How to set up your pricing strategy?

- 03/14/2022

Increase your earnings with the right pricing strategy.

To reach your earning goals, you should balance your desired service rates with your competition’s, as well as with fellow galleries’ price expectations.

To set-up your pricing strategy, consider following a 3-step process:

o Step 1. Identify your gallery’s operating costs

o Step 2. Benchmark your competition’s prices

o Step 3. Establish your own pricing strategy

 

Step 1. Identify your gallery’s operating costs

To the gallery fellow, you are both a partner and a service provider. He relies on you not only to look after artworks, but also to engage with art buyers and hopefully, to sell.

Your service includes everything that you do and have to run your gallery, including your time.

To find out what number it sums up to, start by listing your real monthly costs, without adding anything to it yet. Download our Excel spreadsheet or document the following fields of information on a sheet of paper:

o Monthly lease: input number

o Monthly salaries: input number

o Monthly electricity: input number

o Monthly insurance: input number

o Total monthly fixed costs: input number

 

To that amount, add the your % profit rate:

o Total monthly fixed costs:

o Profit rate: input desired %

o Public price charged: you do the math 🙂

 

Step 2. Benchmark your competition’s prices

Price is one of the main factors when choosing where to exhibit.

No matter how beautiful your gallery space is, if your fellowship offers are priced higher than comparable galleries of your area, you will end up missing opportunities.

Do a little market research.

Start by searching Muse Square for similar galleries, taking into consideration:

o The gallery type: established, emerging, newly created

o The size of the exhibition space

o The number of walls listed

o The size of the storage area

o The number of storage racks available

After identifying comparable galleries, compare exhibition costs per liner meter to yours. Is it cheaper, more expensive?

Adjust your profit rate based on second set of criteria:

o Your notoriety in the art industry: is it higher, equal, or lower than benchmarked galleries?

o Your location: are you in the art district of your city, nearby a city landmark, other?

o The quality of your exhibition space: is it exceptional, good, average, if compared to benchmarked galleries?

Based on your answers, fine-tune your target profit rate and validate your public price per month per liner meter of exhibition space.

At any time, you can adjust your pricing based seasonally, on weekends, and for special events or holidays.

 

Step 3.  Establish your own pricing strategy

Once you have know the cost of your exhibition space per linear meter per month, you have to ask yourself: what does that number means?

To answer, that question, ask yourself:

o Considering the cost of 10 linear meters + cost of artwork transportation, is my offer competitive?

o Would you book your own services for the set price?

You can further fine-tune your pricing strategy, but you’re basically good to go. It’s time to test and learn.

It may take some time and a bit of trial and error to get your pricing right. Be flexible and stay focused on fellow galleries’ satisfaction. After all, more positive reviews will bring more opportunities.

 

Advice for your first fellowship

When you’re just starting out, it’s a good idea to have a competitive price.

Guests are hesitant to book galleries with no reviews. For new gallery hosts, setting your price a little lower than your target is a great way to attract fellow galleries. Once you have positive reviews, you can raise your price to match the demand in your area.

Competitive pricing can also help your listing rank higher in search.

One last thing: everything that you factor into your pricing may not be obvious to others. For instance, the name of your city neighborhood may mean nothing to someone who doesn’t know your town. The same can be said about your gallery space. All of your gallery’s special features should be explicitly highlighted in your listing.