Pricing Art

This is something I’ve wanted to talk about for a while now, but with exams finally over, I now have some time to write!

Very often people will ask artists, “How do you price your work?”  The short answer here is… it depends.  There are a lot of interesting market factors that go into that decision, some of which I want to look at more in-depth.

The Economics of Art

In economic theory, a firm can set their price for a good or service at the average variable cost of their competitor to drive them out of business. But when you’re an artist, especially a sole proprietor, how do you measure that cost? And even if you priced below what your competition could afford, why would you want to?

Additionally, when a firm is pricing too low for a product or service, they destroy the market.  In these cases a larger market player can simply acquire the business and fix this problem.  In the illustration market, this is not possible.

My point here is that so many of the rules that apply to businesses when it comes to pricing go completely out the window when you are looking at an industry as volatile and preference-based as art.  Many people can agree on what a good meal tastes like and should cost, few can agree on what is good art and what its value is.  As a result, artists must make the assessment of the value of their art themselves, which can be extremely difficult as artists can tend towards overvaluing or undervaluing their work based on their confidence level.  If not the artist, though, then who has that price-making power?

The simple answer here is: the market.  Unfortunately, because there are relatively few customers to a relatively large number of highly differentiated suppliers, the artist has limited power to negotiate on price until their work is differentiated or renowned (we could say “branded”) enough to let them set prices.

My overall conclusion is that the market for art, when first starting out, starts out as an monopolistic competition.  The artist then reaches a certain tier, if they are lucky, hardworking, talented, and marketing-savvy, among other factors, and then they move into a more monopolistic market.

There is a huge problem here, though, which is that in the long run, monopolistic competitive firms make zero economic profit.  This means that you will be scraping by– breaking even– which is fine, but is probably the basis behind the “starving artist” stereotype.  The key, then,  is to move yourself from that pool of “working artists” into the pool of “famous artists”- moving from a monopolistic competitor to a monopolist.  As with any product or service, there is no secret formula for how to do this.  There are, however, some business and economic theories that can be helpful in determining ways to get your prices up to start that process.

Bargaining Power

You never want to have just one supplier or one customer- having two at least keeps them in competition, driving your costs down and your prices up.  If your work is in demand by Company X, you can tell Company Y “Sorry, I have another offer, unless you can match or better on price.”  You’d be amazed at how well this works.  It works for other areas of life, too- phone, internet, etc.  (Just don’t try it dating…) The trick here is also not to get caught on the other end of this trap!  You don’t want Company X to say “Well, we have another artist we can go to for this.”

Willingness to Pay

Customers are willing to pay for a more differentiated, higher quality product.  Increasing the willingness to pay is tricky, but doing top-notch work repeatedly for clients will go a long way to earning customer loyalty, increasing demand, and increasing the dollar amount per piece that you will receive.

Pricing Rules

Or should I say, the lack thereof?  There are no hard and fast rules, per se.

From an economist’s standpoint, to maximize profit you should be pricing at the point where your marginal costs equal your marginal revenue.  In order for you to do this, you’d have to have to know the demand equation for your work.  If you are interested, let me know and I can do a blog post explaining this in much more detail, but for the sake of brevity: it gets complicated.

Simple solutions:

Price by Cost + Margin: Figure out number of pieces you can make each month, figure out what your bills and food cost you each month.  Divide your $bills/#pieces = lowest price per piece you can charge.  Add a margin for profit.

Example: Sam pays $2000 per month in rent, food, bills, etc.  He can create 8 pieces each month. $2000/8= $250 per piece to break even.  He wants to make a 20% margin so he has some money in the bank: 20% of $250 = $50.  Sam should be charging $300/piece.

Price Hourly: Another pricing strategy is to price by hour.  This is very difficult to do, since sometimes a brilliant piece will take you only a few hours, and other times you struggle with it for weeks.

Price = Materials Cost + # hours * $ wage per hour

Example: Sam wants to make $25/hour (art is a skilled profession after all and $25/hour is pretty low!).  He works digitally and so has no overhead.  On average, he spends about 12 hours on a piece.  12 * $25 = $300 per piece.

Art as a Firm

The last thing that I wanted to look at is the “Studio” phenomenon- artists collectively working together in order to increase their pricing power, share profits, and think more business-like!  I love this model, and I think that if the industry trends towards this structure, art as a profession will become much more feasible for more people.

The Orphan Works Bill

I wanted to take a minute to address a big issue facing artists that surprisingly few people know about.

In 2006, a bill was introduced to the U.S. House of Representatives called the Orphan Works Bill.  It was later withdrawn, then reintroduced in 2008, and made it on to Congress at that time.

An orphan work is a copyright work where it is difficult or impossible to contact the copyright holder.  When do you own a copyright? Under current law, as soon as you make your work.  Your copyright lasts until the day you die, plus 70 years in the U.S., sometimes longer depending on various factors.

The Orphan Works Bill calls for the creation of a database of all Pictorial, Graphic and Sculptural Works (Section 3). It also allows people to use potentially copyrighted material so long as they do a “reasonable” search for the owner.  If they cannot find the copyright owner, the work becomes public domain.

The underlying purpose here is that you will have to PAY to register your work on this mysterious database or people will be allowed to use it, claiming a reasonable search.  Under current law, you do not have to register a copyright to benefit from protection, but you can, and if you can you can seek statutory damages if your copyright is infringed.

You can see why so many artists are opposed to this bill.  For people who only produce a few or a dozen works per year, registering them might not be too costly, but imagine the cost for photographers, who might produce hundreds of pictures on a weekly basis.

So what can you do?

View the bill.

Read the proposed amendments.

Join a group in support of stopping or amending the bill.

Spread the word among your artist friends. The more people that know about this, the better.

Call you legislator and tell them why this would negatively impact you.

We cannot afford to be in the dark on this one, so I hope everyone will take a personal interest and get involved in this.

Marketing Your Art

I received this great question from Chantal Fournier, who asks:

I was wondering if you have any advice to offer on paying for advertising, online or offline. Have you or Jeff ever tried it, and was it worth it?

Since advertising falls into the larger scope of “marketing” in my mind, I’d like to address marketing as a whole.  It can be a  tricky subject, especially depending on what specific niche of the art industry you are interested in pursuing, and how you are planning on growing your business.

First off, to answer the question straight away, Jeff and I have paid for a bunch of marketing tools, but never gone directly for buying ads in a magazine or on a website.  Part of this is because the market that we’re in is not very sensitive to advertising, and relies more on brand recognition and word-of-mouth advertising.  The idea is that after building up a body of work for certain companies and on certain products, the art sells itself to collectors/fans.  We don’t need to sink money into advertising to art directors, because the art is either good, or it’s not.  A quick review of Jeff’s website will tell an AD if they want to hire him, and we can maintain and update his portfolio there for very little cost.

Some pay-services are great, and some are a huge waste of time.  People interested in children’s illustration would do well to get an agent, since the industry is hard to break into without one.  Some marketing/advertising expenses that are just plain necessary to the modern artist are:

• A website
• Business cards
• Submission fees to industry-specific publications

The business savvy artist can find ways to get many marketing tools for free (use those social media and networking tools!), but you are best off paying for assets like a quality website and nice, professional business cards.

Website

Having a good, easily navigable, attractive website is absolutely, unequivocally essential. It is the first thing that many art directors or potential clients will see of your work, and if it is sloppy or hard to figure out, they will leave with a bad taste in their mouth, or worse, not even bother to wade through the muck to get to the good stuff.  It doesn’t matter how great your art is if they can’t find it or if they give up.

Some rules for making a good website:

1. Get your own domain. Preferably yourname.com, or yournameart.com.  It looks more professional and serious to have your own domain name, and it’s easier to remember one name than two.  Registering a domain name can be done very cheaply (here and here).  Plus, once you own it, it’s an asset!  Which means it goes on your balance sheet.  A domain is a must, but I really recommend getting a comprehensive hosting package.  There are many good hosts on the market to choose from, I prefer hostgator, myself.
2. Make your gallery page (or some of your best work) your FIRST page.   The people coming to your website want to see your your art, so show them your art!  Not your blog, not your bio, not even a cover page!  I’m paraphrasing, but I believe that credit goes to the incomparable Irene Gallo, who said something along the lines of, “If I have to click more than twice to see your art, I’m already annoyed.”  Don’t annoy art directors, it’s bad.
3. Make it easy to understand and view.  An awesome example of an easily navigable website is Mike Sass’s site.  Using it is a no-brainer!  Another site that has great click-thru capability is Joshua Middleton’s.   Setting up a click-thru gallery like this can be done simply with wordpress gallery plugins, or the very user-friendly squarespace.

Get help!  If you cannot program or manage your own website, you should tap your contacts to see if there is any poor webslave out there who will do it for you.  It is really best if you can do your own content management, which is why a self-hosted wordpress or the regular squarespace package can be so great for artists who aren’t code-savvy.

Business Cards

Oh yes, that old essential.  The business card will never die.

Lots of people I’ve met recently have gotten these neat little half sized cards, or over-sized cards.  These can be great for quick contact info or for a bigger image that highlights a great piece.

Me, though?  I prefer the standard-sized business card.  My card-holder is made to fit the standard 3.5″ by 2″ card, and as long as it has a website, an email, and a phone number on it, I’m good to go.  There are many places where you can get business cards printed and shipped to you for very little cost.  I’ve used both VistaPrint and Overnight Prints, and honestly haven’t seen a huge difference in the quality of the cards.  Another site friends have recommended is Moo. To be very cost effective, you can print your own cards with the right paper and a good paper cutter, but the cost of the online cards is pretty comparable to what you’d spend on supplies and time, anyway.

Submission Fees

Books

I wouldn’t pay to get your artwork into a book that isn’t judged.  There are look-books out there that are carried in art stores for AD’s to find potential hire-ees, but the things are huge, there is no barrier to entry but payment (meaning there is awful work alongside your good work), they aren’t industry specific.

There are books that are very industry specific and some charge a submission fee, with no guarantee of getting published.  Books I know of are Spectrum, Exposé.

Magazines

A lot of times magazine submissions are free, so just do a bit of research.  Find artistic genres that fit your style, and submit to those publications.  There are magazines for every niche of artist out there, ImagineFX, 3×3, Illustration, Illo… the list goes on and on.  Figure where you want your art seen (scene?)  and go from there.  Submitting to online magazines is also a great idea.  The more places you can display your art for free, the better, because you’re maximizing your exposure.

Free Exposure

Competitions

There are always competitions going on somewhere on the internet for artists.  These competitions are great ways to get a foot in the door, get your art seen by a good number of people, as well as practice your craft.  Many competitions have no entry fee, some have a nominal fee.  Just be careful about what competition you take part in: make sure your style matches the acceptable styles for the genre that you are submitting to. You wouldn’t want to see painterly art in a graphic design competition, or children’s illustration style art in a painterly competition.  Assess the audience, and play to your strengths.

Podcasts

Interestingly enough, although people listening to a podcast don’t see your art directly, they will often go look you up if they hear you on a podcast somewhere.  Podcasts can be great marketing tools because of the exposure factor, and are just plain fun to do.  Plus, when you put out a podcast you’re giving something to the world, which is just cool.

As I develop my marketing tools, I’ll probably have a lot more to say on this subject, but for now, I hope this is helpful!

A Business(wo)man’s Guide to GenCon

Today we’re going to break down the business details of going to a convention like GenCon and having a table in the Art Show.  I’m basing this off of current costs, keeping in mind that costs may increase for future years.  GenCon is all about gaming, so this guide is most useful for those focusing on gaming companies as clients for their business.

Why GenCon?

First of all, why go to a convention like GenCon at all?  There are a few reasons, some of them will be more worthwhile than others, depending on where you are in your career.  Your illustration is a business, and with that in mind, you should expect that sometimes you are going to take a loss as part of a future investment.  Hopefully, your investment pays off in the long run even if you are initially out some cash.

The first reason to go to GenCon is to sell your work.  People browse the art show specifically looking for art to purchase- be it originals or prints.  There are a few different types of buyers, too, and different work will appeal to different people.  Artists with a standing reputation and a following can make a decent amount of money at GenCon.  Of course, they got to that point by taking some losses their first years and continuing to come back and be an established part of the art show.

The second reason to go to GenCon is to network within the artistic community.  GenCon is a great place to meet artists who are doing what you do and are passionate about their work.  Artists can give each other great tips and critiques as well as offer really solid advice about where to seek work.  You’ll also get the skinny on pitfalls to avoid that people wouldn’t necessarily talk about in a public forum.

The last big reason to go is that it is THE place to get work in the gaming industry.  Companies will either have portfolio review sessions or they will have an art director on hand to look at portfolios.  Beyond getting very, very helpful critique from this, you can also get jobs.  While all these companies have online ways to submit your portfolio, making face time is always good in any business.

Money

Time to get into the nitty-gritty.  If you are planning on attending GenCon as an artist in the Art Show, here are a lists of costs you should prepare for.

Table: $250 -$320 (rates may go up for next year)

Hotel: $145-160/night, plus tax (if staying in the con hotel).  Artists are guaranteed rooms in nearby hotels at discounted rates.  Yeah… $160 is discounted, if you can believe it.

Parking: $15-$30/day (depending on where you park)

Food and drink: Budget generously, $50/day, and if you don’t spend it, be glad!

Travel: $150-$600, depending on flights or gas costs.  Book early if you can.  Driving is cheaper but much more exhausing.  Flying means you’ll have to package your work very very carefully and ship it there or only bring what you can carry onto the plane.

Supplies: Varies depending on how you are making your prints.  If you are making archival prints, you’ll have to splurge for a bit more.  Read about the differences between archival and non-archival here.

Making Your Own Prints

First of all, you’ll need a printer that can make prints at least 11″ x 17″, preferably 13″ x 19″.  There are a few options out there, so shop around.  We have the Epson Stylus Photo 1400 printer, which prints beautifully, but has very costly ink at nearly $20/cartridge for six cartridges.  Fortunately, there are places you can get discount ink cartridges.  Check out CISinks and InksOutlet for cheap ink, but beware- these cartridges are finikey and can give you some trouble.  But at $6 as opposed to $20 per cartridge, it’s worth a little risk.  If you are getting the free shipping will need to order far enough in advance to allow for slow ground shipping (7-9 days at least).

If you want to make archival prints, you should be looking for acid-free paper like Moab paper.  A lot of retail companies (HP, Epson, Cannon) put logos on the back of their paper, which can be fine, but looks unprofessional in my opinion.  I found that Ilford Galerie paper, while not acid free, is nice, has no logos, and is compatible with most printers.  You can find it online for very reasonable prices, too.  I like the Smooth Pearl Paper, but the Classic Pearl looks nice, too.  I also found a cool sample pack of paper from Moab, if you want to do some printing tests.

Getting Prints Made

An illustrator friend referred me to CatPrint, where he got prints made very reasonably.  He was very happy with the results, too, and said that not having the stress of making his own prints made it very worthwhile.  He said that they have no minimum print order, prints came out to less than $1/piece for 8 1/2″ by 11″, but the prints are not archival as they use a traditional 4-color press.  There are many other print shops on the internet that will do prints for you, so you can shop around for a place you like  (archival printers will cost more).  A note if you are working digitally: print out a test of your file so you can see how the color looks.  I know that on newer Macs the screens are much brighter than older models and PC’s, and prints end up coming out much darker than they read on the screen.  You can adjust the brightness (usually an increase of 25%) to compensate for this with your prints, but you’ll want to do so before you send off files to online printers.

The Extras- Matting and Bags

Some artists mat their work for display, others don’t.  I think that it makes the work look more professional, so I like to do it for the display pieces.  If you mat all your prints, you can charge quite a bit more for them.  If you have a lot of time and patience, you can cut your own mats.  Failing that, there are places to order mat in bulk.  I shopped around a bit and found that Matcutter.com had good deals for the 10 packs of mats.  They also sell clear bags for your work at very reasonable prices.

Selling Prints

Pricing your work where people will want to buy prints can be tricky.  Our first year, we sold only 8 1/2″ by 11″ prints for $5, and we were selling things off the walls.  So we doubled the price, and still sold well.  It’s all a test of supply and demand: if you are selling out, raise your prices, if you are selling badly, lower them.  Most illustrators are selling prints there between $10-$20 for 8 1/2″ by 11″, $15-$30 for 11″ by 17″, and $25-$50 for 13″ by 19″.  Pricing originals is trickier, but the least expensive originals I saw were around $50 for smaller and older work, and the most expensive were several thousand dollars for larger and brand new work.  Joe Slucher came up with an awesome idea and did small framed original character portraits and sold them for $30-$50, the idea being that that way people could afford an original piece and not break the bank.

If your work is matted, sell it for more.  You can bump up the price by $5-$25 with nice matting.  Just choose what you think is reasonable.

Miscellaneous Things To Expect

Have the money that you need for gencon up front.  Print sales don’t go into your pocket directly, you get your check from the show afterwards.  Some things you should have on hand:

• Business cards. These should have your website and email on them at the very least.  Including your phone number for people who want to contact you that way is not a bad idea either.
• A metallic pen (to sign your work).  Silver or gold pens are what most people bring.
• A few black and grey pens (to draw on playmats, the charity auction bags, or card backs).
• A couple ideas of what to draw on-the-spot.
• An assistant.  Someone who can sit at the table when you’re showing your port, etc.  Having help is very nice, and you get two “Artist” badges as part of your table costs anyway, why not take advantage?

You may want to bring:

• A sketchbook.  You have long hours to pass at the table, why not work?
• A sample sheet.  I’d never thought to do this but printing out some 8 1/2″ by 11″ with a few sample works and your contact info on it can be great for industry contacts to remember your work.
• A camera.  There are some pretty cool costumed folks walking around the con, and you may want to snag a photo for reference.  Just be sure to ask, most people wearing costumes are more than happy to pose for you.
• Friends.  If you have friends who are going, having them watch the table for a bit and sharing a room can make your experience much less costly.  Plus, they’ll be happy to be in a hotel near the con- not every gamer gets so lucky.

The show opens Thursday at 10 am.  Have your best work up by Friday AM at the absolute latest.  Friday is when the judges come around looking at all the art, and Friday night is the awards ceremony is Friday after the exhibit hall closes at 6 pm.

Ideally, you will invest less than $2000 into the weekend, and it will pay off in more than that from the sales and jobs you’ll get by being there.  If you don’t feel confident that you’ll make back the costs, try just going to show your portfolio, and then get a table after you’ve done some industry work the following year.

I also talked to some artists that got a vendor booth instead of an artists table.  The vendor booths cost a lot more, but they have the advantage of being all about sales.  People come with their wallets open, as opposed to just browsing the art show in “gallery mode”.  The vendor area also gets more foot traffic than the art show- I can’t help but think that this is because art intimidates people and they feel guilty for not buying, so they avoid the art show altogether, but that’s just my own assumption and not really based on any market research.

If you have any further questions, feel free to leave them in the comments or to email me and I’ll do my best to address them!