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Posted on February 13, 2013 in Build Your Brand by Katie Oskin
If you are an artist trying to make a side or full income by selling your craft, there is another art you will first have to master and that is the art of pricing. If you analyze the trend any skilled trade you will undoubtedly notice a pattern. The more experienced the trades-person becomes in their craft, and the more skilled their work, they more they get paid.
Are YOU the artist any different? Surely you have invested your heart and soul, along with hours crafting and learning in order to be where you are today.
When I first started selling my sculptures online I came across an artist pricing formula that told me to double the cost of material. I donít know about you, but if it takes me approximately 1 hour to sculpt a quarter-inch microscopic sock monkey (my specialty) and I simply double the cost of polymer clay material, I’d make approximately $0.25 for an hourís worth of labor. That’s not a typo; we’re talking a single quarter
There is so much more to pricing handmade artwork than simply doubling the cost of material. Every artist is different, and so every pricing formula should be different. My goal is to give you a simple foundation so that you can derive YOUR ideal pricing formula which creates a balance between earning and income and providing value to your buyers.
There are 3 major components to be accounted for in the price of your artwork
You are an artist, but you also work for a living. This means you have to pay yourself an hourly rate. You do not have to start out with a big number, so long as you pay yourself more than minimum wage. Sounds silly, right? Then why are so many artists selling their work for less than the wage of prisoners working in jail. (I actually looked this up, under $100/month)
If your labor involves large chunks of time, mark the start and end time including any cleanup and preparation. If you work in bulk on smaller pieces, price your hour and then divide by what you create.
Using a hypothetical rate of $15/hour, if your painting takes a total of 6 working hours, that ís 6 x 15 for $90. If you create approximately 3 whimsical critters per hour, that ís 15/3 for $5 each
These are just your starting numbers, we then add the following 2 onto your formula
Any supply or material that is used up in your art process should be added into your material cost. The obvious ones include canvas and paint for a painter and clay for a sculptor.
The less obvious materials include those little things that don’t seem to get used up. This includes the individual staples or dabs of hot glue that go into finishing your project. An ideal calculation includes comparing the cost of material to the number of projects it can be applied. If a bottle of glue for $2.99 lasts for 30 projects, that’s approximately $0.10 added onto the total cost
A simpler, yet less perfect method is to estimate the cost. For example, my micro-merbaby pictured here took approximately 1 ounce of clay which is easily measured. However I simply estimated a quarter for the additional cost of paint, glitter, feathers and sealant on his tiny body
I consider overhead to include the cost of anything related to the art process that cannot be measured directly based on material consumption. This includes but is certainly not limited to:
Using my merbaby sculpture as an example again, I used an overhead lamp and sculpting tools. He was baked in a convection oven, and finished using painting supplies. I have also invested in a number of sculpting book. While these are not used up they are still art-related costs.
I recommend using a formula like this one for full-time artists, and an adapted version for part-time.
Yearly cost of overhead divided by 12 months for a monthly overhead cost. Then divide the monthly overhead by an approximation of how many pieces you can product each month.
For example, if overhead costs me $600/year that comes to $50/month. If I can sculpt 10 fairies each month as a full-time artist, thatís $5 overhead added onto the price of each fairy sculpture
The above numbers are the minimum criteria you want to consider when determining your WHOLESALE pricing. Meaning the absolute lowest you want to sell to break even for your time and material.
Converting from wholesale to retail pricing can be done in a number of ways. Perhaps you sell directly and prefer to keep your items priced low, or perhaps you sell through consignment or other retailer, again these are the lowest prices you should accept in exchange for your work.
Some recommend multiplying wholesale by 2 or 3 for a retail value, while others feel these numbers are too high. A quick personal story on pricing for the weary. When I first started on Etsy I wasn’t getting sales, and so I lowered my sock monkey sculpture ($30 value) to $0.99 and it sold. After doing the math I realize that I paid to buyer to adopt my sculpture and not the other way around. And so I gingerly raised my numbers to wholesale. Well guess what, they sold! Prior to the holiday shopping season I boldly raised my prices to retail thinking there was no way, and you know what, I don’t think my sales volume dropped at all.
When a buyer recognizes a piece of handmade art for what it is, they should be willing to pay what it ís worth. In doing so I was able to work less, (sell less) and make the same profit. This extra free time can then be devoted to generating qualified traffic and building backlinks to my shop, a topic Katie covers quite nicely in her Build Your Brand series.
Read Etsy’s advice on pricing your handmade item(s) here.
A note from Leah: I ran into Katie from KatersAcres soon after opening my Etsy shop. Katie has been a role model and inspiration in both her mannerism, willingness to help out a fellow PC sculptor, and with the great information found on her blog. I am honored to have an opportunity to share some of what Iíve learned with the fans and followers of this blog.