The important things to know about pricing Affordable Art

The really important things to know 

about pricing Affordable Art

There are two things you need to know about pricing affordable art.

The first is that what the PUBLIC think is "affordable" is the only game in time.
It's emphatically NOT what the artists or the art galleries and art fairs think it is. 
That's because they're trying to make money for themselves so they have a huge incentive to call it "affordable" but then pitch the price high!

The second is that it's the PSYCHOLOGICAL VALUE of a number that really matters. A poll I ran revealed that

• Between 64-70% would buy art up to 500 (of whichever currency)
• Between 70-91% would buy art up to 1000 (of whichever currency)
• ONLY 9-10% would contemplate buying art above 1000 (of whichever currency)

The important thing is to identify what are the key hurdle prices which change behaviour. It's akin to the notion that you should always price just below an important hurdle price rather than just above.

IMAGE: My page about The Price of Affordable Art on my website Art Business Info for Artists

Why I got interested in the price of affordable art

I became very interested in the concept of affordable art - and its pricing - back in 2010 (post the banking crisis of 2008 and what followed).  

This was a time when a lot of art galleries were closing - mainly because people were not buying and/or because the people who ran the galleries were not good business people and/or they had no concept of risk management and made no provision for a difficult economic context

The main reason for my interest was that artists were trying to sell in a difficult economic context and kept getting their pricing wrong which meant their sales were also plummeting.

They very much needed to understand 

• what was deemed "affordable" and would still sell.
• what were the key hurdle prices within the range they considered affordable.
• how to avoid shooting themselves in the foot due to poor pricing practices.

We've now had 12 months of a very difficult economic climate with inflation and significant interest rate rises. It's not coming to an end any time soon - even if it has improved somewhat. We are still a long way adrift from where we were two years ago.

Bottom line - we are now back in the same territory as 2010 and the same issues and questions apply re. pricing.

What is an affordable price?

What is "Affordable Art"?

This is a discussion for artists, art galleries, art fairs and art dealers - over three blog posts today, tomorrow and Friday - about:

TODAY

• What is "affordable"?
• What is Affordable Art and how is it defined?

TOMORROW

• How to price Affordable Art - the really important things you need to know - find out:
• who determines what is affordable
• why people attach importance to specific numbers
• what are the big price hurdles and 
• how they can vary between countries

FRIDAY

• The importance of the minimum price to sales in open exhibitions

These all point in the direction of more information on this very important topic for all those trying selling art in a difficult economic context - particularly all artists, art societies, art fairs and art galleries.

________________________________________

What is "affordable"?

"Affordable" means something different to everybody, 

but generally means 'not expensive' relative to income

and can vary over time, place and economic context

It's a concept which relates to a very wide variety of products and services. 

"Affordable" is emphatically not the same as "cheap". 

Very often it means

• the price that people can "afford to pay" for a non-essential / discretionary good or service using any surplus income....
• AFTER other necessary / essential demands on their income have been covered 
• BUT it also depends on 
• how financially secure they feel; and 
• How big a financial 'buffer' they feel they need - and how much is left over for discretionary spending - and hence what feels "affordable"
• 
  

The importance of substitution within the economic context

What seems very affordable in one year can look much too expensive in the next IF essential demands on income have increased (eg mortgage interest rate rises; inflation rate increases)

In this context, people can still have budgets which allow some spending - but not so much as before. Which means "affordable" can have moving goalposts.

Practical examples include:

• people still have treats - but they are maybe not as big or as expensive (equivalent to still buying art - but at lower prices)
• people take staycations rather than holidaying abroad because they are deemed more affordable. ( equivalent to people buying art online rather than from galleries because it's a popular thing to do - and also because nobody needs to know you used to buy more expensive art elsewhere)

What is "Affordable Art" and how is it defined?

In the context of art, very rich people are still very rich and can still afford to buy expensive art. But this is utterly irrelevant for most players in the art marketplace.

In my view (and from observation), in a time of economic difficulty, something usually happens within the vast numbers of people on "middle incomes" who like art and have bought it in the past

• People who have bought expensive art in the past can 
• start trading down and 
• start buying more affordable art when they are feeling the pinch. 
• They're still buying art - but just not spending so much. 
• So they buy less (reduced sales)
• or they buy at lower prices (changing the range of prices they're happy looking at)

Plus let's not forget, many artists who sell their "more affordable" art online commented that they made MORE money during the pandemic than they had ever done because people had the money spare for small treats - and couldn't get into the art galleries who were typically also much less good at marketing online!

So what's my definition of Affordable Art?