I have recently been asked about pricing for creative products-- and to all of those who asked, I answered in the same way: "I don't know".
I really don't-- and that's really a problem.
Usually, those who have asked me were concerned that the price would seem too high to prospective buyers. Regardless of whether the artist (or I) considered the work as worthy of a perceived higher price-point, the same question scrolled through our minds: which client demographic will pay this price for this product-- and how are they best reached? While no one has the answer to these questions either (otherwise, our little problem would've been easily solved); the questions do bring up some important points on sustainability in the arts-- in other words, sustaining one's lifestyle. By this I don't mean paying for a luxurious standard of living, but rather a comfortable life with sufficient housing, sustenance, healthcare, and so on, sustained through a creative practice.
Many artists I've spoken with calculate the time it took to arrive at a creative good in relation to an hourly wage (which is often not exaggerated) to arrive at a final price. This price, however, often seems to potential buyers as being too high. Hence, we have a problem. To provide an explanation, we can look to William Baumol, who is famous for crediting stagnant labor productivity in the arts for these perceived high prices, coining the term "cost disease" (more on that here: https://review.chicagobooth.edu/economics/2017/article/diagnosing-william-baumol-s-cost-disease). The idea is that productivity hasn't increased in the arts, it takes the same manpower to paint a painting now as it did a hundred years ago, though we couldn't pay an artist the same commission for a painting now as we did a hundred years ago. Looking at other industries, technology increased rapidly, resulting in greater productivity and a natural rise in salary. Of course, it wouldn't be fair to assume artists can live on a hundred-year salary, so our view on the cost of a creative products should be adjusted to modern times.
I believe that a disconnect lies in the following: an artist views creativity as a process, whereas a buyer views creativity as a product. It makes sense, of course: the artist understands that to arrive at a final good many hours were spent thinking about it, making drafts, scrapping those drafts, redoing work, perfecting it, and so on. All this time presented opportunity costs-- the artist was not doing anything else to earn an income during these activities leading up to the final piece, and was using other resources other than just time (materials, use of a space, utilities,..). When you think of it this way, the hourly cost for an artist is usually fairly low. But, the buyer sees a product: he sees the painting, for example, estimates the cost of materials, and the time it took strictly to make the final good, for which he is paying, never mind the opportunity costs incurred at arriving just at the stage in which the artist is ready to begin work on the final painting.
I cannot say that anyone is particularly to blame in this scenario, the artist and the buyers all form opinions based on what they know, or think they know, and for this neither can be faulted. The blame lies in the lack of transparency in the creative process-- and potentially the lack of opportunities to monetize the creative process, not just the creative product.
Of course, all artists are unique and talented-- and do have a loyal following. But we're not talking about this following, these are already clients, and possibly there are enough of them to sustainably create from their patronage, but often times there's a need for those who are looking for a new piece of art, something to display, to inspire them, to make them feel happy-- but don't know who to buy from. For these types of clients, unless they convert to the first type who are loyal to your work because they resonate with your particular skill exactly, are likely to be more elastic in their choosing--while they like one artist's work they may also like another's, equally. It is for this client that the price becomes a factor.
Transparency about the process could mean many different things, and luckily in today's world, this should be easier than ever. The internet provides a method by which to disseminate information quicker and more widely than ever. But the use of a space could also help: perhaps letting the public catch a glimpse of the work arena, not just the retail arena. Shortening the distance between work and retail could provide the bridge-- the transparency-- needed to begin to reconcile ideas on pricing, on both sides.
As far as monetizing the process, this is a harder concept to put into practice. Perhaps the most I can do is to offer an example: a fashion designer may be viewed as having an article of clothing as the final creative product, but the drawings used to arrive at the final product are valuable in their own right. Perhaps a final product is far too complex (read: expensive; to the buyer) but a variation on the final product at a lower price point would sustain a business. Prints of different sizes, cards, and so on. The silver lining is that technology has helped the artist, if just to a lesser extent: reproducing designs on prints is more cost effective now, and the labor of coming up with the original design can be considered spent-- rendering some by-products very efficient and potentially price-accessible to the client who is price-elastic. Commercial success does not mean artistic failure-- it means commitment to a practice and to a brand, and this is arguably a creative pursuit in its own right. This is of course not applicable to all artists (or all industries), but as a concept it may be adaptable and transferable. To this end, a strong brand presence is needed; but more on this later.
We are proud to say that we will be trying this out, as part of our sustainability vision. We have decided that at our Columbus coworking location, we will feature a permanent Pop-Up Shop, in which member artists will be able to sell their work on a rotating schedule. Not only will this shorten the divide, but we also believe that this will allow artists to economize, minimizing opportunity costs by providing a cost-effective solution for visibility and branding.