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Monday, April 11, 2016
Artists Experimenting with "Pay What You Want" Pricing (Updated 04-12-16)
This is a relatively new phenomenon in the world of art where the buyer can establish their own value and price for a piece of art they want to purchase. I'd not seen any other artists trying this out so I ran my own experiment.
I chose a medium priced piece of sculpture ($300.00) for the experiment. You can establish a base price so I placed mine at $25.00. My biggest concern was the shipping costs. While I can eat the cost of a sculpture that might sell at a low price, I cannot eat the shipping costs. Since sculpture must be sent through special shippers to guarantee its safety, my shipping costs are all relatively high. In the case of this sculpture I had shipping set at $75.00 for domestic shipping and $150.00 for international. I found after some research that shipping costs would not be effected by the Pay What You Want pricing. The shipping would hold firm.
So I changed the pricing and began advertising it. I did not go all out on promoting the item. I just wanted to see what it would do. I established a close date of Friday at midnight of the following week. The item would remain until that time and then would revert back to its original price of $300.00.
I placed an ad for the item on my website and then periodically would promote it on Twitter. I also put a single add up on Google+.
The item of course did not sell and I honestly did not expect it to do so with so little hype. But I learned several crucial things from the experiment. First I noted that the item got a much higher view than other items in the same category. People seemed intrigued by the concept and were spurred on to at least look at the item. For an artist getting people to look is the hardest part. So I count this as a positive aspect of the experiment. Second the preparation for putting the item up was not complex. I could place the item and its ads quickly and remove the special pricing quickly at the end of the sale. Third it gave me one more thing to post about on the social networks. A piece of art which had already been promoted thoroughly could be resurrected under this new concept and given new promotional life.
The drawbacks? First I felt like I wasn't wording my ads well. This may take some time and exploration to get the right wording to attract potential buyers and can only come from experience and some research online to find out what other artists are doing successfully in this area. Second I felt like there were limited places that I could post about it. While I did not actively pursue the best ways to post this item, if I do it again (which I will) I need to establish a regular group of venues where I can post about the item.
Overall though I can see the potential of this pricing strategy. I can see a potential buyer who can only afford $200 and who feel they can't afford $300 being suitably motivated to buy. I can see generosity playing a big part in the possibility of getting the full $300 out of the item still.
Most important I can see the potential for any creative venture such as art, books and music. It seems to fit.
I don't have plans to move a huge amount of my inventory to this concept, but I think an item or two a week would not be an unwise investment.
Lets face it an artist can create amazing work on limited budgets. The piece I experimented with was made from 5 pieces of cypress driftwood, a Christmas village gazebo that caught my eye for $1.50, foaming glue, natural clay and a base tile. The whole estimated cost to construct the piece just based on supplies was no more than $20.00.
Yes I am not counting ingenuity, years of artistic talent and hours to construct the piece (which was about 25 hours). Those all play into the overall value of the piece. But from strictly a supply standpoint, Pay What You Want pricing may have its advantages. And I must admit that for an artist who completes in excess of 10 sculptures a month, this allows for a bit freeing up of precious space which can get overwhelmed by art over time.
So I would love to hear back from other artists who have or are planning to experiment with this concept. I am sure I will have more to add later as I continue experimenting in this area. I've added some interesting links to this article that may help with those who want more information. The first link is to the selling platform that I use, for anyone who might be interested in using them.
Wikipedia - Pay what you want
Pay-What-You-Want Pricing: Sustainable Model or Useless Gimmick?
Is Pay What You Want Pricing for You?
Pay What You Want – The Craziest Pricing Technique that Works
I am going to try an experiment for my show in March. I am going to do something I call "range pricing". Instead of listing a single price for an item, I am going to instead list a top and bottom range. For example:
One Price $500
Range Price $400 - $600
The thought is that people who cannot afford the single price will often not feel comfortable trying to bargain. This gives them a bargaining range that they can work with without feeling the psychological impact of forcing a bargain. We will see if it works. I will update this page after the show.
So at the last moment i decided to not go with range pricing for the show in March. It wasn't that the idea didn't have merit, but that we had so many other things going on that I felt it might complicate matters in a way that wouldn't be healthy for the show itself.
Now immediately upon the conclusion of the show I embarked on some serious experiments in this area. I decided to take every new piece I created and place it on a 72 hour Pay What You Want price plan. I pushed the shipping price up though to guarantee that I wouldn't lose my shirt in the shipping costs.
I ran this 72 hour special on 4 items and absolutely nothing sold. What I found most intriguing about this is that no one seemed to realize that any given sculpture in that 72 hour period if it was bought locally and picked up at the studio could have literally been bought for penny's. I did this on purpose just to see what would happen.
This tells me something crucial. It tells me that most people don't even grasp (no matter how well its explained) what Pay What You Want Pricing is. I am guessing that many think its a scam. How and why would an artist be selling work in this way? This hesitancy causes the potential buyer to back away from the item completely. It is my final evaluation that Pay What You Want works best for an established artist with a large reputation and works best on smaller, less expensive items. A sculpture regularly priced at $600 seems a little to good to be true, where a sculpture priced regularly at $50 seems more realistic.
So I've definitely learned some valuable information in these experiments. So now I'm going to shift my tactics and see what happens when I set a base price. With the next item that goes up for the 72 hour window, I will establish three prices. In the first 24 hours the item will be priced at $25. In the second 24 hours it will go to $50 and in the last 24 hours it will go to $100. After that time it will go to its normally marked price.
I probably won't do this is a regular thing, but I just want to see how people react to seeing an established price instead of letting them establish their own. I will update in a week or so after this next phase of pricing has been tested.
Face it, the whole reason for doing this is to make people look. If they will look at a sales item they will eventually pay attention to the whole inventory. If they buy one, then the chances are they will buy more and become collectors. I use this same logic when I give away a smaller sculpture. If they like the freebie, chances are they will want to buy more. And the added benefit is that it establishes the artists name out there and makes their work become collectible.