Does Discounting Hurt Your Art Business?

Is your work worth full price? Then why are you accepting less?

 

Letters Spelling Big Sale As Symbol for Discounts And Promotions

 

Pricing your work for profitability means that you are calculating exactly what the wholesale or retail price should be to allow you to pay for your materials, overhead, labor costs and add that all-important factor: profit. When you reduce your prices, your profit suffers. This means that the income you count on to actually grow your small business has been diminished, and that hurts you as an entrepreneur.

Have you discounted your prices? Often, this happens out of fear. Artists don’t always have confidence in the prices they have set, or are afraid that sales will be lacking, and so they are willing to reduce them, believing it will increase interest from buyers.

The truth that it is rarely about price. When you offer a compelling collection of work that is desirable and saleable, and when you determine your target audience which can afford the prices you have set, go forward with them. It is far better to add value to your offering than to resort to lowering the price.

What message does discounting send to the customer?

  • That you are willing to take less now, so you will probably do so again. They may then offer even less than your discount, hoping you will bend further. This not only undermines your profits, but it doesn’t make you feel good about making the sale.
  • That your regular price is actually the discounted price. Then, they will only buy when you offer a “sale price.” That permanently reduces the amount of profits you earn.
  • That you are not clear what your prices should be, which is a sure sign of an amateur. People want to buy from professionals, and as a professional artist, you should be able to defend your prices, and speak about the benefits to the customer.
  • It tells previous customers who paid full price that they missed out on the “deal” that everyone is now getting. Imagine how a collector of your limited editions would feel knowing that they didn’t purchase something that was worth more because of its limited nature. They may end up feeling they should have waited longer to get a discount.

Should you ever offer less than full price?

  • You may be discontinuing an item from your collection, and want to price it lower to sell off inventory at retail. (Don’t include discontinued items in wholesale orders unless the customer specifically asks for that design. Otherwise, you are passing on slow sellers which will sit on their shelves and discourage reorders.)
  • You may want to offer a trade show special such as a baker’s dozen, or free shipping, to drive more orders during a specific period. Create these specials with a full understanding of your costs and know your bottom line.
  • If you have repeat collectors of your art, it is sometimes appropriate to give a courtesy discount, of perhaps 10% – this is frequently done by art galleries with good customers who enjoy that type of special relationship. If you plan to do this for your best customers, write this discount into your pricing formula.

 

Have you ever discounted your work? What was the result? What did you learn?

 

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Comments

  1. I strongly agree with many points in this article and glad to see that this discussion surfaced before the holiday season. While we live in a discount society, selling one of a kind or limited production craft is not the same as selling manufactured goods. Your competitive edge is about offering unique value to your customer. Competing with price is a downward spiral that the craft person can not afford.
    Harriete Estel Berman

    • Well said, Harriete. Although it is a temptation to many, discounting hurts everyone in the craft community. There are many ways to establish the value of your handmade goods and make shopping at full price a pleasure.

  2. I recently had someone offer $500 for a piece I had marked $550. I tried to tactfully decline his offer even though I was insulted. I explained why it was that price. He said he had bought my work in the past. He wound up buying it and also took a small $50 piece. I said to him “And this is a gift to you from me.” He was very pleased and I didn’t feel demeaned as I would have if I had taken $50 off the other piece. The last thing he said as he walked out of my booth was “I’ll be back” and I believe he will. So I was able to turn around a bad sale situation into a pleasant one for both of us and set up the possibility for future sales. Note that I often make and give my production pieces as gifts to customers and people who I perceive have a need. Years ago I gave one to a woman and her daughter who spent a long time admiring my work but clearly couldn’t afford anything. They were deeply touched and were overjoyed to tears by that simple kindness. For me it’s so much more than just a sale it’s connecting with and acknowledging the person who admires my work .

    • What a wonderful story, Gayle – it speaks to how we honor one another by valuing their work, talent and time – and their price. Your actions towards the woman and her daughter may not have earned you any money, but that connection you spoke about with be with you forever.

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