Monday, August 15, 2011

Why does art cost so much, you ask? Read this and find out...

I've been learning a lot about the science and art of pricing in my Artful Success class. Pricing is one of those thorn-in-the-side issues for all artists. Being creative types who are motivated not by dollars, but by things like inspiration, emotion, beauty and the very act of creating itself, artists often struggle with placing monetary value on their creations.

If there was just one universal formula used to price all artisan-crafted items, this might be easier. But it seems that there are as many formulas as there are works of art. Many seasoned artists don't even use a formula. And while most artists are trying to make a living (or at least a decent second income) with their craft, those who create just as a hobby often further muddy the waters by pricing their work so low that the competition threatens to destroy the artists' ability to make even a small profit, much less a living!

"So," ask those who do not make and sell art, "Why does art cost so much anyway?" For the uninitiated, here's a quick explanation that will hopefully help you understand what goes into the pricing of artisan-crafted work.

1. COGS (costs of goods sold) -- This includes materials and direct labor
  • Materials -- the actual stuff used to make the piece, such as metals (silver, gold, copper, brass), gemstones, glass, fabric, paint -- whatever it might be) Did you know that metals costs have skyrocketed in recent years? When I started making jewelry, silver was $7.00 per ounce. It is now hovering around $40.00! Per ounce! Also, there are fabrication charges. Most of us buy metals in wire or sheet form and we pay for the labor of the manufacturer to make the metal into that form.
  • Direct labor -- most artisan-crafted pieces take a fair amount of time and handwork to create (not to mention expertise that has often taken years to perfect). One of my wire-wrapped pieces can take as much as 6-12 hours, between fusing and shaping wire to create the frame, making headpins to mount gemstones and crystals, coiling and weaving the piece together, mounting gemstones and crystals, etc. Large paintings, of course, take much longer than that! Also, remember that many artists need to hire studio assistants as their businesses grow, so they're often not able to keep the labor costs as income. They need to pay others, too.
2. Indirect labor costs -- This is all the time and effort that is necessary to run a business. Most artists, in fact, spend as much or more time on indirect tasks than they do actually creating art. (I haven't been adding this!) Here are just a few things on this long task list:
  • researching and ordering materials
  • paperwork -- recording sales, taxes and expenses; keeping track of purchases, customers, etc.
  • packing and shipping orders
  • photographing new pieces
  • listing work for sale online or delivering items to galleries
  • recording what was used in creating each piece and removing it from inventory
  • marketing, branding, social networking
  • designing new pieces
3. Overhead -- These are actual costs other than the materials used to create a piece. (Yep, wasn't adding this either.) Once again this is a small section of a longer list:
  • Studio rental or maintenance of a home studio
  • utilities
  • insurance
  • advertising
  • show fees
  • office supplies and equipment
  • tools used in creating art
  • licenses and permits
  • membership and dues
  • bookkeeping/accountant
  • printing
  • credit card processing fees
  • education and travel
  • website design and hosting fees
4. Profit -- If the artist neglects to add a little of this to each piece, I learned, their business is destined to fail. (I have not been adding this either. Clearly, it's time to change my formula!)

Just today, I saw a news story about a local Seattle artist whose handpainted pendants were stolen out of her car. It was reported that $7000 of jewelry was taken. The worst part for me was reading the comments below the article. Shockingly, many people actually posted that there was no way her work could possibly be worth that much. Clearly, most people do not understand what goes into an art business, but it's shameful that they could be so cruel to a woman who just had two months' worth of work stolen from her!

So, next time you step into a gallery or a booth at an art show, please don't make discouraging comments about high prices or claim that you could "make that myself for far less." Perhaps you could make it for less. But you're probably just thinking of the materials costs. You won't be able to eat for long if you try to make a living selling art for that low price!

Art is an expression of the artist's heart and soul. A labor of love. But it's a business, too, so we need to make the numbers work. Very, very few artists are getting rich selling their creations, no matter what their pricing formula includes. So realize the value of a handcrafted piece of art and enjoy owning one if you can, and please be enriched by looking if you can't.

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