 Well hello and welcome to this video. Would you like a super simple formula to help you with pricing all the things in your art business? That's whether you offer products or services so that you never have to wonder exactly how to price them ever again. If the answer is yes then you're in the right place, you want to enjoy this video, The Six Steps to Pricing. But wait till the very end because I am sharing the most important part there. And note that this content comes directly from inside my Art Business Academy membership. Now artists in there are using this formula to easily price their artwork every single day. But I wanted to share just a little bit of it with you today to just help and inspire you and show you that there really is an easy formula for pricing everything in your art business. Hello, welcome or welcome back to my channel my name is Sophie Mahia and I love to help artists just like you to set up, market and grow a profitable art business. On this channel we do just that, we talk all things art business related. So if you'd love more tips and tricks on how to grow your successful and profitable art business then make sure to subscribe to my channel and hit that bell to get notified every time I post a new video. Okay, so let's dive into those six steps for pricing your artwork or art services. Now before we dive into the six steps, I'd just like to share with you this simple overarching principle. And that is that you're running an art business. So if every time you create something, you scratch your head, whip out the calculator, start timing yourself, you're really never going to get round to actually creating more products and services and running the business because you'll be so caught up in, well how long did it take me? What is it cost? What should I be doing? How should I price this item? What you do want instead is a really simple formula which I'm going to share with you today. So by remembering that you're running an art business, the thing that you need to note at the end of your year is that so long as your business overall is making a good profit then each individual item doesn't matter so much. Some you might find that you price to break even, others you might even give away as a kind of loss leader. But so long as your core products and services are giving you good profit and that your business overall is in profit at the end of the year, that's what matters. Not each individual thing. You might find that you have two products that are quite similar. One has taken you a huge amount of time and the other one has taken you a small amount of time and I know and I talked about in my previous video the three huge pricing mistakes and what to do about it instead. We discussed those different formulas and really the reasons why you wouldn't want to be doing that type of thing for pricing your artwork and art services. Before we talk about that number one, I can feel you saying, Sophie, what is a good profit? Well, that is going to depend on the type of business that you've got set up but I think you should really be looking at a minimum of 30%, 40%, ideally 50% or 60% profit overall. That's all your sales in minus all your expenses out. Want to talk about more things like that? Make sure you're subscribed to the channel. All right, you won't want to miss more videos because we talk about this all the time. All right, drumroll. Are you ready? Step number one. Oh, yes, we do still need one of these. Step number one is to work out your base costs. You are literally going to think of the item that you sell the most or in this example I've used to kind of medium sized products or service and you're going to work out approximately what costs are involved in making or producing that item. You do need to have some idea of materials. It's just going to give you something to work from. All right, but at the end of the day, you don't need to be working out proportions of a tube of paint and getting it exact. It's a rough ballpark amount. Step number two, once you have that figure in mind, you're now thinking about yourself as an artist and a creative. Step number two is where are you now? Where are you now on your journey as a creative? Are you a total beginner? You've just started out. You've just started creating or making or delivering. You've not really done a workshop. It's your very first workshop. What you're going to be charging at that point in your career is going to be different from 20 years down the road when you are more experienced. All right, so we need to identify that. So if we look to scale from one to 10, where one is I've just started out, I want to start selling things, but I'm really in the beginner phase. To step 10, I've been doing this for 30 years or more. You know, I've been pricing. I'm kind of curious now to see whether I'm on the right track. Maybe I'm looking to improve my pricing or put the pricing up. But basically in terms of my creativity, I'm really experienced. Now, some people ask, is this about you in business? No, this is you as a creative. How long have you been doing your thing? You put that number down, all right? You might say, well, I've been doing it for a while. I'm going to put myself down as a five. All right, let's go on and look at the next step. So step number three now, you're going to research your competition. You need to find out who is doing what you are doing. Who is offering the same product or similar product to the same audience as you. And maybe you already know who your competitors are and that's great. But if you don't, I'm going to urge you to do quite a bit of research. Now, if you sell locally, you maybe want to trundle off and have a look around your galleries, open studios, art fairs, get to know the artists in your area and find out who's a competitor. If you're selling globally, then obviously you need to hit the internet. And we're going to be Googling and looking on Pinterest and looking on Instagram or on YouTube if you teach or deliver art services. All right, you need to do a good amount of research and you want to find somebody who offers what you offer and is likely offering it to a similar audience and who is approximately in the same sort of ballpark on their journey to. So if, for example, you're a total beginner and you've found a competitor who's been in their field for 20 years, they're not exactly offering the same product, right? Because you're still learning and they're experienced. And we do improve with age like a good wine and a good cheese. All right, so if you get away from the food. Once you've done your research, you're going to take the average price of your three competitors. So for example, I very often use an example. I do my costings on say a 30 by 30 canvas. It's usually my bestseller. So if you find somebody who's doing the same sort of size, you take three different prices. You add them up, divide it by three. That gives you the average price point. And now we move on. Step four, it's time for the calculator again unless your numbers are really basic. All right, we're going to do the maths. We're going to work out the maths. And don't get too terrified. This is a super, super simple equation. You're going to take those initial costs that you worked out for creating, making or delivering your art product or art service. You're also going to account for what we call selling fees. That could simply be a credit card processing fee. It could be a percentage from a gallery. It could be any type of fee. It could be that you run a workshop and you've got venue costs. Anything, any costs that are directly related to your product or service, then that's likely going to be a percentage. It might be an amount, but likely it's going to be a percentage. So then we say, okay, well, we've got the average price point that we got from our three competitors. We're going to take away the costs and we're going to take away the percentage selling fees. So for example, we did our competitor analysis and we came up with an average price of $3,000 or pounds. You've worked out that approximately takes it's going to cost you $300 to make your product. And you've decided you're going to sell through a gallery that perhaps takes 50%. See how we're keeping the numbers nice and simple. So we take that $3,000. We minus the $300 and then we minus the 50% of that price. Drumroll, $1,350. You now have a potential profit price for your item. Step five, you're going to use what I call your gut calculator. That's when you look at that price and you go, oh, how does it feel? Oh my God, that's so exciting. I'm really happy to take away $1,300 as profit from that piece of work. Or you're going to look at it and think, that's taken me a really long time. It doesn't feel good. Exactly. We all know how much you'd actually like to charge for product or service and what tends to get away in the way is the old mindset. So we have to bear in mind that when we talk about pricing my experience is largely why most artists don't put a good, a decent price point on their work or their services is because of a lack of belief. They say no one is going to buy it at that price. They have right there a massive limiting belief that is going to hold you back for weeks, months, years of your life. And it's something that you really got to want to work on and eliminate because while you hold a limiting belief that you or your work is not worth a certain price, you're never going to be able to move it forwards. But assuming you don't have that we're now looking at that and you're thinking, okay, how do I feel in here? I feel good about that price but I don't feel so good about it. So what you're going to do is you're going to go back to that average price point and tweak it up or down that 3,000. In order to get that figure higher we're going to say, well, what if we started off at 4,000 and then did the maths? Well, what if we started at 5,000 and then did the maths? Would that give me a better profit margin? And as soon as you get to a number where you're like that feels good, that's the correct price. Now if you're looking at the 1,300 and you're running for the hills because you've never ever made that amount of money before and you're thinking it's too scary I'm never going to be able to charge the 3,000 etc etc etc then you can of course tweak it down. Remember over all with pricing you can always put your prices up but once you've set the prices you can't go backwards. So if you're feeling a little awkward about the price, I'd rather you started at the lower end. Once you gain confidence and you start selling that you then e-kit up. But remember, your ideal customer and if you haven't watched videos on that I will link up there and in the description below your ideal customer, your target market is not buying your work on the price point. They're buying your work because of the value it adds to their life. And as soon as we can make that mental shift you realise that people are falling in love with your artwork and then just referencing how much it is working out how they're going to pay for it that is your ideal customer. The customer that comes along looks at the price point and then looks at the work well you know there are many other shopping avenues that they can go down. We want your ideal customer to be buying your work and that's when of course we need to talk marketing. So make sure to check the links below this video where I share a whole load of marketing videos that's going to help you better get out and get your work in front of the right audience. I promised you at the very beginning the most important part was coming at the end here it is step 6 you need to create your pricing list and before you say oh yeah that's great Sophie I can leave now there's a little bit more to it so what I want to let you know is the list is crucial so once you've got that one piece worked out I usually say that's your key product or your service or maybe perhaps in this example a medium size so for me it would be a 30 by 30 canvas for example and then I might say what's the smallest I'm going to make well that might be I don't know 12 by 12 and what's the largest I'm going to make 2 meters by 2 meters for example the easiest way to do this is to do the same process for the large one and the same process for the small one and once you have small, medium and large you simply you increment out in between so if you offer a variety of sizes on the list and you say ok proportionally that bit more proportionally a bit more until you have a decent scale of prices that works from small to large and then here is the most important part I want you to take away stick to it I've met so many people who said I've just created this new thing what should I price it well don't you have a pricing list you know if you're doing artwork it's going to be by size if you're making like sculpture it might be by type if it's bronzes or if it's clay they might have a pricing list if you're also offering prints you can create a list of prints using the same formula so you may be going to batch things together you only need to do this once you never need to do it again the only time you're going to put it up is at the end of the year when generally everybody starts increasing prices the cost of living goes up this is kind of life you're running a business you are running a business you want to make a profit so at the end of the year you're going to have to put things up maybe your studio rental has gone up your materials have gone up so you make that list and you stick to it and that is it simple as that now if you've loved this video don't forget to give me a thumbs up because that helps more artists like you to see this video and get help with their pricing too thank you so much for watching and I'll see you on the next one