Pricing Artwork is Awkward, Especially When it's My Own.
If you've ever had to sell something you've created, this is not going to be news to you, but setting the price of handiwork is awkward. I think the same basic principle that led society to default to removing the price-tag from gifts we give leads to my pause; it's not polite to share how much you spent on something, or something like that. Yet, in reality, we have more information than ever to find out for ourselves how much something costs, so is it REALLY all that much of a secret #lowercarsalesmargins? For art, maybe yes.
Harkening back to my microeconomics courses, original and unique artwork is a prime example of a good with fixed supply, a completely vertical line on the classic supply and demand graph, where the quantity supplied does not depend on price (this line is usually up and to the right). That vertical line slants, however, if an artist sells unlimited reproductions; now there is a dynamic supply situation where they will produce as many as will sell. The tradeoff for the artist then is how far they want to increase distribution at the risk of losing the art's value of exclusivity. There's a reason that prints usually have a penciled-in number on the bottom right of a print, it denotes the limited supply.
Helpful graphical example of a vertical supply line. No matter the demand, quantity is fixed. There's only one "Sistine Chapel" and there are only 12 prints in an edition, for example.
Now as far as demand, art is mostly considered a luxury good, having an elastic demand curve. This means, that unlike toilet paper, bread, and milk which you'll buy no matter the price in natural disaster scenarios, art is very price sensitive. A small change in price can have a big change in demand. In terms of market position, art is not usually going to be a "need" and the price has a big effect on sales. For instance, if I price a painting at $100 that you want to gift to a friend, you have a lot of options for other gifts you could give with that $100 - why give a gift where enjoyment is highly subjective to tastes and wall space? The levers a non-gallery represented artist has to pull to influence demand include: socialization/marketing (read: social media platforms) to increase awareness, style (to cater to to various tastes), and price. And that brings us to the point of this post. Pricing art is hard.
In general, both time and the size of the market accelerate the arrival to the theoretical right market price. Unfortunately, the size of an art market is hard to deduce, partly due to subjectivity and tastes and partly because, like those removed gift price-tags, artists aren't always advertising what they charge. I appreciated this quote from a 2002 study on "The Demand for the Arts":
The estimation of micro demand equations for the arts requires large samples in order to obtain a sufficient number of participants and be able to correct for a potential selectivity bias.
Lévy-Garboua, Montmarquette. The Demand for the Arts, 2002.
Currently my day job is product management, and most of my decisions are data-driven. I'll come to and back up my decisions via analyzing large sets of qualitative and quantitative data. So for a gal like me to not have these "large samples" for demand equations, how am I supposed to know what the right price is? Add to this lack of data the vulnerability of "presenting" work to the world in various tones and degrees of formality and you arrive at the heart of the awkwardness of this transaction (especially with friends).
So, if you're curious to know how I currently go about it, the answer is, it's ever-changing, but I'm getting closer to my formula. There are a couple of ways to standardize pricing. I'll demonstrate two methods that I've recently been comparing: price per square inch and a linear pricing model.
Price per square inch: (length * width * time multiplier * price per square inch) + outstanding materials = sale price
Linear pricing: (length + width) * multiplier = sale price
In each of these formulas, I vary the multiplier depending on the medium (most for oils due to cost and time, least for illustration). The difference in price output should not be surprising, but to demonstrate, I'll share some of the numbers I've been looking at. I plugged in some square dimensions and wanted to see where/how the prices diverged. In this example, For anything up to a square foot, the price per square inch is cheaper. Past a square foot and the price per square inch starts to massively increase. Take a look at 24 inches by 24 inches. The price per square inch model outputs a price of $864 whereas the linear price is $432.
These numbers are more representative than suggestive, but my takeaway is that for my style of painting, the linear model might be more sustainable when the demand is pretty low.
Like every area other area of life, I'm sure my multiplier will change, as will my feelings about what it means to "be an artist." Thanks for reading and empathizing with my feelings of awkwardness as I also grow in confidence. Let me know what you think if you so choose!
