Our flexible pricing model for art on demand

Background

We recently introduced a new system for store owners to price their products and imagery on the MagnoliaSoft platform. Many different store owners, publishers and manufacturers use our platform, and we have discovered that there is no common consensus in how product prices are calculated. Whilst we would love all our clients to adopt the same pricing model, we recognise that this is either impractical or just plain impossible for many.

When we first started out, it was convenient to price art on demand products separately to prepublished images or originals, and we used "one print option = one price". In other words, for a canvas of a certain size, with a certain type of wrapped edged/gloss finish/etc., there was a set price of £X. Although this was sufficient for a while, this method does have a few major drawbacks, such as: all canvases of a certain type/size were the same price no matter what image was printed on it; and if you happened to sell more than a handful of sizes, media and frames, it meant you had to price up many hundreds of possible combinations.

The new model

The new pricing model works by allowing the price of any image on any print option to be the sum of the prices of all its parts.

Any item in one of our stores is made up of the following parts:

1. Media type - canvas, art paper
2. Frame or canvas wrap type
3. Selected size
4. Mount
5. Glaze - perspex or glass on framed prints, for example
6. Finish - such as matt, gloss, and so on.
7. Overall print option
8. Image itself

(There are other factors, such as special effects, taxes, voucher codes, price adjustments, and so on, but let's keep things reasonably simple!)

We call items 1-6 the print components and item 7 is the print option, a particular combination of the print components 1-6.

The original model, then, was just setting the print option price. With the new pricing mode, each of 1-8 above has an individual price, and the total price for any given image with any given print option is calculated by adding them all together.

Where things can get particularly useful/complicated is that for each of the print components 1-6 the price is based on either/both a fixed price or a per-area price (per perimeter in the case of frame/wraps).

Let's take some made-up prices for canvases as an example: up to 30cm²: Fixed price of £10, per-area price of £0.50 up to 60cm²: Fixed price of £10, per-area price of £0.25 per cm2 over 60cm²: Fixed price of £10, per-area price of £0.00

If the product was 40cm², then the price for the canvas part of the product would be: £10 + (£0.25*40) = £20.

Remember that this exact same method of pricing is used for each separate print component, so this £20 will be added to a similarly calculated price for the mount, the glaze, and so on. On top of this, any print option cost (no.7) and the price of the image (no.8) are also added to make the grand total.

And for any given product, this depth of pricing detail is available for its cost price, its trade price, its SRP as well as its actual selling price on the store.

Woah that's complicated!

There's no doubt that it can be, especially when you bring in discounts and price restrictions based on minimum margins.

However, you do not have to price every item (1-8) separately. Since the overall price is calculated by adding them all together, setting any item to £0 effectively removes it from pricing model and simplifies the whole process. For example, our original pricing method (pricing the print option only) is exactly the same as setting all the print components and image prices to £0.

In summary then...

• Each print component ("canvas", "gallery wrap", etc.) can have its own price.
• Each print component can use stepped pricing/breakpoints, but they do not have to.
• For each step/breakpoint, you can define both a fixed price and a per-m² price.
• The number of breakpoints and where these breakpoints occur do not need to be the same for each print component.
• Each print component can just be priced at £0 if needed.
• All these prices are added together to calculate the cost/trade/selling/SRP prices.

The only restriction (allow us one, at least) is that it is the printer who decides no whether to use stepped pricing and where the breakpoints are. Anyone who sells this print component on their store must also price according to these steps. Of course the store owner can decide to price all steps all the same, but what they can't do is change where the breakpoints are, or add more steps.