The art and science of setting prices

There's a strange dynamic that occurs when setting prices on handcrafted items or freelance services. Considerations for setting prices include, but are not limited to:

• The cost of materials
• The hourly cost of time
• The level of effort involved
• The level of skill involved
• The level of clientele desired
• The level of clientele available
• Physical location.

Let's use artwork as an example. My friend and I sell our original painings. In 2022 and unsure of the market, we priced our paintings as follows: $25 for large; $15 for medium; and $10 for small. We added a further incentive: $10 off the entire purchase if the customer buys two or more paintings. (I have to sell two to three times as many books as paintings to earn an amount similar to selling paintings.) Last year we did pretty well overall at various arts and crafts festivals in our local region with our best sales occuring at the Clifton Gorge Arts & Music Festival. We'll be there again this year.

We sold quite a few paintings overall, although there were some events where we couldn't sell paintings for those low prices. We joked that, despite the compliments on our artwork, we wouldn't have been able to sell the paintings if we paid customers to take them, because sometimes it felt like that. We also received advice from several customers that the prices we charged were too low.

So we raised our prices to about half of the advised amount and kept the multi-item discount. Sales plummeted. Of course, we make the same amount of money with fewer paintings sold, but that just results in an overflowing inventory of paintings. We only have so much storage space, you know.

We still get lots of compliments on our work. Sales of small and medium paintings outstrip sales of large canvases.

Both of us are loath to reduce our prices. If we charged for our paintings based on an hourly wage, the prices would be even higher. I'm considering whether to raise the multi-item discount rather than reduce prices. Would that be sufficient incentive?

Perhaps the venues where we've been selling aren't the right places to sell artwork. That's certainly a possibility and an hypothesis that will be put to the test on July 8 at Art on the Hill in Mantua, Ohio. In neighborhoods where household income trends toward the lower end of the economic spectrum, people are less likely to have the disposable income to spend on artwork. More upscale communities have more more money to spend on luxuries like artwork. That's not an indictment, just admission of certain realities.

I have noticed that at events where our artwork doesn't sell well, my books do. That makes bringing and offering both books and paintings a smart decision for me. My friend may have an opposite opinion, as she only sells paintings and an event that proves unprofitable for her isn't one she's likely to want to return to, regardless of how well my books sold. Since we generally go together to events, it behooves the both of us to consider our combined commercial outcome when deciding whether to register.