Along with our discussion on pricing, I want to present another viewpoint on pricing to make a profit.
Of course, we all want to make a profit with our products, but unless you spend time doing the math — and evaluating the figures you come up with — you will never be in the position of making a profit.
On the other hand, I am not an artisan. Meaning I do not create unique forms of art, nor do I represent anyone who sells fine art. So, if you are a artist, what do you do to make a profit?
A few years back, I represented an Idaho artist who owns her own gallery. She exhibits beautiful western and rustic scenes and wins numerous awards for her work. Can she wholesale these items? I don’t know! But she and I were able to do a good wholesale business together selling reproduction of her work on cards, notepads, magnets, cups, small prints etc. In other words, she was able to continue doing her lovely paintings, but still made a good profit on her mass-produced items.
One of my favorite go-to folks for advice for artisans is The Arts Business Institute. Here is their advice:
Wholesaling is a model that can work for artists who are able to put their work into production and create multiples. The formula for pricing at wholesale is:
Materials + Overhead + Labor + Cost of Sale + Profit = Wholesale Price
Profit is an essential part of this formula, and normally should be about 20% – 30% of the wholesale price. But what is profit anyway?
Profit allows you to grow your business. It lets you buy new equipment, or to expand and grow your business by investing in ways to produce, market or sell. Profit is not what you pay yourself. It is money that gets reinvested in your business……
Do you spend umpteen hours on one piece, and cannot possibly get the price you would need from it? This labor of love results in art that would not be practical to sell profitably. Understand why you are choosing this approach, and that it would not fit as part of a business plan for a profitable business.
If it’s important to you to become a full-time artist, you must take a hard look at the potential ways you can sell and what you need and want in your business. If you cannot reach the point where you pay your costs, yourself, and create profit as well, you may not really have a business – just an expensive hobby.
Hard advice, but very practical! The difference between a business and a hobby is profit! (It is also marketing, in my opinion, but that subject is a whole different article!!)