pricing art for sustainability monika waterall. pricing art for sustainability 1.pricing dilemma...
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Pricing Art for Sustainability
Monika Waterall
Pricing Art for Sustainability
1. Pricing Dilemma
2. Cost Allocation
3. Budget and Ensuring Wages
4. Wage-Based Pricing
5. Joint Venture Advantages
6. Cost-Based Pricing
7. Attracting Investors and Your Investments
Pricing Dilemma: Paying Bills
• Overhead• Supplies
• Short term supplies• Film, paper• Clay, glaze
• Long term = EXPENSIVE• Camera, computer• Kiln, wheel
• Rent• Utility • Wages
• Labor = Pay Yourself!
Accounting Terms & Practices
Damien Hirst
–Sotheby’s auction–Art Factories–160 employees–Personal business manager
Personal Budget: Weekly Fixed1. Add 4 weeks of pay
1. $36,000 / 52 weeks in a year2. About $700 Gross, $500 after taxes (Single
0 withholding)
2. Divide bills as evenly as possible per week
3. Remainder = Approximate Extra spending (going out)
4. This is how much money you see in your bank account
Personal Budget
Ensuring Your Wage: Industry Standard
Labor Hours x hourly wage
1. Glassdoor, Simply Hired, Ehow.com
2. Yearly Salary / 52 weeks in a year / 40 hours a week
• Ceramics Artist $27,000 = $13 per hour• Photographer $30,000 = $14.50
Wage-Based Pricing
( cost x 2) + ( labor hours x hourly wage)
= Price Per Piece
Wage-Based Pricing: Long Term Cost Allocation
Wage-Based Pricing: Short Term Cost Allocation
Wage-Based Pricing: Wage per Piece
Wage-Based Pricing: Price Per Mug
Short Term Cost $0.19 + Long Term Cost $4.50
Total Cost per Mug $4.69
( cost x 2)+ ( labor hours x hourly wage)
= Price Per Piece
Total Cost per Mug $4.69 x 2
$9.38
Cost per Mug $9.38
+ Total Wage per Mug$10.38
Price Per Piece = $19.76
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Payoff of Long Term Supplies: Sole Proprietorship
$_________ LT cost payoff and ST supplies from Sole proprietorship from 4 a./ $_____________ Total Long Term Supplies= _____________ # pieces to sell to pay off Long Term Supplies
Add Long Term Supply Costs from Sole Proprietorship:LT Supply #1 $_______________LT Supply #2 $_______________LT Supply #3 $_______________=$___________________________ Total Long Term Supplies
Payoff of Long Term Supplies: Joint Venture
$_________ LT cost payoff and ST supplies from Sole proprietorship from 4 a. + $________ Difference per Piece from Joint Venture 4 a.=$__________/ $_____________ Total Long Term Supplies= _____________ # pieces to sell to pay off Long Term Supplies
Payoff of Long Term Supplies: Joint Venture
$_________ LT cost payoff and ST supplies from Sole proprietorship from 4 a. + $________ Difference per Piece from Joint Venture 4 a.=$__________/ $_____________ Total Long Term Supplies= _____________ # pieces to sell to pay off Long Term Supplies
Joint Venture Activity
Find Best Possible Shared Cost
Joint Venture Activity
$_________ LT cost payoff and ST supplies from Sole proprietorship from 4 a. + $________ Difference per Piece from Joint Venture 4 a.=$__________/ $_____________ Total Long Term Supplies= _____________ # pieces to sell to pay off Long Term Supplies
• Best shared cost = earlier payoff
• Double Cost Expense Returns after payoff= attracting investors
Cost-Based Pricing
30% Cost + 30 % Markup + 30% Labor + 10% Retained Earnings
= Price Per Piece •30 % Markup = pay off Long Term supplies, then profits after Break Even point•10% Retained Earnings = future investment•More expensive supplies = higher wages
Pay Off Long Term Supplies Early = Industry Investments
• Real EstateBrice Marden
Bought SoHo (artist neighborhood) properties cheap
• Gallery for Other ArtistsDay 19 (Jeremy & Clare Weiss)
Creating Capital: Sustainability
• Easy accounting
• Payoff of Long Term Investments = Pitching to Investors
• Guaranteed • Supplies• Wages• Profits
