Recently, I have been watching several prominent members of the Steampunk World worried about how they can be artists and still manage to make it by. When talking to them about their art and how much they charge for it, it was unsurprising that they almost all charge very little above the materials cost because they feel guilty about charging people money.
I would like to take a few moments to talk about Monetizing your Art, Capitalism, and what it really means. When you decide to do something for a living, it means that your own well-being and that of your family relies solely on your ability to work your art as a business. Many artists have a hard time doing this, either because they are more focused on the art (as honestly it should be) or they are diametrically opposed to people that charge too much money for bad work. What it comes down to is a guilt complex of "I shouldn't charge a lot because I only paid X and therefore should only get Y because most retail stores only get Z%.
Now remember, Z% markup is based on the cost of the product including labour. Most artists forget the time and effort they put into things costs them money as well; the electricity, water and food that they consume. There is also lost personal time working on a project for which most professional artists get paid between 15 and 30 US Dollars per hour. I once saw a beautiful piece of work that took ten or fifteen hours to make go for fifty dollars, a price that doesn't even cover the cost of labour. While the piece sold, and quickly, the artist lost money on the product.
So I'm going to provide everyone with a simple formula that has worked for my family business.
The cost of a product of value should equal the cost of the materials plus the labour. Depending on what you do and how long it takes, charge labour based on materials. So if you make garments, as my wife Rachel does, perhaps Materials x2 for labour would suffice. For example, if the cloth costs $5 then the labour costs $10 and your total cost is $15 for the garment. On the other hand if you hand make a gas mask that actually works that costs $5 in materials, it may be better to charge materials x5 or a total of $30 for cost. Yes I know these amounts are dreadfully and impossibly low but work with me; I didn't want to find my calculator.
Now remember, it is going to take some time to sell this product, and the longer it sits on a shelf, the more money you lose in storage. Storage is an actual business expense, even when you store product inside of your own domicile. Check your nation's tax collection agency for more details about this. In the United States, check: http://www.irs.gov/publications/p535/ch01.html#en_US_2010_publink1000208606
Therefore you must mark it up! This does not mean you need to have a profit of 500% like diamond sellers (unless you are a diamond seller) nor a profit of only 4 cents on the dollar like petrol dealers (That's right people oil companies make about four cents on the dollar or 9 cents per gallon, who do you think gets the rest?). An appropriate markup is based on the type of good you make. You can always mark it down later if it doesn't sell.
If you make an item that is easily mass produced even by hand, such as most small leather goods or certain pieces of jewelry, an average of 23-33% markup is standard. Believe it or not, that's what Wal-mart makes, it's the industry standard. So, your $15 cost item is now worth between $20 and $25; final price will depend on if you want to scalp your competition by undercutting their prices or you are the only one selling it. If you're a specialist that does long and convoluted projects that take months, do not feel ashamed to mark it up by as much as 200%.
In conclusion, when selling your art, think of it as a business and not just a hobby. Make sure you are charging enough for your own labour. Your customer is purchasing your product because they either can't, or won't, produce it themselves. When you place a price on your product ask yourself if you're using the Guilt Formula or the Business Formula. The Business Formula is more profitable and will help provide you with more funds to continue your work, like a miniature plasma generator for that Gauss Rifle. Or a Lawn Gnome to carry it...
Lawn Gnomes with rail rifles, thats a nice touch. :D
ReplyDeletealso, some people, especially when dealing internationally (im sure there are more than afew european and Aussie/Zealander steampunkers) that dont account for fluctuating values between currencies, especially since (unfortunately) the u$ dollar is thusfar seemingly on its way out.
One may consider listing a product's price according to the value of a Euro or a Yen, or other currency type.
Although the US Dollar has dropped in recent years due to the international recession, it has been making a strong showing as of late and is still the currency of choice for securing debts and international trade. The primary reason is that the most often used commodity, Crude Oil, is still calculated in US Dollars and is pegged to its value.
ReplyDeleteOnce I was exhibiting at a high-end show, probably the biggest show in the country for that style of work. Most of the other craftsbeings in the room had exhibited there in previous years, and by then we knew each other and what we all did.
ReplyDeleteOne new guy, also making furniture, announced "If I make my money back from materials, I'm happy." (He apparently had a sizable retirement income.)
He seemed quite puzzled when the rest of us treated him as if he had just announced that he frequently had sexual relations with dogs. We just weren't interested in hearing his opinions on anything after that.
The point is, when you price things in an idiotic manner you totally devalue the craft, and teach the public that craft is worthless. You stick a knife in the back of every person trying to earn a living at it. This is a very different thing than honest competition.
When you finally get bored with working for free, you will wander off to do something else, but there is an endless line of other brainless yobs eager to take your place, wooed by the tool-sellers and etsy's of this world.
If you love (insert name of craft or art here), why are you working to destroy it? You force standards down, and keep people from building their skills because they cannot get a fair price for their work. That's what you should be feeling guilty about!
If you don't care about the money, why operate a pretend business? Give your stuff away as gifts, or better yet, donate it to a nonprofit so they can use it to raise funds.