The Price is Right - Or Is it?

By: Charlene Davisphoto

Being an artisan is a balancing act that requires you to be part creative visionary and part shrewd businessperson while representing your handiwork. When customers make a purchase they believe they are buying a piece of art or a product. However, the reality is they are receiving a part of you, your wisdom, and your understanding of what they need or want. So, how does one put a price tag on that?

There are a lot of variables to consider when deciding what to charge for your work or product. In the beginning, you may find yourself on shaky ground trying to find the right pricing strategy. You don’t want to price yourself out of the market, but neither do you want to undercut your work with rock-bottom prices. Customers often attribute value to the cost of an item, but they also like discovering good deals. Ideally, you want customers to give your product a highly perceived value that will increase your profit margin by 30-50 percent.

An artisan’s calculations are typically based on two factors: cost of production and creative value. From a resourceful perspective think about the quality of the product and what intrinsic, artistic value you think customers will place on it. The best place to start is with your competitors to see what they are charging for similar work or products. You will also need to factor in labor, supplies, and materials. If you are operating out of a studio, showing your work in a gallery, or selling items on consignment, make sure to take those expenses into account.

Renee Phillips, Director of Manhattan Arts International (http://www.manhattanarts.com/), says that most emerging artists are clueless about pricing their work. "Your prices should be competitive in the marketplace, not a number you pick out of the air. When determining your prices, be realistic. Has your work passed the test of selling to several buyers outside your coterie of friends and relatives?”

In a brief excerpt of her book, Success Now! For Artists: A Motivational Guide for the Artrepreneur (http://www.manhattanarts.com/ourbooks/sn.htm), Phillips writes that artisans have to make some important decisions, such as: "To whom do you want to sell your work? Do you wish to price your work high and be satisfied with a few, infrequent sales, or would you rather price your work fairly and raise the prices as the value of your work increases? It's easier to raise prices than lower them and it's the selling price that matters, not the asking price.” A more thorough discussion about pricing and many practical strategies can be found throughout the book.

You can also use the industry standards found through different arts and crafts associations and organizations like Artisans Association for Businesses (AAB) or Craft and Hobby Association (CHA).

The bottom line is that in the absence of a crystal ball to predict the future, you need to develop a blueprint to foresee how much you can expect to make over a specified period of time: weeks, months, and even years. Pay attention because these numbers will become your sales goals. Utilizing these financial statements can help you plan for future growth, as well as deal with unanticipated problems that may occur. Most importantly, demonstrating this type of foresight will confirm that you are an astute business owner, in addition to being a creative artisan.
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CHARLENE DAVIS (http://www.thewriteessentials.com/) is a internationally published writer specializing in business, retail, e-commerce, and food. She has written Design and Start an Online Travel Business in a Week, Start Your Own Photography Business, Start Your Own Clothing Store, and How to Sell Clothing, Shoes, & Accessories on eBay, as well as two additional books co-authored with Jacquelyn Lynn, Make BIG Profits on eBay and Start Your Own Senior Services Business (all published by Entrepreneur Press). Charlene wrote this feature article exclusively for the Association of Artisan Businesses (http://www.artisanbusinesses.org/), an organization dedicated to the preservation and promotion of the artisan industry.