[Mike Ruslander]

Mark gave me the spark and Janel added the fuel for this discussion topic so here goes. Established pro and novice alike... How did you begin to set prices on your work? How did you base you increases as you became more established? I cringe sometimes on the subject of pricing. I have enough confidence in presentation, but nationally (or internationally) my name doesn't necessarily command top dollar. Where do I base my asking prices? When my work displayed in a gallery (paintings), the owner figured out a price including her percentage, and I just nodded and took the check. I do a lot of side work finishing knives for a company and accept an agreed upon price per piece. Sometimes I get surprised when I ask a price for a knife that I made and the client doesn't blink. Other times I'm underpricing, I feel, just to sell the piece. This is very similar to Mark's questions about talent vs. ethics. I guess this is pricing vs. ethics 101. Feedback is welcomed and requested.

[Mark Strom]

Mike,
Pricing it is the easy part...it is selling it that is hard. That is the real key. Since you ask about pricing...

I just spent the last 2 years re-inventing my business and career as a wood carver. In the process everything was examined including pricing, marketing, clients and work produced. The result was not only a business plan but an eye opening experience about how we end up doing most of the right business moves. We just don't know the correct terminology. I consulted with other artist/crafts people, University business programs, retired business executives and goverment sponsored business programs. I gained a great deal of confidence about my work and the business end of it. I will have to distill this down to its simplest forms to post here.

Let me work on it for a couple hours.

Mark

[Mike Ruslander]

Thanks Mark. Always a pleasure talking to you here. I got a lot out of your last post on commisions. Your topics give me lots of food for thought.
Cheers, Mike

[Mark Strom]

Mike,

There are several ways to price work but I needed a standard hourly wage for a starting point due to the diversity of work that I do.

I figured out how much income I needed to make each month. This included every expense for my business and my personal needs as well. By keeping a record of how many hours I worked each week I was able divide the needed income by the hours worked. This gave me an hourly wage. Of course working the standard hours and making that income was "breaking even point". There has to be a profit or there is no income to expand, buy tools etc.. not to mention that beer after work.

From this point I use a three tier price structure to price different types of work but that basic hourly wage is my foundation. Because of the type of work I do there is also a Market Value that I can compare to on most work.

For smaller and simple commissions (first tier), I take the price of the materials and double that cost, then determine the number of hours to do the work (accurate time records here help with pricing future commissions), add these numbers and then multiply them by a percentage for my profit margin. Using a $50 per hour wage, an example could be one of the rabbit carvings. Material was $3.00 x 2=$6.00, 4hours at $50 per hour= $200, $206 x 25% profit equals $51.50 which makes the finished piece $207.50. The profit margin is based on what you can live with and how much money you want to have to work with. This method is the foundation for all my pricing.

Larger or complex commissions (second tier), these are commissions where the client provides a fair amount of information and direction about what they want. These are priced with the same method as a starting point but here is where I start to charge for creativity. I look at comparable work if there is any. Pricing your work based on the going Market Value is fine if you can produce it within your costs, wage and profit margins. My hourly wage increases as does my profit margin based on the complexity of the work and the degree of creativity involved. There is technical work and there is creative work, one can be taught and one cannot so there is a price difference. Actual design time is figured at $50 per hour as there are drawings to produce and problems to work out. Hourly wage increases by 50% because the commission is a creative project and as such while working there are constant adjustments being made to fit the original concept. I do not accept commissions unless I am given the room to make these creative adjustments. Carving something exactly like the drawing does not give room to correct unforeseen flaws or problems. The profit margin I have chosen remains the same.

The third tier is the totally creative work where an idea is given only and my creativity fills in the rest. This also includes my own work such as the figurative piece posted. Market Value plays a part but the standard base method applies except my hourly wage has doubled from the first tier.

Now there are exceptions and allowances made on tiers two and three but the base price is firm. This tier system was worked out to eliminate guess work. There is a program in the US called SCORE sponsored by the Small Business Administration. It is made up of retired business executives in various fields, my local office advised and helped me problem solve at no charge. Surprisingly my clients helped me with this process. A large number of my clients are very successful business people who I developed relationships with. They advised me on many aspects of my business.

Probably the only time a price structure by a craftsman has ever been publicaly revealed, I know I have searched for years and never seen one. Hope this helps Mike.

Mark

[Leon]

Mark and Mike,

It's clear, it's usefull, it opened my eyes!!!

Thanks!

[Janel]

How do you include the time spent doing paperwork, photography, advertising, correspondence, etc., those things which do not directly get the carving done, but are related to being in the business of doing what we do? I too charge a lot per hour of carving time, but unfortunately, the other things dilute the dollar power of those hours enormously, including preparing and doing shows away from home.

Janel

[Mark Strom]

I want to express my disappointment at the response to this thread. All the technical help, artistic critiques and pats on the back will not help someone to survive in the field or creativity. Pricing, the starting point and stepping stone to all other aspects of the business of survival is asked about and.....the line goes dead silent. There are several possibilities... prices are just being placed on objects without any sound, justifiable, business based reason. Maybe the method used to arrive at a price is mystical and not covered in your standard book on business. There is the concern that something will be revealed to the competition or potential client. Maybe it is just because artist/craftspeople are historically terrible business people. Regardless, something this important and essential to the business of surviving from your work deserves some kind of response. Ok, I am off the soapbox...

Janel,
I quit shows because they were basically very expensive advertising that usually did not pay off until a year later. Rarely did I make enough money at the show to cover the time getting ready for the show much less any time after that. I redirected that money and time into direct marketing so as to avoid galleries and shows altogether. I tried to figure out how to place myself or my work in front of my potential clients without having to pay everyone and their brother.

I admit that all of these things you listed can have the effect you describe. Photography was a huge cost when I did shows, competitions and gallery work. I was paying to much in prep work, entry fees, commission fees to reach my clients and increasing my paper work, phone time...in general carving lost, office work won. My choice was to change my marketing with the intent to lessen my expenses and put more of the profits in my pockets. With the direct marketing I spend more time carving than shuffling paper or banging the keyboard.

Currently I keep track of time spent attending events that place either me or my work in front of potential clients. Time spent creating needed information such as portfolios, ad work etc. is also documented. Time spent meeting with the people that do or can help sell my work is also kept. As I have reworked my business, I need to know how this has effected my selling expense. Once known this time will be added into the needed income and averaged into the work week. As always it is a balancing act and you don't always come out on top. I admit that I too have to eat a portion of those cost but I am trying to control that amount. I do not always hit my profit margin (this is after all what it kills) but it does give me a figure to strive for. As I tell my kids, "If I got paid for every hour I work, I'd be a damn rich man". Sounds like something an old man or dad would say.

Mark

[Patrick Hastings]

I have different approaches, most of which have been covered already, but here goes
First cover the cost of living. You can't work at a loss for long. I need a particular dollar amount to maintain my life and business. So I price basic inventory items accordingly.
My basic work that is added to my inventory includes practice pieces, purpose made inventory, and the occasional work of art. Those classifications are sometimes interchanged depending on who is looking at the work hehe. Since my work has a utility value along with the art value I can sell some items base purely on the utility value. I realize this is not the case for many here on TCP. I may sell some items simply because someone can use it. Completely ignoring how ugly it might be hehe. That puts me in a slightly different light at least for the lower end of my business.
Second are the Commissions. Pricing includes the first strategy as a starting point. Then I add in all the extra communication with the client, which can be substantial. I try to take into account how exotic the requests are as well. It is all a judgment call for me, but in the end I generate a price first then go forward with the work. When a commission turns out to be a work of art then I don't get paid more, but I can market with that accomplishment. When it turns out simply adequate then that is what the customer gets. There are no guarantees. If it does not turn out well at all, I have to do it over and work without profit. Overall, Commissions are not anymore profitable than the inventory the way I have been doing it. They do bring me more business and challenge me more. The best of both worlds is when a client gives me a budget and points me in a direction saying have fun. They are never disappointed with the results and generally get the most out of the experience
Third is art value. When I am doing something on my own for fun or inventory. I sometimes produce something (intentionally or not) in the flow. I definitely add a premium for this. How much is a case by case basis. The more I like it the more I will ask for it.
I do let money influence what I make and how I work. It holds me back artistically to some extent. In a sense I have a day job that lets me be an artist now and again, but my day job lets me practice all the techniques for my art so that part is good. It feels less risky which works for me at this point in my life with the Wife and new baby.
Sorry there is not much in the way of specifics, just a general outline of how I have been going about it.
Regards,
Patrick

[Janel]

I have been away from home for a full week now, and by the time I get home, even longer. These current threads about commissions and pricing are areas which I wish to comment on, but my time is not my own these days, while I am helping family members in need. I also believe that I wrote somewhere about how I have approached my pricing, so when time permits, I have been looking for that link to the archived information. Apologies/excuses over, I do hope and intend to participate more thoughtfully when I am home.

Thank you to you thoughtful contributors. Now to family work. It is not easy to be away from home and work for so long, but family is important and, um, I don't have a "real" job, um, another topic altogether, how other's perceive the artist in the meillieu of everyone else punching a time card at the "real" job and not able to be flexible ... Though this week has been important for me to be the helper.

Janel

[Mike Ruslander]

Janel, no apologies needed. You've been busy. But you got to experience hi speed internet! YAY!
Mark, thank you for you thorough and very helpful pricing tier structure. You, my man, have done your homework!
If anyone feels that they don't want to reveal their personal business, pricing wise, then I'd like to state that please don't feel the need to be specific as far as actual dollar amounts per hour, etc. Mainly, I wanted to find out :
1) How you survive / thrive...
2) How did you make the transition from part time dabbler to full time artist /artisan (if applicable)...
3) Your busines model or plan, as Mark so graciously provided.
Thanks to all who participated, so far.

And on another aside...I'd like to encourage all of you to to provide a link to pics of your work. Thank you.

[tsterling]

Pricing and marketing are several of the main reasons I left the netsuke world. The gallery that handled all of that decided to retire, and the thought of the daunting task of self marketing, schmoozing clients, shows and such (like Janel does) just took all the fun out of it. I find it very difficult to promote myself.

Weirdly, art marketing is about the only real art training I've had. Mark has done a remarkable job of describing the textbook solution and implementation.

The knife world has been much more kind to me, and has solved a lot of the pricing dilemma - there's a lot of comparable work to look at, complete with published price. That typically doesn't cover the business end of it all, and certainly doesn't come anywhere near covering the work of research and idea development. If I calculate that in, I think I'm making about 35 cents an hour. But, then again, if I couldn't sell my work at all, I'd still be doing it, just tripping over more of it around the house. My basic decision is to price it at a level where I'm willing to let it go, and if it doesn't, then I'll still enjoy keeping it. If I'm not satisfied that the work is the best I can do, it never sees the light of day. You can see some of those sitting on my Windowsill of Shame.

Our art baskets are a lot harder to price, but fortunately She-Who-Must-Be-Obeyed takes care of that part.

I very seldom take commissions, and when I do, ONLY if I feel it would still be saleable should the client not want it. In those rare instances, I require 50% up front, but is fully refundable if the client doesn't want the work.

Basically, it all boils down to this: I only make what I want to make. If I don't want to, I don't. Pricing is a very distant secondary consideration. I spent a lot of years and sacrifice to get to this position; it's a tough policy, but it works for me.

[Mark Strom]

Thanks for your comments here. I think that all of the approaches and methods are important. What is of more value is the explanation of why they are used. There is probably a large number of the membership of this forum that would like to ask these questions but are to intimidated to post. There is also not a right method to use as each individual approaches their work and the marketing in a different matter either through choice or a method dictated more by what they produce. It is this very reason that makes pricing so difficult.

The method that I gave is my starting point or base line method. Like Ford and Patrick there are variables that have to be taken into account. Not all my work fits within the framework outlined. I formed alliances with companies that promote my work with their products. I do commissions for their clients, they are the middle men and I never meet the client. I had to have a justifiable method to explain cost differences.

Carving is not what I do but who I am. It defines me. Unfortunately the business world could care less. Banking institutions, architects etc.. want more of an explanation presented in a way that makes "business sense" in a way that they define. I whole heartedly agree that art should never be influenced by financial considerations. What do you do with a commission when you hit the number of allotted hours and you aren't finished or you could take it further making it a better piece? As Ford said, sometimes a quickly done piece can be your masterpiece and the year long job the disaster. The work will always be more important than the money...always.

Mark

[Patrick Hastings]

Mark Strom, on Oct 13 2007, 11:05 AM, said:

What do you do with a commission when you hit the number of allotted hours and you aren't finished or you could take it further making it a better piece? As Ford said, sometimes a quickly done piece can be your masterpiece and the year long job the disaster. The work will always be more important than the money...always.

Mark

Hi Mark,
I often find myself giving more time to a project than I allotted. Generally the extra effort pays off in other ways and I learn that much more about estimating the time something might require in the future. In the eight years that I have been taking commissions for Sword fittings I have managed to reduce the levels of donated labor through experience, but my clients always end up with more time spent on there project than they paid for at least from my perspective. I am comfortable with that, because you are right in that you can't just stop and call it done when it is clearly not finished. More often than not the better pieces actually take less time. when the work just flows there is no fussing with details and wasting of time. Commissions for me often have a lot of specs and that really bogs down the creative process for me. Constantly having to work within specified constraints and working on a very limited canvas does not help either. I would like to make a partial transition to more decorative objects where I can simply create with out working around the functionality of the piece. It would be nice to simply create a scene with no holes in the middle (Tsuba) say on a vase or box lid hehe. I will get to that, in the mean time I am honing my technical skills every day. When I am free to create I don't want my technical skills or lack there of to get in the way. I don't want to THINK at all, just do.
Regards,
patrick

[Phil White]

Hi Mark,

I have been reading the posts with a lot of interest, but have not posted a reply only because it would not be very relevant to any artist that I know.

I have a very unusual job, in that I am paid an anual salary to be a "sculptor", and am provided with an office, a studio, tools, and any materials necessary to do the job.

If I take on any private commissions, I go through a process that is very similar to yours with the potential client. My estimmates are based on an hourly fee, which has grown considerably to match what the market will bear, plus materials and any anticipated cost for tools. I take on few private commissions though, and most are for organizations or businesses. Occasionally, I will do a piece pro-bono as well, just because I support the cause, or am interested. Much of the smaller work that I do starts off on spec, again just out of personal interest, but I usually end up giving it away as a gift, or keeping it.

Not much help to anyone, but there it is.

Phil