I did some major research at the end of last summer about pricing artwork for my Etsy shop. I researched different approaches, watched an extensive Etsy online lab about it, and researched the local and online markets. All of the research made me fairly confused due to the major difference between online prices for art compared to that of my local art community in Portland. In order to remedy this, I decided to give it a go for the Etsy approach. This is the formula they suggest:
Materials + Labor + Expenses + Profit = Wholesale Price (The Price for Stores)
Wholesale Price x 2 = Retail Price (The Price for the Public)
For Further Explanation of this Formula -
http://www.etsy.com/blog/en/2012/a-simple-formula-for-pricing-your-work/
I made up my mind to stay true to this formula no matter how uncomfortable it may be. It meant having respect for my product, process, and time. It also meant being a responsible business owner. I understood the importance of their formula, and I used it, regardless of how I personally felt about the high prices in my shop.
After the past few months of holding those prices in my shop, I did not stop cringing. I thought I would grow comfortable as the process of arriving at the price was just and had integrity. The danger of undermining this price formula is that if a buyer from a store approaches, they are automatically going to ask for about half of what your retail price is. If you decide to do that, you are only going to wreck any chance of financial success as your profit crumbles to being in the red. If you don't seize the opportunity, you miss out on an exciting opportunity to reach a bigger section of the public with your product.
But then I asked myself, do I really have a product that would be for wholesale buyers? Would I want to handmake tons of the same to suit them? My paintings would be easier to mass produce than creating jewelry due to the ability of posters, gliclee prints, and the like. I wouldn't be handmaking them individually. Perhaps my understanding is a bit wrong, but this is the trace of thought that helped me decide to instead use the first part of the formula and omit the wholesale multiplied by two price.
Maybe later I'll have different products to which the Etsy formula would better apply to as they would be more for handmade wholesale, but for now, I can sleep better at night. The price is accurate for my product. It doesn't make me feel silly, foolish, or pompous. It is not undervaluing my work or business plan, nor is it undercutting the prices of other sellers. It simply makes sense for me, and as far as I can tell, those at Etsy would agree with that sentiment.
Materials + Labor + Expenses + Profit = Wholesale Price (The Price for Stores)
Wholesale Price x 2 = Retail Price (The Price for the Public)
For Further Explanation of this Formula -
http://www.etsy.com/blog/en/2012/a-simple-formula-for-pricing-your-work/
I made up my mind to stay true to this formula no matter how uncomfortable it may be. It meant having respect for my product, process, and time. It also meant being a responsible business owner. I understood the importance of their formula, and I used it, regardless of how I personally felt about the high prices in my shop.
After the past few months of holding those prices in my shop, I did not stop cringing. I thought I would grow comfortable as the process of arriving at the price was just and had integrity. The danger of undermining this price formula is that if a buyer from a store approaches, they are automatically going to ask for about half of what your retail price is. If you decide to do that, you are only going to wreck any chance of financial success as your profit crumbles to being in the red. If you don't seize the opportunity, you miss out on an exciting opportunity to reach a bigger section of the public with your product.
But then I asked myself, do I really have a product that would be for wholesale buyers? Would I want to handmake tons of the same to suit them? My paintings would be easier to mass produce than creating jewelry due to the ability of posters, gliclee prints, and the like. I wouldn't be handmaking them individually. Perhaps my understanding is a bit wrong, but this is the trace of thought that helped me decide to instead use the first part of the formula and omit the wholesale multiplied by two price.
Maybe later I'll have different products to which the Etsy formula would better apply to as they would be more for handmade wholesale, but for now, I can sleep better at night. The price is accurate for my product. It doesn't make me feel silly, foolish, or pompous. It is not undervaluing my work or business plan, nor is it undercutting the prices of other sellers. It simply makes sense for me, and as far as I can tell, those at Etsy would agree with that sentiment.
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