Friday, December 17, 2010

Recession Pricing

Whereas BC’s and Canada’s economy is fairing decently (so far) in the context of the global financial tsunami of late, it seemed like a good time to look at how artists can adapt to sales during rough economic times. British artist Damian Hirst, for example, has sidestepped his usual practice of selling though a gallery to instead offer a substantial body of work directly through auction at Sotheby’s. The sale generated $125 million (US) worth of sales in two days. There are two things about the sale worth noting: Hirst paid a vastly smaller commission to Sotheby’s than he would have to a dealer, finding a way to increase his income in rough economic times; and the market for his art remained strong in spite of crashing stock markets.

Whereas no other artist operates at Hirst’s level, it is worth noting that even at the top, artists must explore innovative ways to maximize their earnings. When times are tough for everyone and not just you—when there is a recession or when unemployment rates are high—artists may have noticeable difficulties with sales. In these times, when people are getting laid off, taking cuts in pay or losing jobs to downsizing or bankruptcies, you may have to drop your prices.

If your sales are down, if fewer people are responding to your invitations, if your gallery is finding the sale of work down for all their artists, drop your prices, offer to be paid in installments, or offer exchanges. Some artists become entrepreneurial during such times, producing work that is inexpensive and about the economic challenges of the times, or producing optimistic, powerful statements. Others offer their works for rent instead of purchase.

An “emergency” sale is credible if there is a coincidental social, financial or personal crisis. When you are faced with real adversity, a sale to raise “emergency” revenue can be very effective. This is a practice that should be done rarely. At such a time (serious illness, studio fire, recession, relocation), reduce prices and develop an invitation and/or sales flyer that can communicate with a large number of people on your mailing list. Your notice should focus on the need for “inventory reduction” (tell them why) and provide examples of your “highly discounted” prices. Don’t sell your best work at these events—hide it. Use the sale to move pieces that have not sold over time, multiples, slightly damaged work, and/or those pieces that no longer represent your artistic voice.

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