The 3 Common Art Pricing Formulas and How They Are Failing You
A friend and fellow artist, Julie ‘Jules’ McCullough, asked me to meet with her at a little coffee shop so that I could show her how I price my art.
At the time, I used a rather complicated spreadsheet that took the top pricing method and derived a number. It was the Square Inch formula: Square Inch x $ = $ amount.
Now, Julie and I are both from the corporate world. After an hour of going through my spreadsheet and explaining the calculations, we were both in total agreement that this formula didn’t make any sense for multiple reasons I’ll get into it in a second.
And it was at that point both of us left the coffee shop and thought welp - that’s what we are supposed to do….even though it doesn’t make sense. AND because it didn’t make sense I kept noodling at it...
It was this conversation in 2019 that was the catalyst to create a formula that made sense and will serve artists from this point forward.
So off I went, to solve a problem.
What is needed to price our artwork?
According to Artwork Archive.com’s article “How to Price consistently for art sales success” https://www.artworkarchive.com/blog/how-to-price-consistently-for-art-sales-success blog
There are only 3 formulas to calculate your artwork’s value.
Let’s review these 3 common pricing formulas and evaluate together and discuss the logic behind each.
FORMULA 1: Square Inch × Dollar Amount = Amount you should charge
In this formula, there are 2 variables “Dollar Amount” and the “Amount you should charge”. Which makes it impossible to solve unless you have a base assumption in one of the variables.
But that wasn’t my only beef with this formula:
- Where did the Dollar Amount come from?
- Why in the sam-hill do I care about the square inch?
- If I were to guess 1.25 for an 8x10, I would charge $100, and if I did the same for a 16x20, I would charge $400...why would I charge 4x the amount for a painting that is only 2x the size?
THE ONLY logical reason I could come up with why this formula exists is for a gallery. A gallery would want to charge per square inch because they have limited wall space. In a gallery equation, I would know that you have x monthly recurring expenses to cover and only limited wall space and you come to the $ amount.
This is a formula for a gallery - not an artist!
FORMULA 2: (Hourly Wage × Hours Spent) + Cost of Materials = Amount to Charge
In this formula there are 2 variables as well: Hourly Wage and Amount to charge which is again impossible to calculate unless you have a base assumption of either the hourly wage or the amount to charge.
But in addition to the existence of 2 variables there were other problems with this formula:
- As an artist we are not working 40 hours a week painting, which is the amount this formula is trying to compute. This formula only covers the cost of producing the work - not all the other factors like monthly website fees, monthly advertising fees, rent, business insurance etc….
- This formula calculates the wholesale cost of products. Which results in the inability to create a living wage.
FORMULA 3: (Height + Width) × Multiplier = Amount to Charge
In this formula, there are 2 variables “Multiplier” and the “Amount to charge”. Which makes it impossible to solve unless you have a base assumption in one of the variables.
But that wasn’t my only beef with this formula:
- The Multiplier comes from the gallery perspective where the multiplier is determined based on “credentials and reputation”. So my question is who determines this multiplier and where is it documented?
- If the Multiplier is based on “credentials and reputation” then don’t those two things come with time and experience?
This formula falls in line with the same issues as Formula #1 - The ONLY valid reason to calculate the linear inch is if you are a gallery and KNOW that you have x expenses to cover and limited wall space and you come to the $ amount.
Where did this outdated art pricing structure come from?
My hypothesis is that the per-square-inch model and linear square-inch model of art pricing were invented by a Gallery because they had limited space on their walls and wanted to ensure that the maximum amount per square inch could be obtained.
Think about that for a second: a good gallery or museum will not put a cluster of paintings in a single space which may increase their likelihood of selling paintings because of variety but instead feature a single piece with a 3-5 foot radius around it of white space.
Galleries have rent to attend to, salaries to pay, and all the expenses for a brick and mortar space. This formula makes sense for galleries...but not for us who exist online...
The second formula is good, but only for calculating the cost of the artwork, not what it should be sold for. So....
So what is the right formula?
My Art Pricing Formula removes all variables of Race, Gender, Geographical Location and instead bases the price you should charge on Skill and Experience.