The Retail Equation

Wholesale to Retail Equation

Most artists underprice their work. I have been guilty of this too but have been slowly kicking up my prices based on the following marketing formula.

• Cost of Goods = Supplies + Overhead + Labor

• Cost of Goods x 2 (or more) = Wholesale Price

• Wholesale Price x 2 (or more) = Retail Price

Cost of Goods- This is all the energy, time, and money you put into making your art. What do you want to make for an hourly wage? Work up a number.

Cost of Goods x 2- Double the cost of goods amount (or more)and you have arrived at your wholesale price. This means you have paid your bills for making the art and have made a profit.

Wholesale Price x 2- Double the cost of your wholesale amount  (or more) and you have arrived at your retail price. This means you have paid your bills for making the art and have made a profit and if you are selling the item will make twice the amount again.

If it is your gallery or other vendor who is selling your items they will be making income too.So if you are selling your art retail yourself then you should be making a nice profit overall per piece. If you are having someone else sell it retail for you then you still make a profit selling wholesale but the amount is reduced.

Got it? Great! Probably time to pump up your prices. If you want to raise them slowly over a year to two year period that is OK but look at everything you sell from here on out using the the retail equation ASAP.