Solving the Pricing Problem
Solving the Pricing Problem
What is the right price to charge for what you make? As artists, we ask ourselves this (usually when things aren't going so well). We consider what we'd like to be paid for our time, add up the cost of our materials, and - if we're ambitious - factor in our overhead expenses.
This conversation is fun the first time, when it feels like you are creating your future and it seems like the logic of your pricing will almost create your own reality. You are willing to squeeze by on a low six-figure income. No need to rush things or be greedy, that can wait until next year.
Then, about the same time your credit card bill shows up in the mail, you start to notice some cracks in your plan. Your pricing worked in the spreadsheet, so why isn't your bank account cooperating? Maybe you'll give it another year or another credit card… maybe both.
I think any conversation (even an imaginary one with myself about pricing) goes better with a glass of wine, so let's imagine one in front of us. Or, even better, let's imagine two glasses: One is an expensive 15-year-old port, and the other is an inexpensive Beaujolais Nouveau that was still just grapes six weeks ago.
It's easy to consider the differences between the vintners. Hopefully they both love what they do and are very good at it. What drove them to one kind of wine production or the other informs us as to who they are. Some may feel the port is all about pretension or just a stale thing to make, while others feel it reflects history, commitment, and integrity. The Beaujolais might seem watered down or cheap to some, just as to others it seems fresh and exciting to produce and market. While both vintners work with grapes, the personality for the two types of wine is much different, as would be the marketing and pricing. They will react differently when faced with exactly the same problem. It's all grape juice, but with the right maker and the right audience, you end up with something wonderful.
As an artist, raising your prices to have more profit per piece or lowering them to have more volume and steady cash flow can fail just as easily as succeed. And just because someone sells something for a lot of money doesn't mean they keep it as profit, and high volume can mean spinning wheels just as easily as not. It's who you are as a person that will determine sustainable business practices and shape how you can best make a living. Only you know your work ethic and aspirations, whether you should make port or Beaujolais.
There isn't one right way to be successful, but if you take the approach that fits your personality then you have matched who you are to what you do. And when what you make is lined up with who you are, then your problem solving is integrated with how your business was built, your efforts will more likely be effective, and you'll be happier.
Sure there are dynamics that need attention, and one of them is understanding the value of your piece. For your customer, value can mean getting a lot for what is paid, and to the maker it can mean the piece has value, so you should get paid a lot for what you make. In a way it’s like putting a humidifier in the same room as a dehumidifier and letting them battle it out.
So, what is the right price - the one you have to stand behind in your booth and that will provide for your business and personal growth, as well as cover your responsibilities at home? It's simply whatever you want it to be. You can’t project your preconceptions about what you think are other artists’ pricing structures on what you make. Your work isn't interchangeable with anyone else's. Neither are you. So make your price your own.
Keith Lewis has created and run several craft businesses in the last 30-plus years, as well as a game manufacturing venture involving more than 100 employees and contractors in three countries. His jewelry is carried by craft galleries and museum stores across the country, including the Smithsonian Museum Shops, but he is most gratified to be in the collection of each craft-event participant who has chosen his work over the years.
From the Studio features ACC artists discussing the business side of craft, life as a craft artist, the ins and outs of craft shows, and more. Read more From the Studio posts.