Dec 9th, 2020 • 6 minute read
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#CollectorEducation Series: Why Does Artwork Cost What It Costs? Part 3
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Based on sticker value alone, art can seem like a pricey, intimidating investment. Here at Art in Res we are on a mission to make high end, original art affordable by offering the ability to purchase and enjoy fine art via manageable monthly installment payments. We also want to help our collectors understand what exactly they are paying for in a work of art. We want to break down why art costs what it does. You may be thinking it is all subjective, but in fact, there are many practical, calculated, and familiar reasons behind artists’ pricing.
There are a lot of misunderstandings around the pricing of art, starting with how artists assign cost and value to their work. When we take the time to pull back the curtain we find that artists truly are just small business owners in messier, paint-stained clothing who carry the same expenses as any other business. The pricing of their work is based on a delicate combination of factors involving their craft, supplies, expertise, and more.
In the end, if you don’t know exactly what you are paying for, it can seem that art is that dreaded word: overpriced. We hope to put our heads together and shed some light on the intricate cost aspects of what it means to be a working artist and teach you, as a collector, some ways to think about the intrinsic monetary value of art.
In Parts 1 & 2 of this discussion we spoke about some of the tangible costs associated with creating art such as Materials, Monthly Expenses, and Time, Labor, & Skill as well as the intangible factors of understanding why art costs what it costs such as valuing Experience, Expertise, and the simple factor of, Because You Like It :)
These sections have mostly focused on the production value behind art –– what it takes to actually make the work and how we can assign monetary value to this. But now it is time to factor in some of the actual immediate upfront expenses the artist faces that occur the moment you purchase a work of art from them.
Heading into Part 3, we will focus on some of these immediate expenses that occur when a work of art is sold:
Commission Structure
Whenever an artist sells their work, whether it be through a gallery or via an online platform, there is a sales commission structure. On each sale, Art in Res immediately takes 30% of the listed price. We at Art in Res always put our desire to support emerging artists first, which means we have done a lot of work to reduce our overheads so that we can offer artists a much higher cut on their sales than traditional galleries and can continue to support artists for years to come. This highlights again the fact that Art and its market does not exist outside the realm of the consumer market system. Our mission is to make that system fair and rewarding for artists and collectors alike.
While this 30% commission is compared to the jaw-dropping gallery industry standard of 50%, this is certainly still a substantial fee for any artist to take on. So why do artists agree to these sale commission structures? Well, we can only speak to what we know here at Art in Res, but in order to support our artists properly and help you, the collector, find amazing art, we take on the actually really fun, but costly burden of researching artists and art, marketing, promotion, artist community development, curations, installment payment management, and collector education resources, as well as the not so fun shipping logistics.
We are a committee of highly trained and passionate art lovers doing the hard work of ensuring that the art represented on our site is worth investing in, so that you don’t have to and can sit back and just enjoy collecting your favorites! Even the most exciting art on the market requires marketing, promotion and finding the right buyer. That has a value our artists understand and appreciate.
Framing
When artists are deciding their sticker cost they also have to consider the upfront expense of framing the work of art. All of our artwork on Art in Res comes “ready to hang” which means any work on paper –– or anything other than stretched canvas paintings –– comes in a beautiful frame. Now, framing prices can range anywhere from super cheap plastic Michael’s frames to very expensive custom frames and so this can also be a reason for any variables in art price ranges.
Cheap or pricey, the artist has to front the cost of framing their work. For any working artist, this can be a major burden. And when we begin to consider the affordable installment payments Art in Res offers it’s collectors, it can be months before an artist even ‘makes back’ the money they spent on the frame for your piece let alone begin to see any profits.
Taxes
Ah those trusty, pesky ol’ things called taxes. That’s right, not even artists are free from participating. Income tax for our artists come in the form of 1099s which means that our artists get slammed with fees at the end of the year. Now, this may not fall under the ‘‘immediate expense’ designation, but it is certainly something that every artist has to consider when selling their work.
This is just another example of how artists function like any other small business. Expenses, overhead, taxes, etc… all familiar words to any business and artists are certainly far from exempt.
Once we understand this, then…
Suffice to say no emerging artist is skipping to the bank with bags of money from any one sale of art, but your support –– financial and professional alike –– means the absolute world to them. With each purchase you make, it means that this artist you invested in, believed in, and supported, can go back to their studio the next day and continue doing that they love.
I think we all wish artists could pocket the full list price, but at the end of the day, art is expensive to buy for the simple fact that art is expensive to make and sell. Quality products cost money.
And that brings us to the conclusion of the Why Does Artwork Cost What it Costs? series. In this three part series we discussed both the tangible and intangible as well as immediate costs of art. From materials, monthly expenses, & time, labor and skills to experience and expertise to actual immediate expenses, we have focused on many of the factors artists are considering when pricing their art. Next time we will focus on summarizing the more inherent social values we place on art and how this investment has potential to stay with us for years to come in Art as an Investment: One of the many ways your art gives back to you!.
We hope you learned something new from this article and are excited for more #CollectorEducation to come! If this article raised more questions for you than it answered, that’s ok too. We encourage you to reach out to us directly with any follow up questions you may have. We’d love to hear from you! You can message Mel Reese and Noni Culotta directly at mel@artinres.com/@melaniereese and noni@artinres.com/@austinartscout respectively.
Virtual installations courtesy of ArtPlacer