How to Price Artwork: Your Billable Rate

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When you are self-employed, you set the value of your time. You determine how much you make and how much time you spend working. This is one of the best part of self employment—it it can also be the hardest part to get right. Setting your billable rate will make it vastly easier to know how to price artwork.

So how much should you charge for your time as an artist? Start with the big picture (annual goal), and break it into small sections until you get to your hourly rate. Then you have what you need to set a billable rate for your work.

Determining Your Billable Rate

What’s your lifestyle goal?

Identify what monthly/yearly personal expenses you want to support. (Note: these are not business expenses like studio space, materials, computer for work.) Then set an annual salary goal that would achieve this (don’t forget about taxes). At the beginning, start with what you need to survive. Consider basic financial self-dependence a major success to be proud of. Establish a stable income and sustainable operation and it will be easier to grow. 

How much do you want to work?

Your lifestyle covers your personal expenses, but work-life balance needs to be considered as well. Set an hours-per-week target that includes all work: inspiration, practice, production, marketing, sales and administration.

Determine your hourly rate for pricing.

First, take your annual salary goal, and divide it by 52 weeks in the year. As an example, let’s say your salary goal is $52,000. This means your weekly revenue target is $1000 dollars a week. But there’s a catch…

Not all time is billable. Your customer doesn’t want to pay you directly for your administrative, marketing and sales hours. But they will pay for your production. Therefore, your billable production rate needs to account for non-billable time.Using the example above, let’s say your goal is to make $1000 in a 40 hour work week. Your hourly rate (what the business pays you) is $25/hour. But you estimate 50% of your time (20 hours) is spent on hard to bill or non-billable tasks. So to make $1000 a week in 20 hours you need to charge $50/hour—this is your billable rate.

The full equation described above looks like this:

[Annual Salary Goal/(Weekly Work Hours Goal * 52)]/Proportion of Billable Time = Your Billable Rate

Using numbers from the example it looks like this: [$52000/(40 hour x 52 weeks)]/.5 = $50/hour.

To review: 

  • An hourly rate is what the business pays you. 
  • A billable rate is what the business needs to make to cover expenses (like your salary in this example.) 

For a freelancer or a self-employed person getting started, these simple calculations are a good place to start. This billable rate sets the foundation for how to price artwork. This is the number you need to take home. As the business grows, your pricing needs to cover additional costs and expenses as well.

Higher billable rates require more sales energy.

The audience and customer needs to know why your time is so valuable. The higher your prices, the more convincing required.

Communicate your process. Even though we’ve calculated a billable rate using strict measures, the value artists provide transcends any one hour doing your work. Each hour of your work is the culmination of a lifetime of honing your craft. The real cost of art is immeasurable.

Communicate your uniqueness. Help them feel something special that money can’t buy otherwise. Remind your audience they are involved in an exchange that transcends money. 

Ultimately, as the business grows, billable rates evolve and account for more expenses than the owner’s salary. A sustainable business needs to cover costs of production and expenses besides your salary. Furthermore, to make a “profit” your price needs to exceed your time, costs and expenses.

To dig deeper, read more about how to price artwork and recover direct and indirect costs. If you’re ready to grow your artistic practice, coaching will help you determine your billable rate, and start building a sustainable creative business.

 

Banner art credits: Mantel Clock by Ulrich Fischer and Lorenz Rothkranz is watercolor and graphite on cardboard from the Index of American Design. The art in the Index of America Design, including Fischer and Rothkranz, catalogs clean well lit renderings of familiar objects without shadow or context. In a graphical style, they lend themselves to digital re-interpolation. Used in this way, the clarity of depiction gives the object the air of a symbol.

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How to Price Artwork: the Subjective Price

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Basic business pricing strategies—like calculating costs or determining your billable rate—make pricing artwork more approachable. However, it’s the subjective and perceived value of artwork that makes pricing artwork slippery. Still, there are still concrete methods to help determine how to price artwork despite the “relativity” or “subjectivity” of prices in the art market.

The following guides the research involved in selling a client’s art. After determining the minimum price any artwork needs to pay the bills, these questions help weigh and measure a piece’s price against its audience and market.

What can your audience offer?

Collectors, enthusiasts, company art initiatives—all have objective guidelines for their purchasing decisions:

  • Wealth or budget: what proportion of your income are you willing to spend on a discretionary purchase? Your audience has a budget too. A beginner collector who buys 1-2 pieces a year probably isn’t willing to spend more than 5-10% of their annual income on these purchases. 
  • Awareness of costs to produce: one advantage of corporate clients (companies or businesspersons) is that they better understand how the cost of time adds up quickly.
  • Functional needs: does your piece do something that comparable products could do? For example: shade a room, fill a gap in wall space, custom match a design/brand element, show love to a partner. Your audience will know your art has more value than a purchase from a big box store, but they’ll still compare your price to it. The price increase needs to be proportional to the value added by the uniqueness of a custom artwork.
  • Market price: your audience follows and multiple artists the same way you do. Your vision is uniquely yours, but your pricing will still be compared to the other “competitors” your audience follows.

It’s easy to get wrapped up in how artwork transcends value. (Because it does!) But ultimately, these concrete factors play a major role in your audience’s ability to invest in you.

After considering these factors, the subjective comes into focus: 

  • Desire: do they want your work and how much? How much more than alternative (cheaper) solutions?
  • Affect: does the work make them feel something that nothing else can? 

A potential buyer should acknowledge the immeasurable worth of your work—but how much more can they realistically afford? Evaluating the financial situation of our audience members (or simply asking them) provides concrete guidelines for how to price artwork. 

What part of the audience’s offer can the producer influence? And how?

You can’t make your audience wealthier so they can afford your work. But other factors above can be influenced:

  • Educate about production costs: even if they expected big box store prices on art, when an audience member really values your work, it’s a good chance to educate your audience about the cost and time required to produce something they appreciate.
  • Educate about process and materials: do they know about the rigor of your practice? The exclusivity of your technique? What about the quality of your materials? These are all major selling points which get glossed over by focusing on subjective responses to the “image” (or form) itself.
  • Distinction from the competition: That competition may be a set of blinds from a big box store or another artist. Regardless, it instills trust in your pricing when it’s clear you’ve researched their alternatives.

It’s not just desire and affect. Don’t expect to inspire all potential buyers to simply want the work more or fall more in love with it to justify prices. By starting with concrete factors, subjective wants or needs give helpful context to the sales process. Therefore, desire and affect don’t need to drive the whole sale. Instead, they help account for marginal differences or justify differences in perceived value.

But can a producer heighten an audience’s desire? (And offer?)

YES. This is the end goal of marketing and sales in art—help the audience see an artwork’s true value, thereby justifying the price. There are a lot of marketing and sales strategies. A simple one we like is Billy Broas’ Five Lightbulbs—identify the audience’s status quo, and give them a vision of how our offer gets them out.

The concrete market research tactics here are a first step in identifying an audience’s status quo and account for it when determining how to price artwork. If you have artwork you’re ready to sell, you need support. Coaching or management are both ways we can help you develop your marketing and sales strategy.

 

Banner art credits: Portrait of Vincent van Gogh, 1925/1928 by an anonymous imitator. It’s unclear whether this piece was a respectable, uncanny study of Van Gogh’s work or a forgery trying to profit posthumously on the artist’s distinctive style.

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How to Price Artwork: the Objective Price

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Large or small, new or old, all businesses carefully evaluate pricing—and reevaluate them often. To be sustainable, businesses of every size set a minimum price to cover all costs and expenses. This is the objective angle on how to price artwork.

All businesses have direct and indirect costs associated with goods and services. As artists (especially starting out) your time is the most slippery part. Your time is a cost and an expense. Do you know what it is worth? Breaking it down and following the categories below, is the first step toward paying yourself what you deserve for your work.

Direct Costs of Artwork

Direct costs of a good or service are purchases and expenses (including your time) that would not exist if you did not produce a product or deliver services. These are “direct” costs, because they can be directly connected to specific deliverables. Start here to know how to price artwork.

In a restaurant, direct cost includes the price the restaurant paid for the piece of salmon you ate and the approx. twenty minutes of wage labor put directly into getting your piece of salmon from the cooler to the table.

Often, artists and creative businesses sell both products and services.

Products have material costs directly connected to their production.

Services are time based (usually evaluated hourly or daily)

  • If you are on a job site working (billing for this time is a definite)
  • If you are communicating with your client to plan, strategize, design the service
  • If you are running errands for a gig

Usually, an artist’s work typically includes both products and services. The associated costs are unclear at times. To get started, track your direct costs and time. If these costs are not covered, the business is losing money and not sustainable.

Indirect Costs of Being in Business

Next, billing for direct costs is not enough. Regardless of if a product is sold or service rendered, business has an expense to pay. These indirect costs factor heavily into how to price artwork. “Indirect” costs cannot be connected directly to a discrete product or service. Typically, these are the costs of simply existing as a business, regardless of whether you’re selling anything. They include:

  • Space to make, operate, or store. (e.g. a studio or office)
  • Tools/equipment to make (that are not consumables related to specific products or services)
  • Tools/equipment to operate the business (e.g. computers, software, printers)
  • Insurance to protect in a litigious world
  • Marketing services (or your time planning, producing and sharing content)
  • Professional support services (e.g. accountant, lawyer, creative coach)
  • Sales support (e.g. application/grant fees, sample products)

And don’t forget your time (or your staff’s time) to do these operations. 

How do you know whether your time is a direct or indirect cost? Look at the restaurant example again: when the cook prepared your piece of salmon their time was a direct cost. But when the cook sharpened their knife, pre-heated the grill, and cleaned their station before and after—this time is an indirect cost. The food couldn’t be prepared without this labor, but that time did not directly create the final product sold (your piece of salmon).

Start with Simple Math

First, calculate the direct costs of the product or service you provide. Include time and material direct costs. If you’re not tracking your time and expenses, you should start.

Ultimately, calculating indirect cost requires tracking and bookkeeping. However, if you can estimate annual expenses, break it into the amount of pieces you sell and spread it out over each. If you sell 10 works of art a year, add 10% of your annual expenses to each work’s price

Still not sure how to price artwork? Let’s talk about coaching services to get you started, or flexible bookkeeping services to grow your creative business.

 

Banner art credits: Money Bag c. 1936 by Roberta Spicer and Scales, 1935/1942 by Peter Connin; both are watercolor and graphite on cardboard from the Index of American Design. The art in the Index of America Design, including Spicer and Connin’s, catalogs clean well lit renderings of familiar objects without shadow or context. In a graphical style, they lend themselves to digital re-interpolation. Used in this way, the clarity of depiction gives the object the air of a symbol.

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Making Myths and Luxuries: Branding Lessons for Artists

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In the corporate world, we talk about “brand” to discuss a company’s identity. Much like human identities, there are many brand possibilities for companies. Brands can be fun and playful, irreverent, serious, etc.

While the word brand might be too stiff or formal for an artist’s business, artists still have an identity. And developing your identity is key to being successful. For artist entrepreneurs, it can be fun and valuable to explore what identity they want their business to have. Artist branding doesn’t have to be a bad thing.

 

What Is a Brand?

We often think of a brand as a logo, but it’s a lot more than a stylish symbol. A common phrase in corporate marketing is, “A brand is what your customers say it is.” In other words, a brand is the emotional connection between the company, its products, and the customer. A brand is complex; it is the essence of a company and the relationship of that essence to its audience. 

When customers buy something from a brand they like, they’re not just buying a product or a service. They’re buying meaning, something that goes beyond function and reflects on how the customer views themselves. 

 

Something similar can be said for art. 

 

Certainly, most people don’t buy art for its functional value the way they buy, say, a pair of shoes or a car. They buy art for how it makes them feel. A big part of that is the storytelling that happens around the art, what I like to call the Myth.

 

Myth Making for Artists

What makes one artist more well-known than another? Is it that their work is better than others? 

Sometimes a revered artists work IS better, but likely what makes an artist more well known than another is differentiation! More often than not, it’s the myths created around the artist and their artwork that heighten the audience’s value of the creative output. In branding, we call this “myth” a brand story.

 

What is a myth, exactly? 

 

It’s more than a story. Myths often have some common characteristics, including:

  • A story with a nearly unbelievable—but still possible—arc. 
  • An origin, a transformation, and an expansive possibility

Myths are created to teach us, to inspire us, and to help us understand our own experiences in the world. The ability to craft and articulate a myth can be very valuable to an artist seeking to sustain themselves through the sale of their artwork.

 

For artists, this usually translates to:

  • An origin story somewhere between truth and fiction, but that showcases the artist’s humanity. It is where you are from in all aspects. Your hometown, your family, your friends and colleagues, and all the unique things and experiences that make you, YOU.
  • A transition where they experience concepts and learn skills to turn ideas into things. It is how you emerged as an artist. Your early experiences. The teacher that recognizes your talent. The training that refined you. The critique that made you. The transition is the awareness of you as a creative force.  A vision of things yet to exist. The artist has dreams of concepts, ideas and inventions that will enrich them as a creator.

 

So how does myth making translate to selling art? To understand this, it’s important to understand what type of business you want to be and to develop a myth that embraces the type. 

 

Three Types of Businesses

There are essentially three types of business: Commodity, Premium, and Luxury. Let’s take a quick look at what each of these are. 

 

Commodity Business 

Commodities are interchangeable goods or services. Their price is controlled by the customer, who can buy any number of products or services that are nearly the same  from a selection of vendors. For example, it doesn’t matter whether they buy the store brand of sugar or a name brand. The product is essentially the same and the creator has no control over the price.

 

Fine art is rarely sold as a commodity, though there are certainly websites where artists can sell various quality prints of their work as a commodity. This might be most akin to an unlimited print run.

 

Premium Business

A premium business sells differentiated products or services based on quality of material, skill, or customer support. The prices are often tied to what the market will bear, but is also greatly influenced by the quantity and expansiveness of offerings that supply has created in the marketplace. The creator has some control over the price, although the peers that they are competing with will influence price as well.

 

For an artist business, a premium business model can make a lot of sense. The artist often selects ideal materials for their creations and their skill is often high caliber. Together, the quality of materials and expertise of craftsmanship to make a work of art can command premium pricing, although your price may be influenced by your fellow premium peers.

 

Luxury Business

Luxury businesses are distinguished from the other types based on often irrational, subjective reasons. Products and services in this category are driven by scarcity, usually manufactured, and priced much higher than the value of the materials or skill needed to create them. In some ways, luxury products transcend reality by enabling the customer to be, think, say or do something beyond themselves. 

 

Think of almost any high-end luxury clothing brand where it’s all about the designer’s name and the brand rather than the material of the product or the skill of the person actually making the goods (either by hand or using machines). 

 

Art easily lends itself to this category, and much of society also sees art as a luxury. Not only is art a perspective, expression or manifestation of an idea that reflects the buyer, but its supply is greatly limited, it is usually unique, and only the artist has the skill and experience to create it. As a luxury brand, the artist and their business team can have significant control of the price.

 

Where Does Your Artist Business Fit In?

So what do these three types of businesses have to do with making myths? Oftentimes, the myth defines the business type. In other words, your art might be totally differentiated from every single piece of art out there. But it is your myth—your story, your skill, your experiences, etc.—that defines whether your art is a commodity, a premium product, or a luxury experience. How accessible your myth is to your audience also plays an important role. If no one knows the myth–or understands it–it kind of doesn’t exist!

 

Keep in mind that you may work through all three of these types of businesses over your art career. You might start at the commodity level, maybe churning out similar, less differentiated work at first. Then, as both your artistic vision and business skills mature, you might morph into a premium business, making fewer pieces (i.e. reducing supply) and growing the perceived value of your work. Finally, you might further refine your model to develop luxury pieces and services, such as painting commissioned murals in a customer’s home or designing Diadora’s next show line.

 

Ultimately, the direction you choose to take your business is yours. But if you need guidance in refining your vision and understanding how to build a business that supports your art, I’m here to help. Contact me to discuss how to build your income as an artist in a way that aligns with your artistic vision.

 

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Pricing Artwork doesn’t have to be magic: How do I Price My Artwork?

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“How much should I sell my art for?” 

Too often, I find that artists asking that question don’t have a good sense of what their work is worth and are vastly undervaluing their art. 

Case in point: I have a client who was recently offered a commission for $2,000. It sounded great on the surface, but when we dug into the details, we realized the project would run six weeks and prevent the client from doing any other work. Projecting out based on that one project, this artist would make less than $18,000/year. Basically minimum wage. 

Your work is worth more than that, isn’t it? I certainly hope you believe it is. 

So how should you price your art? 

 

Subjective vs. Objective Pricing

Artists frequently price their work subjectively, meaning they give it a price based on what they think its value is. But price and value are two different things. 

Value is what an artwork is worth to somebody. It’s subjective because many factors go into the value of an artwork, such as the owner’s sentiment towards it, rarity, age, etc. When we say something has a “market value,” that’s basically what a piece could get in a market. But that doesn’t always mean it’s what someone is willing to pay. 

Price, on the other hand, is objective. Or at least it’s based on some objective measures. Price is a function of supply and demand (I know…economics terms always make me groan, too). As an artist, you control the supply of your artwork and you can influence the demand (see blog post: art marketing plan). 

 

How to Price Your Art

Luckily, there’s a relatively simple way to price your art (the objective part), though it does require a little bit of math.

(Good accounting can help you with this part)

First, you need to consider what the cost of your supplies are. That includes all the items you need to make your art (tools, materials, etc.) but it also includes things like your rent for your studio, electricity and heating costs, etc. Basically, anything that you need to create your work should be included. This is where tracking your finances comes in handy. 

Secondly, you need to figure out your hourly rate. Even though we don’t like to think of ourselves as hourly workers, this is an essential step to coming up with a fair market price for your work. To calculate this, consider what you would like to make annually before taxes. For the sake of simplicity, let’s just say $52,000/year. 

To calculate your hourly rate, you need to divide the annual salary by the number of hours you work each week. First, divide your annual salary by 52 (there are 52 weeks in the year), and then divide that number by the number of hours you work. For argument’s sake, let’s say 40, since that’s the standard for full-time work. Here’s what that looks like:

$52,000/52 weeks = $1,000 per week

$1000 per week/40 hours = $25/hour

That’s your hourly rate. Now, consider how long it takes you to complete a single piece of art. Let’s say something took you five hours to finish. 

5 x $25/hour = $125

But that doesn’t account for things like supplies. Let’s say it costs you $50 in supplies to make a particular piece. Thus, your total cost would be $175 (your labor and supplies). It’s important to note that this should be considered the base price. Don’t forget you have to add in other factors like a portion of your studio rent, insurance, marketing costs and other overhead items. The price needs to be closer to $300 (labor + supplies + overhead)

Ultimately, how you price your work should be a combination of objective (the real costs like labor, supplies and overhead)  and subjective (the desirability, rarity and non-measurable things) approaches. It should meet your bare minimum of what you need to make to sustain yourself as an artist, of course, AND you can also take into consideration how others feel about your art.  The good news is, that could be a whole lot more than you think!

If pricing still feels a bit overwhelming, don’t worry. It takes time to figure out your numbers. It can also be helpful to have someone to talk to about it. Feel free to reach out for a chat if you want more space to think out loud with someone. 

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How to sell your artwork: Know Your Value

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Cute English Bulldog in Hat

Charlie is more than a dog. She is constant love and creator of joy.

 

People ask regularly how I ended up in the arts with my background from rural Minnesota and two engineering degrees. I will spare the details of the journey for another post, but my vocation in the arts is due to my recognition that art is the most valuable creation of humankind. 

 

Art is hoarded by people in positions of influence across history and frankly, it is what endures from every civilization. As much as we revere science and technology today, they will always be a part of the process, never the destination. 1000 years from today our data and the findings gleaned will make us look like flatearthers and I have no doubt the iPhone 12 will overwhelmingly end up in the heap of refuse.

 

What is it about art that makes it so valuable?

 

To the creators, their artwork is an opportunity to be fully seen. Art is the tool we use to express ourselves. It brings the deepest parts of our being into the world. The word on paper, the paint on canvas, the harmony of stroked keys, the movement through space and the images captured on film are the manifestations of our thinking, our feeling and our intuitions. The work we create is the essence of who we are. It allows us to understand ourselves and just as important it allows others to understand us as well.

 

To other individuals, artwork is an opportunity to also be seen as well as expand the resources that are available to them. An artist allows their audience to say things that they could never put into words themselves. But more powerfully, the artist and their work allows the audience to think, to feel, and to sense the world in ways beyond their own faculties. Artworks allow the audience to gain knowledge, to build new relationships and to navigate the world in new ways. Through art, the audience is able to open up new opportunities.

 

When the audience becomes more than another individual the artwork is amplified. Society operating with a collective idea, feeling or sensation is a powerful tool for world changing activity. Art is often the catalyst that bends the universe towards love, justice and all the good things we aspire to. And yes, I should note it can also be used for detriment in the wrong hands.

 

Art has incredible power, for the creator, the audience and society and as such it is incredibly valuable! 

 

My vocation is to help artists harness the value of their artwork so they can impact the world, and simultaneously help the audience harness the power of art to enrich their own lives and the world around them.

 

THIS IS THE FIRST PART IN A MULTIPART SERIES ON SELLING ART

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