Drive Thru (from the series: Insomnia: Hotel Noir)
Price is the fourth of the basic components while developing your Marketing Plan. And it may be the hardest part of your marketing program. Price can be further refined into two parts, Wholesale Price and Retail Price.
Retail Price is probably the easiest to understand as we are constant bombarded in our daily lives with retail pricing and of course discounts to the retail price. Retail price is what the final collector will pay for your artwork. If your artwork is sold in a number of different markets and different prices, you may become aware of what is known as the Average Retail Price (ARP), which is usually less than the Listed Retail Price (LRP) due to discounts and other pricing differences.
Wholesale Price on the other hand are those prices paid by all of the folks between you and the final collector, with the gallery representation the most common wholesale pricing for artists. Galleries usually negotiate their wholesale price as a percentage of the final selling price. There are some general rules of thumb for the galleries and their wholesale pricing, usually stated as a commission, which is your price to the gallery as a percentage of the final retail price, usually range from 40 – 60%. I have recently seen some on-line internet galleries asking for commissions from 20 – 30%. The key word is “asking”, as each gallery has its rules, but the rules are somewhat negotiable for each artist. An extremely well known and sought after artist will have better negotiation leverage than the unknown artist.
Retail pricing is similar to the example above; higher prices will be paid to a well known artist than to an unknown artist who is becoming established. There are collectors who are also investors that they buy an artwork looking towards some appreciation to re-sell the artwork in a secondary art-market, such as a private dealer or perhaps at auction. If an artist is doing very well in the secondary art-market and their prices are steady increasing, there is less risk in buying that artwork. The investment in an unknown artist is just that for the secondary art-market, an unknown risk.
If you are new at selling your artwork, finding the right price can be a challenge, where you don’t want to give your artwork away, but yet you have to have a reasonable enough price that someone will want buy something. There are a number of sources that can help you with finding comparable prices for comparable artist in their career. If you are represented by a gallery, they will have a very good insight as to what price they will need to ask. A golden rule of thumb is that you can always increase your price, but it is hard to lower your price without some perceived effect on you.
Unlike the photo above with the competing gas stations on opposite corners displaying their respective prices, artists have a lot larger gray area in which their relative pricing is determined.
Best regards, Doug