Creators often forget this about pricing
Do you calculate with an overhead and a profit margin when pricing your art? Because you should. Here's how.
Hi! 👋
Do you calculate with an overhead and a profit margin? Because you should. Here's how.
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Story of the week 🗞️
In our recent interview with art quilter and textile artist, Linda Diak, she talked about how "Artists value their time, but they don’t place a value on their time".
You can watch her take on it in this TikTok video as well. She addresses how you can calculate things like your studio time as an artist.
@thecreatorsdiary What is your work actually costing you? 💵 As art quilter Linda Diak explains, many artists don’t factor in studio time when it comes to pricing their artwork. It’s really important that you can tell what your costs are because those have to be reflected in your prices—if you do your calculations well, you can always justify your prices when you meet subjective voices about your art, too. Anyone can say how much they think your art is worth but if you wish to take a stand, the right Maths will help you say: this is what is cost me to do this. In addition, knowing your costs will help you make an actual living from what you create, so that’s another reason why you shouldn’t skip this step. Of course, besides your costs, many other factors should go into your pricing. 🔗Read our art pricing guide with FORMULAS & ARTIST REFERENCES: https://thecreatorsdiary.com/creator-business/how-to-price-your-art/ 🔗 Read our full INTERVIEW WITH LINDA: https://thecreatorsdiary.com/creator-interviews/linda-diak/ #artistinterview #quiltersoftiktok #artpricing #artbusiness #craftingtiktok
♬ original sound - thecreatorsdiary
There are two things I’d like to add to this conversation, things many creators forget about:
- overhead
- profit margin
Both go into your markup, a part of the art pricing formula I wrote about in detail in this article.
The overhead costs are the expenses that are not directly related to creating an artwork, but are costs that you pay on an ongoing basis to run and manage your art business (tools, marketing costs, insurance, taxes).
The overhead can include anything from your studio rent to your webshop operation or invoicing software fees (if you work from home, don’t just consider your full rent, but divide it by the hours you spend in your studio to account specifically for your studio costs here).
Your profit margin is the money left after you deduct your costs. If you don’t calculate with a profit margin and, in short, won’t have a profit after you make a sale, it means you’ll make zero profit margin and that you’re business is breaking even. The revenue covers the costs, so there’s no loss (which can also be incredible if you have a fresh business), but again, no profit either.
We know that creators often have a fluctuating income, and so their profits fluctuate too, but remember that a zero-profit situation won’t be sustainable. You might simply come out even at the end of some months, but let that not be the case long-term. You should aim to maintain a positive profit margin.
Creator quote of the week 📌
UI Designer & Multifandom Artist Tris shared the unreal realities of pricing and selling art. Stand your ground, folks!
See you next week,
Petra
Petra Gönczi
