I have owned a craft gallery now for over 14 years and I haven’t met one artist or crafts person who likes pricing their work. Many have no understanding at all at how to price their items and many artists, especially newer ones, under price their work significantly. I’ve never had anyone say that they thought pricing was easy even if they’d been doing it for a long time. I’ll be taking several of the next few Marketplace Monday posts to talk about various aspects of pricing. I hope that you’ll be able to glean some information to help you in your pricing strategies.
For these articles, I have consulted several books and I’m also drawing on my years of working with hundreds of different artists. I would check out your local library to see what books they have available about selling your “crafts”. The two that have been the most helpful for me are Handmade for Profit by Barbara Brabec and Crafting for Dollars by Sylvia Landman. These are both older books and I’m sure that there are many more out there.
‘Price is the figure something sells for. Value is what that item is worth to a buyer. Quite often the two have nothing to do with one another.’ (Excerpt from Handmade for Profit) There is no perfect formula for pricing and what the marketplace will pay is a very large factor. There are many aspects that will affect what a customer will pay and the value that they see in your work. My point here is that if you continue to work on your pricing and tweak your system as you learn what works and what doesn’t, you’ll become more profitable in your business.
You should always research and study your marketplace before beginning to tackle pricing. Check out how other work similar to yours is priced. I’m sure you’ll find a wide range of prices, but you’ll be able to find an average price for a similar product. Make sure that you are comparing the same markets. What someone will pay in a small rural town will be completely different from a customer in a pricey boutique in a city like New York City. The internet makes the world a small place but not all markets are the same. Keep a notebook of various prices that you see at art fairs, online and in galleries.
Another thing to think about before starting your pricing system is whether or not you are really paying wholesale prices for your supplies. It is impossible to make a business profitable when you buy your supplies at retail price. The more you can cut your expenses and your labor in making a product, the higher your profit margin will be. Streamlining your production is very important and if you are truly a business and are planning on producing multiples of the same type of item, the time required to make an item will determine its profitability.
Next time I will be discussing the cost of labor, raw materials, overhead, selling expenses and profit. I’ll give you a formula for basic pricing and how to use it. So get your research done, cut your expenses down and next time we’ll get into the nitty-gritty of pricing.