RedDot Podcast | Episode 012 | Supply, Demand, and Art Pricing

In this week’s episode we’ll explore how the laws of supply and demand effect the art market and art pricing. Will lowering prices increase your sales? What should you do when your art is selling faster than you can produce it? When are you justified in raising your prices? Find out in this week’s podcast! Read more about the how to sell your art and understand the art market by visiting our blog at www.reddotblog.com

 

 

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Share Your Thoughts and Experiences on Supply, Demand, and Pricing

Leave your comments below about your experiences with supply, demand, and pricing.

Starving to Successful

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About the Author: Jason Horejs

Jason Horejs is the Owner of Xanadu Gallery, author of best selling books "Starving" to Successful & How to Sell Art , publisher of reddotblog.com, and founder of ARTsala. Jason has helped thousands of artists prepare themselves to more effectively market their work, build relationships with galleries and collectors, and turn their artistic passion into a viable business. Connect with Jason on Facebook

34 Comments

  1. Great podcast today! My biggest challenge is what you mentioned in your podcast today…finding the right market for my work! After many different pricing strategies tried and analyzed, I am comfortable with the current pricing strategy I have, but still need exposure to make sales. It also always seems that an artists’ home market is more difficult to sell in, that the price points we decide on are “too high” for our home market, even though they might be considered “low” elsewhere. It’s an interesting situation, as I hear the same thing from other artists all around the nation. If everybody’s home market can’t bear their prices, then where are these “magic” markets that can?? Even so, I am holding firm with my current strategy and working to find better venues for my art in order to reach the right customer base.

    1. Excellent statement. I agree my home market is lower than outlying places I’ve been looking at, so if my prices are too low for them, what do I do? I think I have to find a way to be successful in the outlying market and then perhaps the local market will appreciate the those prices more. But not sure.

    2. You bring up excellent points Jennifer – it’s a version of the grass always being greener. As an artist develops a consistent pricing strategy, she/he can stop second-guessing and begin focussing on increased exposure.
      I do know artists who are selling very well in their local markets, but it’s an issue of how strong the market is or isn’t, not a question of whether it’s local or not. If the local market doesn’t seem to sustain price points that match what you’re asking for your work, target markets that do.

  2. Great podcast, Jason! My local market is quite conservative with their purse strings. All my work is float mounted. I use inner frame dimensions to come up with prices. Locally, I have hit a wall. The market will not purchase over a certain pricepoint, and one gallery in an upscale area, had me LOWER my prices. I have decided to focus on online sales for the future. I will have to raise my originals price to accommodate prints. If I don’t, they will be nearly identical. Goodbye local market for originals. I plan to keep prints and other forms such as boxed card sets for that instead. Just another artist with too much inventory and not enough market. I know I need to weed out style and subject matter to really succeed, but all have sold equally in the past. Making that decision is difficult. Creating small scale art seems to be a hindrance as well. I just broke the 24×36 barrier last year after a studio expansion was complete. Lastly, I have finally devised a way to bridge a style gap between my two mediums, watercolor and acrylic. Since I haven’t sold any online, a dramatic price jump to accommodate prints shouldn’t be detrimental.

    1. Thanks Helena – There certainly is a market for prints online, but it’s a very crowded marketplace. Before giving up on selling your originals, I would urge you to present your work in other markets, or at least continue trying on both fronts; originals and prints.

  3. Excellent podcast. I have gradually increased my prices, without reducing sales. I create art jewelry and mixed media pieces.The key I’ve found is to have several price points available. Many want the centerpiece of a collection, but feel they can’t afford it. They tend to buy the “gateway” pieces, and many times an “add on” piece to achieve the look. The result is sales that are about half the main centerpiece, but its the centerpiece that draws collectors in, over and over again. I’m now working on upgrading my website and social media presence, areas in which I have been deficient and neglectful!

    1. Excellent point – offering a variety of price points is a powerful strategy and one that we pursue in the gallery. Because art pricing is so arbitrary it’s helpful for a potential buyer to be able to compare the art they are interested in to something else that is at a higher price point.
      It’s an interesting dynamic, because all of the prices are somewhat arbitrary. I’ve seen many buyers justify a purchase by saying to themselves that they aren’t sure if a piece is worth what the artist is asking, but at least it’s less expensive than the piece they just saw in the gallery next door.

  4. Jason, intriguing subject. Just shared the link on my Facebook profile. a lot of good info.
    I’m in the process of beefing up my supply/inventory right now! So that I have enough work to enter the market again with a new body of work.

    I do have a question for you: For my new pieces, should I paint a variety of sizes of work, or a body of work with similar sizes? If the answer is similar sizes, do you have any ideas in which sized works buyers are preferring in today’s market? Ive been painting small works to sell unframed from my website, but I’m wondering if it would be a better move to paint larger works for potential galleries and shows.

    1. Hi Lori – if it make sense with the work you are creating, I would recommend a variety of sizes. Having some variety creates options for both galleries and collectors. I tend to sell better for artists who have a range of sizes. I can’t say that particular sizes sell better because we sell artwork across a variety of sizes.

  5. I liked the podcast, as pricing artwork is always a challenge. I am in a new gallery with 6 other artists. My prices might be a bit low, but I’m not sure. During the opening of this new gallery I sold 4 original oil paintings, which is great, but now I am faced with making more to keep the inventory fresh. Monthly I am selling 0-1 original pieces of work, so I am reluctant to raise prices. I would appreciate input. Thanks.

    1. First, congratulations on the new gallery and the sales! I’m curious about how long you’ve been with the gallery. It sounds like it’s been at least a few months as you already have an idea of your monthly sales rate. I wouldn’t raise prices if it has been less than a year that you’ve been showing with the gallery. Examining and raising prices once a year works for most artists. There can be exceptions if sales are very strong, like the artist I mentioned in the podcast, but typically an annual review is sufficient.
      In this case you had strong sales right out of the gate, but that’s not unusual. You want a long-term sense of how well your work will sell before raising the value.

  6. Nice stories, Jason!
    But I’d like to know what are the “intangibles” that are driving the sales of this artist who sells everything. What’s the subject matter? What size? Medium? Style? What Story are the paintings telling? Is the artist’s personal story part of what drives the sales? What do the buyers usually say the art makes them feel?

    And perhaps the next podcast could be more on how to FIND the markets where an artist might be received with open wallets…

    1. Stay tuned for future podcasts where I will touch on all of this. I mentioned several reasons that I didn’t share the names or works of the artists I talked about in the podcast, but another reason is that I don’t want you to think that you should change your work to try to do something like what this artist is doing. Still, it will be very valuable to talk about what drives sales and what collectors say about artwork, so count on a podcast based on your comments in the near future.

  7. Jason, great advice about keeping up with the demand. Great podcast! At the gallery where I sell the most, I found that sales 2″ gallery-wrapped canvases sold faster than framed pieces at the same price point for size. That was good for me, as a well-made frame can be pricey on some sizes. I have also raised most prices about 25% over the past year and am still selling well. Thanks so much for sharing your experiences with all of us.

  8. Years ago, my wife and I signed up for an entrepreneurship class. (i was interested in marketing my design skills). the upshot was that I formed a proprietorship “Ampersand’s Knot Designs”. Our first “product” was a woven blanket that sowed our lake and it’s various historic and sports activities. It needed to be produced by a commercial weaving company. We did the Supply/Demand model and found that with production costs, we would make no more than a few dollars on each unit. Most of the company’s clients were non-profits so a few dollars/unit was satisfactory. We worked very hard to move the blankets. I was naive in thinking this was somehow ever going to be profitable. Ampersand’s Knot was put to bed years ago. People still know me as that, so the name at least was catchy.
    Art work I’m finding is a whole other activity and yet, when I went to figure out the pricing B.J. [Before Jason] all those cost accounting things came immediately to mind including estimated hours and gig rates. It shows the futility of trying to monetize in a logical way what is essentially an emotional investment. You alluded to this in the pod-cast.
    I feel that your idea of doing the research and placing yourself somewhere near middle is a wise idea, and while I would like to command big prices, I have no illusions or delusions about my work. But, the task of pricing remains, and I confess that, a) I have no idea how my prospective collectors think or live, and b) how I should go about positioning myself in the art market and c) just how much market there might be for me and my situation as an artist taking on a full-time art career as a retired art educator. But I’m up for the adventure.

  9. ~ YES – As this started out. It’s a ‘BIG ‘ mystery pricing and selling ‘Art’ and I’ve never figured it out as far as ‘supply and demand’ . “IF” there was a way I’d sell my whole inventory – yesterday or maybe tomorrow. The word ‘NEED ‘ says it all as there’s many reason a work of Art is sold/purchased and ‘yes’ – it is complex ~ ~ ~ http://www.facebook.com/carole.orr.50

  10. Thank you, Jason, for a much in demand topic. The question I have is, when you are referring to the middle range,…what size range does this relate to? The last artist you referenced started at 2400.00 and went up to a 3200.00 range. In this respect…size does matter…😏…but in all seriousness, can you put the price into perspective with the size range…?

    Thank you.

  11. The timing of this podcast couldn’t have been better. I’ve been facing this issue head on this past year. I had my landscapes in a gallery that had a dynamic owner who could sell my art right and left (doesn’t happen everywhere). One collection sold out. Ok, it wasn’t so funny at the time – but I had a November show scheduled and the owner encouraged me to bring down paintings as I finished them. “WONDERFUL”!! I thought. They can be at the gallery rather than hanging around my studio. Well – collectors were coming in buying these new large paintings. So three weeks before the show the owner asked me “what are you bringing in for the show?” We laugh now – but I had to really hustle to fill those walls – and we both learned our lesson.

    Yes, it’s a goal to have more demand than supply – but it can put a lot of pressure on an artist to produce – even when building a home/studio out of state and getting a current home ready to sell. It’s been a tough decision to temporarily pull out of some galleries to weather the moves – right when sales were steady.

    You are right. raising prices doesn’t necessarily slow sales. The venue of my next show (2 artist) has a high end clientele in Seattle and the manager told ME what prices I needed to be at – which thankfully matched my higher prices. They have a good sense of their collector base. It made the price jump decision for me. Their contract even stipulated that my pricing in other galleries had to match their pricing.

    I’d give anything to have this dynamic called “pricing” more of a science than an art form.

  12. I have a supply problem, not because I sell so much inventory, but because I have not yet found successful enough sales channels, so nearly all my time is spent planning, applying for, and showing at art fairs that are lukewarm at best as far as sales. I also have to travel more and farther to find new customers, which costs more time, money, and energy. I feel like I am trapped running on a hamster wheel. If I stop the shows, the sales stop, because I have not found a website or gallery that works for me yet. But, as I keep spending all my time on the shows, I don’t have the time or most especially the energy to take my work to another level where I might get into better shows or better galleries.

    1. I’m in the same situation. If I travel further to the more lucrative art fairs, the entrance fee is significantly more, as well as travel expenses and wear and tear on my body! I’ve decided, after the summer fairs have ended, to stay local and see what happens.

  13. Thank you for another great podcast Jason… I have been following your advice for some time now & it has been hugely beneficial to me… I have an Art-Exhibition soon to start at Google European Headquarters in Dublin! I’m hoping that demand for my Artwork will increase from there, below is a link to it:

    https://www.facebook.com/artcraftireland/photos/a.1146207835429414.1073741830.1129103730473158/1544325365617657/?type=3&theater

    Demand for my work has been increasing, along with my pricepoints gradually since a week before Christmas 2016…

  14. When I started marketing my paintings five years ago I studied your marketing advice as well as Robert Genn’s and Barney Davey’s. I am an animal portrait artist. I tried to shoot for the middle price range of my genre and adjusted my per square inch pricing by using a slightly higher number for very small work and lower number for very large pieces thinking that if I stayed with the same end to end it would make 6 x 6 paintings prohibitive and I was uncomfortable asking the higher prices for big paintings. This worked well for me so far as I have had steady sales (not great mind you, but sales!) and as I actually started out with prices a bit higher than I was comfortable with, I have not raised them much, but have grown into them, I think, as my work has improved. I’m going to a show next weekend where my sales have been better and better each year (this is my fifth year at this show). I have three large pieces which I am getting framed with the best I can afford and finally feel comfortable using my highest price point (previously reserved for a narrow mid-range size) onto which I am adding the cost of the framing. This will jump up my prices for this show a good deal on the large works, but (from past years observation) will bring my work more in line with fellow exhibitors and I do not think at all out of line with prices I see elsewhere. It will be interesting to see the response to these higher prices.

  15. Interesting podcast. If someone feels that the lower price means that the product is inferior it shows they have no judgement on the qualities that make art better. For example a botanical that may take a long time to produce but would be priced out of the market if priced by the hour is sold for less then they should rather feel they are getting a bargain. I can see them thinking it won’t be a good investment because they don’t “know” if the art will appreciate, but for enjoyment I can’t see paying less as being a barrier. However I have heard of people that priced their work a lot higher and it was perceived as “better” and sold more. I take your point that a low price can make a purchaser uncomfortable and question the experience or quality of their work. If you sell a modest amount and have established prices which might be low how can one suddenly jump prices.
    I have had some sales locally and people love the work but sales are slow. My prices are quite modest. ( $150 -600) I have quite an inventory but the work has been out on a number of occasions. To only have new work out is not reducing my present inventory. Framing is expensive and boosts the price just for the work but not for my art itself. I.e. the profit is low.

    Is it better to have a higher price on original but produce prints for “bread and Butter” sales.
    I admit I do need to do more marketing and find those who aren’t already downsizing! People seem to be willing to buy ceramics and decorative pieces which can be switched or put away rather than 2D artwork and rotate paintings. They say they don’t have room for more on their walls.

  16. Adding to how illusive it all is, many years ago, I was frustrated that my paintings weren’t selling at $2,500. In retaliation, I decided that if my work wasn’t selling at $2,500 I might as well “not” sell it for $5,000. I doubled my prices and my next show almost sold out. I’ve been selling well ever since. Of course, all the other intangibles apply so I certainly wouldn’t offer that as the answer to slow sales.

  17. Thank you Jason for another great podcast. Artwork supply and demand, pricing and the sweet spot: isn’t that the equivalent to Nirvana?

    Well I have had my share of ups and downs with regards to supply and demand. When I returned to painting after doing other media exclusively I had to reacquaint myself to the current market. I looked at artists who had the breadth and experience that was similar to mine and began my price per sq” system. In addition to returning to painting, I was in a new city. At the time I began showing in one gallery I was guided by the director to reconsider my prices and lower them a bit. I did so as I fully trusted this person.

    Then a few years later with only a few works selling and many renting, I did another research push searching for my sweet spot. [btw: I have always kept my prices the same no matter what city or state they are selling from] After many hours of detailed conversations with selling artists, gallery folks and my business advisor, I came to another pricing structure that I am using today. Immediately one of my works that had been renting successfully, sold. That and along with painting in reasonable sizes, rather than the large scale that I prefer, I am now selling more works than I have to date.

    As an artist, I believe that it is my job to keep current and reasonable with pricing my works. I appreciate hearing all the different scenarios that Jason has presented and you all have shared. This sure puts another fire under my… but I will always be a student in the realm of the business side of my art.

    Thank you all!

  18. Hi Jason,
    Great podcast on another interesting topic.
    Trying to figure out a price for my art is a challenge because my pieces are mixed media where I add wood, glass, plastic and metal along with acrylic paints, and I have not found very many artists doing the same thing as I do so it is difficult to make a comparison. Also, some of my pieces can be the same size but my cost to complete each one will sometimes vary to quite a large degree.
    So, even though my work is not a landscape, or a portrait, or even an abstract, I do have to consider the pricing of those so I am not too high or too low. And I take into account that a well-known artist will have higher prices. But for my style of art, I consider the cost of what I am adding on to my panels, the time I spent on the piece, the reaction of friends and co-workers (I’m still working at a full-time job), and my personal assessment of the finished work. I did sell four pieces in the past two months and so that also gave me an indication that my pricing is reasonable.
    I also work in various sizes with various price points so that my art will be affordable to collectors with different levels of income.
    My first big group show is scheduled for November 11 here in Kitchener-Waterloo, Ontario at a really nice downtown hotel, where I will be one of 48 artists, so my pricing strategy, my art and my sales techniques will be tested.
    Thank you again for sharing your experience.
    Carolyn Dix

  19. Thanks for a great podcast, Jason. Such important points you covered. My experience with supply and demand was an encouraging one. When I started creating painting series fairly regularly and once a few galleries showed my work, I started to sell. My price point was definitely in the “evolving artist” range. I inched my pricing up a bit the next year when I had an open studio event and paintings still sold. As a matter of fact, sales increased. I credit that phenomenon due to a bit more name recognition and word of mouth. I did no advertising other than social media posts. Within the last month, I decided to raise my prices 30%. I respectfully notified my collector’s list to give them 30 days to buy at my old pricing. Within those 30 days, I sold 2 paintings and received 2 commissions. Now, I expect that the briskness of sales will level off while people get used to this price increase, but I have confidence in sales improving overall. I just needed to raise my prices because I found myself not keeping up with demand for my more abstract landscapes. I did do a series that was seriously abstract and was a big change in my style. This was based on a personal experience and one that I just had to produce. My main bread and butter pieces are doing relatively well even though I’m fairly unknown outside my circle of friends, family, and private collectors.

    Thanks again, Jason. I’m getting a lot out of your posts and podcasts.

    Be well.
    Sharon

  20. Outstanding podcast, Jason. Maybe the most valuable that you’ve done — and that’s really saying something, considering the high quality of your entire series.

    Now, about that assignment you gave us: Yes, I have an experience of supply and demand that many of your other artist listeners don’t have; namely, in addition to painting, I also trade options. That means I look at a screen for several hours a day, and see buyers and sellers fighting over the price of financial derivatives.

    In trading, one can see the shifts of economic power on a moment-to-moment basis: There is a Bid (the highest that anyone is willing to pay) and an Ask (the lowest that anyone is willing to sell for). Importantly, there is always a gap between these two prices, and the question is: Who will give in to whom? Or will the two parties meet somewhere in the middle?

    Economic power for sellers means being able to hold or even raise prices, thereby FORCING the counter-party to cross that gap, or at least come closer.

    Here is the one conclusion I’ve reached that has relevance for the art world: People who are beginning sellers of their art have a lot less economic power than the buyers. In fact, the small power that beginning art sellers DO have is almost entirely due to the visual properties of the artwork itself (since the buyer doesn’t know or care who made it).

    Maybe that’s where YOU come in as a dealer, Jason. As you raise your artists out of anonymity, you make the buyers LESS powerful. As soon as a single artist can be distinguished from the other umpteen zillion suppliers of art product, he or she gains economic power.

    I’ll close with this story about the Basquiat skull painting that recently sold for $110,500,000 at auction. The FIRST time that painting sold, it went for $5,000… of which Basquiat received $2,000, and he was delighted with that success.

    No one knew who he was back then… but we all know about him now.

  21. Hi Jason. This was a really good podcast and really struck a chord with me. I am a “new” artist just starting out trying to build my art business. In reality, I have been painting and producing art for a very long time, and supply and demand has always been a problem. I had a brief stint in the 80s, where I was producing artwork for sale but unfortunately, apart from a few sales, had absolutely no success. I had absolutely no experience in marketing myself, and tended to underprice myself and therefore became quite disillusioned. I gave up on being a career artist, worked as a Graphic Designer for a while, and ended up doing something completely unrelated, whilst continuing my art as a personal hobby. Fast forward 25 years or so, and I am now at the point in my life where my circumstances have changed and provided me with a perfect opportunity to pursue my love of art full time, and create an art business doing what I am good at, which is painting portraits.
    I now have the situation, where I am having problems getting my work/services out there. I have had many expressions of interest and very good feedback on the quality of my work, and even comments on how the price point is very reasonable for the quality of the work. However, this is not translating into requests or sales. I have researched the industry to see whether I have overpriced myself, but I am in the medium range for the same type of service and quality, and cannot really lower my prices without underselling myself. I have dropped off business cards at various related organisations (such as vets, animal shelters, pet suppliers, etc.) and also created a Facebook page to advertise myself and my services. I am not sure what I need to do next and would appreciate any feedback if anyone could spare some time. 🙂

  22. I had my first one-man show in 1976. In the early years, I had taken care to approach galleries that seemed beyond the reach of a young, “emerging,” artist, but always did my homework well–so that my work would complement rather than compete with their other artists, in which the size of my works was about average, and in which my paintings could be maximally accessible as a “midrange” in terms of pricing.

    Through the years, I tended to keep my prices low, letting demand determine increases when my ability to provide quality works to galleries appeared to be on track to reduce my inventory to unacceptable levels. There were times when carefully considered advertising forced price increases, but only as a result of increased demand. I was able to consistently sell over 90% of my paintings within their first two years after creation, and was at some points managing relationships with as many as five galleries from coast to coast.

    I retired to Caribbean island at 53–a millionaire on paper. But life continued to deliver the unanticipated. My wife developed early-onset Alzheimers, we moved back to Tucson, and with the stroke of a pen (in order to assure her care) I became a poor man, eventually moving to Guatemala because I could afford to live there on my Social Security income.

    Twenty years ago I was saying that if I stayed in the art business long enough, I’d end up as my own biggest competition, and that turned out to be true. When I retired, my few remaining unsold works couldn’t seem to find price stability. And as my collectors aged and downsized or died, more and more of my work has ended up on the secondary market, often at prices far less than those I charge for my new work. (Yes, I’m painting again.) And even though I continue to sell very well to collectors both old and new, I am somewhat constrained by the auction house prices and have become very unsure about how I should now price my work.

    An interesting problem, no? My work has made huge qualitative leaps in the past couple of years and my choice of subject matter has broadened significantly. But most of my sales now happen through my studio; I can’t get past the gallery gatekeepers these days, but I have never wanted to sell art–I want to create it. That’s why gallery commissions don’t bother me: If a gallery is working hard for me, then it is worth every penny. And I have a suspicion that only the direct involvement of several high-quality galleries will have the power to lift my prices significantly in spite of the secondary market’s downward pressure.

    It’s an interesting problem, yes.

  23. Anyone who’s interested in the pricing of art will find this article fascinating and useful: https://www.artsy.net/article/artsy-editorial-new-collectors-guide-understanding-art-pricing

    For instance, Todd Levin, a New York-based art advisor and founder of Levin Art Group:

    “He recommends assuming the price for a work by a new artist will go to zero after, say, five years, much as a dining set would lose most of its value over a similar time frame. If that work cost $5,000, or $1,000 a year, it works out to a cost of roughly $3 a day. “Is the piece going to give you $3 of pleasure a day?” he asks. If it does, “then it’s worth what you paid for it.” And that, he said, is the point of buying art.
    “If you want to buy stocks,” Levin said, “you can just hang bags of money on the wall.””

    I’ve been saying much the same for decades.

  24. I thought the some of the reasons people buy art was something I had not considered before – altrusim and egoism as well as name recognition. I think one of the issues for me is finding a market/outlet for my work. I have been studying about marketing and recently started using social media and have seen positive responses, but no sales. I made a major move a year and most of my inventory is in storage in a different state.
    Thanks for your podcast.

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