is $24.36 per cup.
Note: These examples are meant simply to clarify the method of calculation. Your figures may be dramatically different from the ones above.
• Add sales tax, packing, shipping, etc.
After you have calculated the price of a piece or body of work according to the above formula, next compare your figure to the market value of a similar type of work by other artists with similar backgrounds and reputations. This means, simply, visit other galleries, shows, and fairs to see what's out there. Know your world. Michels advises that you “keep in mind that other artists' price ranges should serve only as guidelines, not as gospel."
Is your figure dramatically different from other work in your field? Do you have a valid reason for this difference? Consider whether or not you should adjust your hourly wage to bring your figure closer to the perceived market value.
Constance Smith, in her book Art Marketing 101 advises, "Think of your artwork as having a price range, not just one price. You'll determine an average price range, and then price according to size, subject, media.... and importance of work."
A typical price range on functional items, for example coffee cups, can be clearly determined. Setting the specific price for a specific cup may require some additional thought, but is, even so, not normally a complex issue. One-of-a-kind pieces - because of their individuality and because of considerable time spent creating each piece - may require more market value study than production items, but the approach is similar.
Underselling work that you value will ultimately make you resent your own customers. Selling, at any price, work that you don't value will degrade your own image and your potential to create truly fine work. What about work that you feel is your best, and for which you have designated a price? Now confidence becomes important. Las Vegas-based art theorist and critic, David Hickey, known for his daring ideas and blue-collar approach, describes the pricing of art as a kind of casino-style bet with your potential customer. The artist says, “I’ll bet I can sell this piece for price X." If the customer buys the piece at the price X, the artist wins the bet. Of course, the artist can study all the cards and make an educated, rather than a wild, bet. Essentially this is a foray into discovering what the market will bear, at the root of our capitalist system. Where there is no risk, there is no gain.
Garth Clark, in Shards, reprimands clay artists for underselling their work. How, can ceramics ever gain legitimacy in the art world if ceramic artists continue to undervalue their own work? He advises ceramists to dispose of, once and for all, the Leach model of inexpensive work, pointing out that Leach himself was never the successful businessman able to follow his own advice. In the chapter "The Future of Functional Pottery Part Two: Bernard's Orphans – Searching for Neo in Classical" Clark writes: The Japanese, unlike the British or the Americans" got the concept right. They built a strong following for functional wares and they kept both the quality and the prices high. ... At the end of each year potters would assemble all of their pots and destroy all but the best work. Others ... controlled their market by selecting a minority of their pieces to be boxed and signed, giving them value above the unboxed wares. Either way they developed a system that allowed their potters to live lives as comfortably as successful painters have done, or other visual artists do, rather than the subsistence existence we often find in the West.
Do you have a piece that you don't feel is up to par? Do you just want to get rid of it? Don't affix a low price and give your customers the impression that your work is cheap. Put it in the closet for a few years, out of sight. Or go out into the yard and smash it with a sledgehammer. Or, donate it to charity. Use what you've learned to make your work better. Remember that pricing your work is part of the larger web that connects you with society. Developing a consistent pricing strategy will give you confidence, and you will be able to convey this confidence to your customer. Will you help society understand the value of your work in re- turn for an appreciative clientele's advancement of your career though financial support? Money is a link in the chain that connects us all. Will you be the weakest link?
Art Marketing l0l by Constance Smith ISBN 0-940899-48-5
How to Survive and Prosper as an Artist by Caroll Michels ISBN 0 8050-1953-7
Shards: Garth Clark on Ceramic Art Ed. by John Pagliaro ISBN O9725097-1-2