One of the most difficult challenges for an artist just beginning to place his or her art for sale is determining a price for each piece. It can seem so arbitrary, and that's how many choose to approach it, with very mixed results. If you price it too low, potential buyers won't take you seriously because a low-ball price gives them the impression that you don't take your own work seriously enough to sell it for what it's worth. If you price it too high it becomes unaffordable to all but the most affluent art buyers. Finding a happy medium means developing a reliable formula for pricing.
Step one: determine the cost of materials
This would be any materials used or purchased for the piece. In the case of, say, canvas, that's an easy one. However for paint you may have to do a little estimating. If you bought any new materials for the piece, go ahead an add them to the figure. Any moderately-priced tools that you may have purchased for this piece may also be added. any expensive equipment (such as a fancy new easel) should be left off unless you purchased it solely for this piece, and don't expect to use it again. Framing and matting costs, of course, should also be included. Now set this materials figure aside, and continue to...
Step two: your hourly wage
Welcome to the world of the working artist! you are your own boss, but if it's ever gonna work you also need to understand that you are your own employee too, and you need to decide how much to pay yourself. You will need to figure in your education (both formal and otherwise), your experience, and any skill or meticulous specialty above and beyond those. This can be a VERY arbitrary figure to come by, but one thing is for sure: NEVER pay yourself less than minimum wage. you are a skilled craftsperson, not some Wal-mart cashier. Okay, maybe in your day job you are a Wal-mart cashier, but unless that's all you ever want to be then you need to value your talent well above that. For now let's start at a temporary figure of 20/hour, and move on to step three.
Step 3: your time-card
Remember when I said you're your own employee? I wasn't kidding. For your hourly wage to be of use, you must keep track of your hours. This need not be as hard as it sounds. When you sit down to paint, draw or sculpt, simply jot down the time. When you're done for the time being, jot down that time as well (as a painter I often like to use the back of the canvas for this). When you resume, mark the time, and finally when you're done add up the hours. Go ahead and give yourself a paid lunch, just one of the perks. But is that really all the time you spent on the piece? No, probably not. If you're like most of us, you probably did some preliminary sketches, some research, maybe took in a life drawing session (if so, the cost of which should be added in with your materials expenses), etc. And you may not have bothered to keep track of how much time you spent on each of those things. If that's the case, feel free to estimate as best you can, but those were all essential processes in the creation of your piece, and thus should be reflected on your time-card.
Step 4: the subtotal
alright, now you've finished your piece and it's time to find the price. Add up your hours first, and multiply them by your hourly rate (use the 20/hour I mentioned earlier if you don't know what your hourly should be). Does this price seem low? does it seem high? in either case this may mean that you need to adjust your hourly rate. Raise or lower your hourly rate and multiply that new number by the hours. If this new price seems about right, then you have found your hourly rate. Now add the materials cost. This is your sub-total, the amount of money you want to see from the final sale of the piece.
Step 5: The total
Now that the subtotal is figured out it's time to find the retail price. How are you planning on selling it? Online? In a gallery? Taking your chances on a cafe wall? There are usually costs associated with that. For online sales there is the cost of shipping. figure that out, add that to price, and advertise free-shipping. online buyers love free shipping. But the selling site and paypal may both take a percentage as well (Etsy takes a modest 3.5%). Raise the price to accommodate that. That your final retail price for online buyers.
For gallery shows the cost will usually be a big percentage. Galleries can often take 30%, which in and of itself is not a bad thing, as it means they are motivated to sell your work. but you should raise your retail price to accommodate that percentage. Any major transportation expenses should also be included (a show out-of-state, say).
And finally, the restaurant/cafe/bar show. Sales are rare because, frankly, people don't go to those places to buy art. To most of the clientele your art is just a very expensive impulse item. But the standard offer is that they take no percentage, and will handle the transaction for you (which they fully do not expect to happen). But if you sell a piece you may find that you failed to read the fine print: for cash or check transactions they will take no percentage. but nobody buys high-dollar items with cash or check anymore. credit card purchases, on the other hand, show up on their financial statements, and thus taxes and credit card fees apply to them, which they will take out of the money they owe you, cause heaven forbid they be liable for taxes and card fees on something they sell. neat trick, huh? well, you'd better raise the price to accommodate that (30%).
OPTIONAL: you may wish to round your price up to a nice even number that is attractive to buyers.
Printmakers and Photographers:
Prints and photographs don't have much in the way of hourly work per print, so you will want to instead calculate the hours you spent preparing a run, and that (plus materials) is how much you will want to recoup from sales. Be careful, because every last print probably won't sell. so try the best you can to figure out how many will sell, and divide the price for the entire run by that. Now you have arrived at a fair price-per-unit for your prints.
Note: I dabble in printmaking, and while I consider myself a decent photographer, I have not tried my hand at selling photos. Therefore, if anyone has more experience than I do in selling these, please feel free to offer better pricing models for those.
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