What’s the anatomy of art pricing?

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Pricing is a major topic on your path to becoming a professional artist. Pricing is a skill – and like any other skill, it improves with practice and experience. It is closely connected to one’s negotiating abilities: where pricing defines and attaches a monetary value to your finished artworks, negotiating defends and (optimally) maintains​ these prices in case of customer interest. Both need to be embraced and become part of your comfort zone. 

The topic of art pricing might not sound important for artists with gallery representations; the further you’re established, the more likely you’ll be able to rely on clearly defined gallery collaborations and sales expectations. Since most artists don’t have gallery representations (and few find one right away), it seems important to understand this topic even if you might one day not have to care about it.


Pricing

Thinking about prices for the very first time is uniquely challenging since you don’t have your own, preexisting price level as a comparison – you’re lacking a basis to progress from. The solution is to research the prices of artworks made by people in your situation. You need to compare yourself to

  • artists who have a similar CV (a graduate with gallery representation vs. someone trying to get into art school),
  • who work in similar media (painting vs. sculpture vs. a performative piece vs. an etching with an edition of 50+3: each medium has its own way of calculating prices), and 
  • who live in the same geography, or at least somewhere with similar economic conditions (consider the differences between LA and Vienna, London and Barcelona, and see how economic conditions can already just differ between urban vs. rural regions).

Things usually progress more straight-forward once an initial price level is defined, since this offers collectors (and yourself) clearer expectations on your work’s price tag. Over the years, artists usually increase their price level gradually and slowly, according to their sales success – until their geographies’ economic ceiling is reached. This steady increase is similar to an employee asking for their yearly or bi-yearly raise: after a while, there simply isn’t any room for salary adaptations apart from inflation compensation. Once one’s region’s economic ceiling is reached, prices mostly increase depending on increased demands: sales quantities influence both your current and your future earnings.


Sales and Visibility

Selling more artworks requires a higher demand, which depends on the artist’s visibility. Visibility is the result of a cumulation of strategies; if working in the studio creates zero visibility (but potentially amazing work), then collaborating with a gallery would already offer more (usually a solo show every other year). If that gallery brings the artist’s works to art fairs, has contacts to other galleries, has international collectors and access to institutions, then the chances for increased visibility rise further. Understand that galleries aren’t required to increase the demand for your work (although certain things, eg. booking an art fair booth, isn’t available to artists directly); artists can obviously do these things on their own, by establishing connections to collectors, gaining access to institutions, etc. They can network locally and internationally, and might even be their best brand ambassadors.
Visibility isn’t just about the physical world (exhibitions, art fairs, etc), but also includes virtual domains: your website can create visibility, as can your newsletter and social media; each of these can be potent tools to increase awareness of your work, if used smartly. The challenge lies in balancing your studio and networking needs, and to further balance it with your partner’s strategies (galleries, art advisors, etc).

Artists can increase the demand for their artworks by making them accessible to new markets. This is usually done by exposing one’s work in such territories; while in theory anyone could self-organize out-of-town or international exhibitions, this rarely generates visibility or sales. The preferred way is to collaborate with international gatekeepers that have established industry contacts – most often art dealers or galleries. The connections to these are usually the result of prior networking efforts (through your own or your galleries’ preexisting connections, non-profits, art fairs or residencies, etc). Instead of singular self-organized events abroad, this has the potential to create an ongoing collaboration through representation, and thus a more stable presence in a new territory.


Going International

Living costs can differ dramatically between countries and cities. Every territory has its own economic condition, and thus economic ceiling – that’s why the only way to ultimately transcend any local price level is to become established internationally. This increases the likelihood of generating more sales, since more people can be aware of your work, and can end up buying it. Understand that your price level doesn’t change simply because you are exhibited elsewhere; your pricing needs to be consistent across all territories.
Yet collaborating with a gallery that resides within a decidedly different economy still has consequences: if that economy is way below your previous one, your work will only cater to the very rich. If the new economy is way above your previous one, a gallery might not see the financial benefit to them, even if your show might sell out. In this case, the gallery might have a strong interest in adapting your price level to their market reality, which in turn can alienate galleries and collectors from previous (lower) economies. If you have a strong base of collectors already, this will lead some of them to sell your work at auctions: they’ll hope to get a return on investment, with the risk of their market not confirming the new economies’ price level. If that happens, it can compromise the new galleries’ intended price level. Yet ignoring the new galleries’ proposal to increase your price level is just as risky, since staying at your previous price level will alienate the new gallery, and most likely results in your show there to be your last one – independently of their appreciation of your work. Drastically changing price levels later in one’s career is challenging.


Art Auctions

The strongest, yet also most volatile sales mode doesn’t happen at studios or galleries, but at art auctions. Depending on their network, auction houses can establish actual supply and demand dynamics, and thus transcend preexisting price levels. Auction houses come in various sizes, each having their own access to collectors; only the best houses will generate the highest bids. Without a strong networking backbone, the best work can remain unsold, or go to the first bidder (usually at half the market’s price level). If this happens too frequently, it becomes a risk to the established price level, which the market obviously doesn’t validate. That’s why auctions ultimately require a lot of networking power (and thus are a consequence of time and/or luck), and remain a good judge whether an artist truly became an (international) brand: the work of an established artist from region A, might not get a good auction result in region A, simply based on a lack of visibility.


Consider reading further art pricing facts, how to price your artwork as a newbie, and the formula to calculate art prices.

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