Understanding the Price of Fine Art

It's not uncommon for people to visit art exhibitions, art festivals, or even artist websites, and find paintings that are seemingly priced high.  This is often the case for novice art observers or those who don't experience fine art often enough.  With a market for every price, pricing art is not an easy task as it depends on a number of different things.  There is no price structure or formula written in stone, which can make it difficult for an artist to determine the value of his/her time and work and is why art prices vary from artist to artist.  

 

I can tell you---what the asking price is for a painting, is NOT what the artist pockets if the work is sold.  There are overheads, material costs,  commissions, and possibly a number of other expenses that need to be paid before an artist can take a profit.  With a painting priced at $1000, the artist only gets a fraction.  The serious artist should manage his/her art as a business.  As with any business, it's never a good practice to charge too low where you don't break even, that creates a loss.  We'll take a look at what might make up the price of a painting so the next time you walk into an art exhibit, you'll get a good understanding as to why a work of art is priced the way it is.  What seems high, may actually be reasonable.

 

Now, before I break down expenses and what goes into a painting, there is some information that I feel needs to be addressed.  While anyone who creates art can categorize themselves as artists, there are subcategories.  My fellow artists---like it, or not, according to the IRS, you are categorized as either a professional (bona fide business) or what they consider a hobbyist.  Basically the difference is whether or not you create art as a source of full or partial income and are able to claim any deductions.  Full and partial, meaning whether you are a full-time (your income entirely comes from your art business; being sales, teaching classes or workshops, etc.) or part-time (your art is not your primary source of income).  Hobbyists are often seen as artists who create for very little or no profit, hence the word "hobby" meaning recreation.  

The reason I address this information, is to give you a better perspective on the artist you may be investing in.  Occasionally people attend events and ask questions or comment on prices---"Why are the prices that high?  I have a nephew or a friend who is an artist who can paint me something like that for $100."  Well be that as it may, regardless of talent or skill, your nephew or friend probably doesn't seek art in a professional manner as a career choice. Artists who create art as a profession have invested, or are investing, a great deal of time and study in honing their skills, marketing their work, and have a number of expenses and overheads that go into their craft.  Yes, I could do a portrait for $50.  But if I pay myself $20-$25 per hour, and spend 3 or more hours on it, where is my profit?  All expenses have to be paid first. It's a business venture that includes marketing, management, finance, and accounting.

 

Here is a list of what might go into a price of a painting and other expenses an artist might have.

• Time---the amount of time it takes to create a painting.  This may include an hourly wage. How much the artist values his/her time.
• Size---some artists may not use an hourly wage.  Instead price their work using a size-based pricing method either by square inch (h x w) or by linear inch (h + w).
• Subject matter---the complexity of the subject matter might be considered.  The human form is said to be the most difficult to interpret versus a house or an landscape.  Artists who paint different subjects might have different prices for their work---a portrait might be priced higher than a landscape painting of the same size.  Having additional portraits in a commissioned painting can cost extra.  This is found often with  portrait artists.
• Materials---materials used to create the artwork (canvas, paper, primer, paint, pastel, framing, etc.).  Some mediums are more costly than others, such as oil vs pencil.  Quality brand names cost more as well, and good framing is never cheap.  Those who pursue art as a profession tend to use good quality materials.  These costs are factored into the price so that the artist gets back what he/she spent.
• Overheads---studio/office rent and utilities, or other.  Whether at home or in a commercial space, a small percentage may be included in the price so bills can be paid.  Those of us with a home studio/office may or may not bother with calculating the expense, but those paying rent elsewhere for creative space do need to factor in the overheads in order to keep it.  
• Sales commissions---if the work is sold from a gallery, festival, or other venue/event, a commission may be collected.  Commissions can range from 25% - 50%.  High commissions tend to create high price tags so that the artist is still compensated and doesn't cut into his/her profit margin.  Commissions need to be considered.
• Sales taxes---the government always wants their cut.
• Travel---traveling artists tend to keep track of traveling costs (food, gas, lodging).  Whether it's for an exhibit, painting competition, or delivering art to a clients home/office, business traveling costs need to be recorded.
• Market---local, regional, national, or international.  The market an artist is active and sells his/her work in may affect the price.  While local markets can limit an artists price range, involvement in various markets allows the artist to broaden it.  A specific target market also plays a role---if  you find an artists work is too high, you probably are not in his/her target market.
• Established/credentials---artists have reputations to keep.  Prices may reflect how well established the artist is in a market and what credentials they have (awards, publications, juried/invitational exhibitions, etc.).  Some artists establish their name quickly, while others take more time.  Some artists don't use credentials.
• Supply and Demand---of course supply and demand can play a role. 

• Other art related expenses an artist might have---insurance, professional expenses like memberships to art organizations, entry fees for shows and competitions, internet/website, educational (school loans, books, magazines, videos, workshops), marketing materials and advertising, studio equipment and supplies, office equipment and supplies, depreciation on equipment.

 

As you can see, there are many expenses an artist might acquire---and these are just art related.  An artist still has other (non-business) expenses that we all live with throughout life.  Depending on how involved one is with his/her art, an artist may only have a few or most of these.  There's more to the price than what you see visually.  Another thing you have to realize, an artist rarely makes constant sales on a day-to-day, or even a weekly basis.  All too often, dollars have to be stretched between sales, which is why artists find other means to make money (teaching classes or workshops, entering competitions to win cash prizes, or other).  I hope this blog entry gives you some understanding.

Ask yourself this;  If you had such a list, and you spend a great amount of money, time, practice and study into the work you do---What would you charge for an original painting?