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