Sunday, July 10, 2011

How to figure your price before commission.

If you know how much you want (your share) for a particular work you have entered into a competition or are showing in a gallery, how do you figure out the selling price?

If the commission is 50 percent, it's simple: just double your price.

For any other commission, the basic math is really the same, but since the relationship between the two numbers isn't as obvious, you have to do step by step what you did so easily in your head above. And here are the steps.

1. Change the commission from a percentage to a decimal. To do this, simply remove the percentage sign from behind the number and put a dot in front of it. Thus 40% becomes .40 (or .4; they're both the same).

2. Calculate your percentage; that is, the percent of the selling price you get. To do this, subtract the commission (expressed as a decimal) from 1. Using .40 from above, you'd get .60 (1-.40 =.60). If you can't do that easily in your head,, add two zeros to the 1 and remove the decimal point from the commission, so 100 - 40 = 60, then put the decimal point back, so it becomes .60.)

3. Divide the your percentage (the result above) into 1. Go ahead and use a calculator if you need to, but if you can do simple fractions in your head, you'll quickly see that .6 is the same as 3/5 (6/10) and that dividing any fraction into 1 is simply turning it upside down, so that you'd come up with the number 5/3, which is the same as 1 2/3. If you did this with a calculator you'd come up with the number 1.67, which is the same.

4. Multiply the result from step 3, above, times your share. So if your share -- the amount you want -- is $1000, the list price will be $1670, which you could round off to either $1650 or $1700 if you want.

The formula is list price = 1/(1- commission) x your share.

Using the figures above:

list price = 1/(1-.40) x 1000
list price = (1/.6) x 1000
lit price = 1.67 x 1000
list price = 1670

5 comments:

  1. Remember that you cannot simply add the cost of the frame to the list price if you wish to recover the framing costs. You must also add this into the calculations. Therefore to recover a $200 frame add $334 to the list price (1.67*200=334). Sometimes, if the framing costs are not discounted to you, the cost of the framing becomes unreasonable because of the additional charges (a $200 frame becoming $334).

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  2. Important point, Steven, thanks. I've seen artists who ignored this to their detriment, where a sale would actually result in a loss.

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  3. In a 40% gallery do this

    $ I want divided by .60 = amount I should price it for

    $160/.60=266.

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