While the marketing genius of Sam Walton may no longer be with us, his basic philosophy of providing the lowest prices possible and doing so with good service and a clean environment has put Walmart on top of the retail merchandise heap and made the chain a Wall Street favorite.
Can the artist learn anything from this example? Not really – or at least not directly. The artist does not provide for the basic needs of the general public. As much as we might like to think that everyone needs art to survive, from a marketing point of view it is simply not true. So offering good-quality works of art, even at the lowest prices, is not going to bring large numbers of active buyers to the galleries. What pricing strategy, then, can the artist use?
There are many methods and individual “formulas” of pricing. For purposes here, I want to share some considerations and guidelines that I have observed and that artists, galleries and dealers have shared with me.
First it’s important to ask who buys works of art? The answer is people who place a value on the aesthetic object and who exercise a desire to possess that object. Generally, people who buy art have a certain margin of discretionary income. Although they are certainly not all wealthy, they do have the basic needs of shelter, food and clothing more than adequately met. People who buy art with some frequency and general direction are collectors. Art buyers as a whole are educated and discerning. Discerning does not mean that they have good taste but, rather, that they are able to select what they like and want and to reject the opposite. Art buyers, especially those who purchase works in metal and jewelry are buying to meet an aesthetic and sometimes a real or perceived need. The jewelry buyer is generally buying from a personal and physical point of view – how the piece looks or fits “on me” rather than how the piece will fit into my collection.
So now we have a general idea of who the audience is and why they buy art, especially artworks in metal or jewelry. Let’s consider other factors involved in pricing and how they relate to the buyer. We begin with the material value of the work itself. Arriving at the value of the materials in a work is an easy task which must be done by the artist. It is not, however, terribly relevant to pricing a work of art unless you are dealing with precious metals and gemstones. Also the time spent in producing the work can be recorded or estimated to arrive at the “per hour” cost of a work. (Many artists and galleries totally reject this factor because they consider the idea or content of work an intellectual or emotional entity that has no relation in a quantitative way to the price of the work.) Theoretically, by adding the material cost, the per hour cost and then a percentage of total overhead plus a percentage for profit, you have the wholesale cost of a piece. If the work has some special quality such as a high degree of realism or other type of emotional appeal, an additional amount may be included. The dealer or the gallery must then add their markup, which can range from 50 to 100 percent or more.
After all this has been done, you have the tentative retail price of a work. This tentative price must then be subjected to a psychological or appropriateness test – that is, does the price “fit” the work and the audience that is likely to be exposed to it? Also, is the work priced in the general range of similar works that the gallery or dealer handles? If all this has been done and there is general agreement between the gallery/dealer and the artist, the final price is established. The big question now is will the work sell?
While these are some fundamental and realistic considerations, most artists are not as interested in the basics of retail pricing as they are in creating a price structure for their own work that will make them independent of the logistics of normal marketing. They are interested in raising their prices as high as possible and still have the work sell.
To do this, the following criteria must be met:
1. The quality of the work must be truly unique and outstanding – and judged to be so by the audience that the artist and the gallery/dealer are addressing.
It is not enough for the work simply to be excellent. It must strike that area of response in the art-buying audience that makes it virtually irresistible. A lot of excellent artwork is not financially successful, and unfortunately, some works that are far from excellent sell extremely well.
2. The audience for the work must be addressed and educated.
Not only must the audience become aware of and encounter the work, but it must feel and understand the importance of the work, whether that importance be historical, technical, formal or expressive or some complex combination of factors.
3. The artwork and the artist must be appropriately marketed and promoted.
This may be the major responsibility of the gallery or dealer, but it is also heavily dependent upon how artists present themselves and their work. The direction and development of an artist’s career can be a major factor in attracting buyers and turning them into collectors of that artist’s work. And having a number of collectors regularly buying one’s work is a worthwhile goal.
Robert L. Cardinale is a writer living in Santa Fe, NM.