Figuring out how to price one's work can be a daunting process because of the many, many things to consider. Feelings and philosophy often factor in for many people. For example, some artists feel that the money angle takes away from the artistic integrity of their work. Other artists feel like working unfettered from the trappings of any sort of business work helps their creativity remain free. These philosophies can take many guises: “I just want to make enough money so I can keep buying supplies;” “I could never charge what this is really worth, and expect that someone would buy it at that price;” “I'm just a hobbyist; I don't really need to make money;” “I do this for fun and relaxation, and if I worried about the business angle, all the fun would be sucked right out of it.” But how many times have I also heard someone say they wished they could make a living doing their art? Whenever I hear this statement, I feel a little sad for the person. Are they really doing what they were put on the earth to do? How powerful would we all be collectively if more of us lived our lives using the gifts the creator gave us to our very best ability? Would we treat each other a little nicer because we were happier? Would the cultural “affluenza” so prevalent, so damaging to the planet be alleviated? Would more people feeding their creativity be turned into creative problem solving for the world's increasingly (seemingly!) complex problems? Would the world be a better place, ultimately?
It's important to admit to one's self that if you are saying that the business of art doesn't apply to you because you're only in it for the joy of creating, then why are you selling it? Why not give it away -- that's the most joyful thing you can do! But if you are at any level and selling your work, the
fact of the matter is that a pricing formula that works, i.e., that
results in profit can be achieved – but this requires that the
artist deal with the business of art, and that means figuring out how
to set the price for your goods. Each artist decides for herself, but
if one chooses to ignore the basics of pricing, it is doubtful that
artist is breaking even, and is more likely losing money. I myself
ignore a couple of things, and some leeway exists for putting my head
in the sand on a couple of items, but it's at the “price” of
something else, and I know it. Knowing is important because it allows
for flexibility, balance, AND keeping your creative juices flowing in
a business. And
quite frankly, if you are selling your work at any level, you ARE in
business, no matter how you define your position on the artistic
spectrum between hobbyist and professional. You ignore the pricing
issue at your own peril.
I
am first and foremost an artist, and I think I can be most helpful in
discussing pricing by doing it from that point-of-view. Entire
college degrees in business and pricing exist. I have not had any of
that category of formal education, and my pricing process comes from
my own research and experience – nomenclature may suffer from this
point on if your specialty is business! But if you're an artist,
especially a glass bead artist, most of this will be somewhere on
your radar.
So,
I've heard that a lot of us have an hourly rate – I've heard
anywhere from $1 per minute, or $60 per hour down to about $45 per
hour. But pricing is a factor of TWO things: direct costs and
indirect costs, and it can be difficult to corral those indirect
costs and attach that to the price of of bead. Many glass bead
artists sell spacers and their lower priced beads at a loss because
of this, but then do they make that loss up when they sell other more
complex beads? Probably not, because they only charge a flat hourly
rate and unfortunately pricing is more complicated than that. Take
the example of the lowly spacer bead – you can make sixty of them
in an hour, right? If you sell them at $1 each, then you're making
your hourly rate, right? Yeah, but you're not making a PROFIT, and
we'll get to more on this in a bit. Regardless if you do them 5- or
6-up on a mandrel, you've still got a lot into a single spacer bead
before and after you make it. And that is the same approximate amount
or percentage whether you are making a spacer or a fancy focal. Every
bead you make has a fixed cost attached to it BEFORE your hourly rate
kicks in. The hourly rate AND the fixed costs must somehow be
calculated and factored in to the price if you want to be “in the
black.” And before I go much further I want to clarify what that
means to me as a working artist who pays her bills and makes her
living from her art.
How
to figure out what belongs in the fixed costs category and what
belongs in the hourly rate category, and why bother? Well, it's good
to bother because it makes the difference between profitable and
breaking even, or heaven forbid, operating in the red. And just to
define what profitable means to me: it means I've made enough money
to pay my salary that pays my personal bills such as the mortgage,
the groceries, the maintenance on my car, the doctor bill, new
glasses at the optometrist, etc. Profitable does not mean “in the
black” by a few bucks – that's closer to “breaking even.”
Profitable means you are in the black to the tune of making a living
and paying your bills – business bills AND personal bills.
Profitable means you have enough to live on. And it doesn't really
matter if you are lampworking as a hobby or as a business. Profitable
is profitable.
Things to consider when pricing your beads ...
Before you make a bead you have an area
where you work, which I call my studio and that takes up the spare
room in my house. In my studio, I have furniture dedicated to
facilitating my work from tables and chairs, to bookshelves and
drawers. I use a portion of my electric bill to run everything from
the lights to the kiln to the oxycon to the T.V. Or radio. I pay
business property tax on most of this stuff.
I also have the equipment I use to make
the beads: torch, kiln and digital controller, oxycon, regulators,
propane tanks, hoses, tools, mandrels. I also pay business property
tax on this stuff.
I also have the raw materials from
which I make the beads, and I have the tools and equipment and
materials to finish the beads after I've made them. Business property
tax is a factor on some of this.
I have stuff that helps me sell the
beads I make and keep track of it all for myself and for the various
government entities, such as a computer, digital camera, printer,
office supplies, advertising supplies such as business cards, and
even more furniture to keep all that stuff in. When I sell at a show
I have display material and props, wear and tear on my car, time
spent traveling to and from, setting up, tearing down, and selling
for the hours the show is open. I have hotel, meals, booth and
electric fees, and boarding my dog while I'm away. Business property
tax is a factor on some of this.
Furniture, equipment, tools, cars all
have a lifespan and need to be maintained and replaced from
time-to-time. I need to be profitable enough to buy a new car when
the time comes, or replace an out-dated computer that's crashed, or
replace the relay in the kiln. On and on. If any one of these things
breaks down I am out of business until the situation is rectified.
It's also advantageous to be a good citizen – pay the taxes on your
profits, like business property taxes, and income taxes,
self-employment taxes and so on. Then you can get a car or house loan
when you need one, your credit report looks good if you're trying to
rent a space, and you contribute to your own social security.
Each studio is
unique, but there is commonality: you must calculate your indirect
(non-billable) operating costs and then factor those in ON TOP of
your hourly studio rate. It's easy to ignore the many, many items
within this category in part or in whole when pricing one's work. Too
often pricing is based on what the person doing the pricing perceives
as “what the market will bear” with the idea that the she will
raise her prices once she gets business. My feeling is that you will
get exactly what you aim for. People who purchase based on low prices
only will NOT become loyal customers when you raise your prices; they
will shop around for someone else with prices lower than yours. And
if you are one of those folks presenting the argument that business
stuff like coming up with prices sucks the life right out of your
creative soul, try being unable to sell your work at rock bottom
prices because that's the lowest common denominator of what “the
market will bear” and see if that gives you a boost in your
creativity. Creating is about balance, and in my opinion, if you want
to be successful, one foot needs to remain in the real world.
So by
now you're wondering why you can't just fold all this into one neat
hourly rate, and I return to the lowly spacer as an example. The
unbillable cost of making a spacer is exactly (or almost exactly) the
same as making a fancy focal. It doesn't matter how many of 'em you
can make in an hour if you are selling them for less than their fixed
cost. You are then selling your spacers at a loss, which only works
if you make ALOT of other fancier beads and sell them at a price that
factors in the hundreds of spacers you are selling at a loss. I would
point out that you still need to know how much you are losing on the
spacers and lower end beads to figure out how much extra to charge on
the higher end one. And what about all the other types of beads you
make? If you don't factor in your fixed cost for them, your profit
margin is thinner than you realize. Maybe another way to put it, and
the way I think about it is that before I make any single bead, there
is already a minimum price associated with making the bead, spacer or
focal. If you want to be a successful, profitable artist,
enthusiastic about your artform and your work for years to come, it
behooves you to figure out your fixed costs/overhead, your hourly
rate, and then price your work using this knowledge. No matter how
economically you run your studio, no matter whether you consider your
studio paid for (it's never completely paid for), no matter if you're
doing it for fun, every bead “costs” you something to make it
over and above your hourly rate. Here in the U.S. You cannot make a
spacer that costs less than $1 to make and my assertion is that it's
closer to $2 these days.
The internet is a great place to find specific information that will help you out – start by searching “overhead vs. hourly costs” and that will get you started.
A
final and maybe most important consideration in pricing and cost
might fall under the category, “your money or your life.” By this
I mean that our bodies, our lives are finite as well, and I'm not
getting any younger for sure. For example, lampworkers, especially
beadmakers are particularly vulnerable to several repetitive motion
injuries, not limited to carpel tunnel. Do you really want to spend
the commodity of your finite body and health underselling your beads
at a loss because you don't want to deal with the realistic work of
figuring out accurate pricing? What is the cost of that on your creative psyche? Do you want to race for the top or
race for the bottom? Harder to race for the top, but fewer people
there to compete with. Again I say, you get what you aim for. I hope
to be beadmaking or making stuff for a couple more decades at least, but I can see
that I'm not getting out of this alive so my goal is to be able to
keep at it for as long as possible. Being paid fairly for my work, exchanging money for my life fairly goes a long way toward my longevity.