I’ve been talking about a lot of different reasons you might raise your prices, but I’d like to go over the most obvious – when you’ve gotten to a point where you’re creating as much as you can create (and still have time to answer customer emails, package up the art and ship it out, and deal with the other logistics of running a business) and you’re selling regularly and you’re selling most of the work you produce, then you’ve hit an income ceiling. You can’t make more money if you’re selling all the pieces you can possibly sell. So the only choice if you’d like to make more money is to raise your prices.
Now I know you’re probably here reading this blog because you aren’t selling all the pieces you can possibly sell. You’d like to sell much more regularly, right?
But I still want you to be able to envision all the reasons you might increase the prices for your art, even if now isn’t the time to do it. Go back and read the two previous posts (1 and 2) so you can understand other reasons why it still might be time to raise your prices.
And think about what you’ve heard of supply and demand. How many pieces you can possibly make is your max supply. If demand (how many sales you make) meets supply, that’s the most money you can possibly make.
Unless you raise your prices. Raising your prices increases your income from those pieces, but it can also sometimes mess with demand. I’ve seen it go both ways, depending on the type of customers involved. I’ve seen artists raise their prices and suddenly sell a lot more (probably because of last week’s post topic). And I’ve seen artists raise their prices and see a small decrease in sales. But typically the decrease in demand isn’t enough to be making less than you were with the cheaper prices. If the it falls that low, then you would want to lower your prices again.
Let me give you number examples. Say Linda was selling her paintings at $500 each and typically selling all 5 of the paintings she could create in a month. So her maximum income was $2500. When she increased to $750 each, it turned her max income to $3750, but she was only selling 4 of the 5 paintings she could create in a month. So she was still making $3000 ($500 more than she was at her old prices). Demand went down a bit, but she still increased her maximum income.
And not all artists have a decrease in demand like my mythical Linda. If she didn’t have a decrease in demand, she’d be making that full $3750 every month!
So keep a watch out for this. As you start to sell more, pay attention to how much you’re really able to make and still have time to run the rest of the business (and time for your personal life! don’t let business suck you in too far!). Then see how you can play with your pricing to account for your limited ability to produce art.
The last reason you might decide to raise your prices is that you also want to keep up with the general inflation of the market.
Year after year, prices go up in all industries just a teensy bit. Your eggs this year probably cost a couple cents more than they did last year. Not noticeably, but just enough to keep up with the economy. I could go into economics here, but it’s not my strong suit and I’d probably bore you anyway. If you’re curious, Google “inflation” and read about how it works.
You aren’t required to raise your prices, but a lot of artists will increase their numbers just a few dollars each year. It’s an acceptable practice and can help you slowly raise your prices little by little instead of overnight.
If you do choose to raise overnight, I highly suggest you “launch” your new prices by telling your following that the prices will be increasing several weeks leading up to the date they actually do. If you remind them a few times, you’ll usually see a few more sales come up before they would have to pay more for the pieces.
If you’re looking for more help with setting prices for your art, not only am I giving an online lecture next week about pricing art effectively but I’m also answering questions about pricing your art specifically. If you sign up for the webinar, you can even submit a picture of your art ahead of time with your questions and I’ll be sure to answer them during the lecture. There will even be a recording so that you can watch the lecture even if you can’t make it live. You can sign up over here.