I have been approached many times by other Artists starting out in the Commission market who have asked 'What should I charge'? The truth is there is no perfect answer to this, every one has different circumstances and should do as much research as possible before deciding on their own prices as there are no fixed rules in this 'business' - I can offer a few pointers that may help you decide your starting prices based on my own experiences over the years but this information is only offered purely as a guide, but hopefully will give you some good ideas.
USP - your unique selling point
Before you even begin selling your 'product', sit down and write down what you think your unique selling point is, this will help you to sell yourself much easier being aware of these pointers, keep adding to this list whenever someone mentions something you may not have been aware of. Your USP could be that your work is unique in that you use a technique you have created yourself over a period of years or a very old technique that few Artists now use. If you have been creating Art for a good amount of years, this is a great USP in itself, it states that you are obviously very competent and have years of knowledge in your particular field and don't forget to add experience gained - training or awards. Be careful how you word these USP's though as it may sound like bragging which can put some people off.
An example of how to price your art (OVERHEADS)
We are lucky in that our Art speaks for itself, but you should charge accordingly to ensure your business is successful - forgetting to incorporate the cost of your products and your time will not help your business grow, so ensure you have an idea of how long it takes you to create a picture, how much of your products you use to create it, any electricity used, postage and packaging any other possible costs (ie. Potter - water costs). An example of costing your work is to know how many hours it took you to create your portrait and decide how much you would be happy to charge per hour, taking into consideration the overheads and adding this in - times this by the amount of hours you took to create it. If framing is included, remember to incorporate these charges also.
Pricing - 'low prices will encourage more sales'
When we first start out running a Commission based Art business, we know we would be unable to go straight in with high prices as we would be lucky to ever lift our business off the ground (unless you are related to someone famous) and this will not help our business grow no matter how intricate our work is, but the misconception that charging low prices will encourage more sales could not be further from the truth - at the end of the day, charging too little is going to cost you your time and money and 'cheap prices' can actually deter people from booking work with you thinking low prices mean low quality Art (ie cheap products that fade over a short period of time etc.) be realistic and although it will take time before you start to see a profit, by ensuring that you are actually making profit rather than a loss means that your business will be successful in the longer term. Remember also that constantly changing your prices by either raising them or lowering them to try and encourage more sales in the current climate could impact negatively on you and your business. Dropping your prices may alienate past customers but you could always run special offers from time to time to avoid this.
Research other artists
It is a great eye opener to research other Artists, locally and on-line. Do not worry how many Artists there may appear to be out there, the most important person here is you. It is important to find out about local Artists, what they do, how they do it, what they charge and those Artists on-line have some wonderful websites that can give you lots of help and advice, the only thing you need to remember is this is YOUR business - do not think that copying another Artist and charging the same prices as someone who has the same Art style as you will work as they may have been in business for a number of years, with their own clientele and collectors, so simply use these prices as a guide and look into their background to give you an idea.
Circumstances - full time or part time business?
If you live alone, with bills to pay and no partner to support you, it is going to be extremely difficult and stressful to go full time in a new venture and speaking from experience, I would recommend that you put some time aside on a regular basis whilst in receipt of a guaranteed source of income to concentrate on building your new business. There are so many avenues you can take in Art but when you work for yourself, you have to put in the time and effort, knowing that it can take years before you are able to run a full time Art business and pay the bills comfortably with a little left over for all those 'luxuries' you want too.
The importance of a good website
I cannot stress how important it is to have a good website that works for you and your business. Having researched many websites over the years, I have seen many with unfinished pages, spelling errors, bad fonts/overuse of colourful fonts and gaudy backgrounds resulting in the loss of the important wording on the page and a whole host of other issues, I have also seen so many websites without an 'About the Artist' page or a personal photo or two of themselves, you have to ask yourself if you would be comfortable buying an expensive item from a website missing such vital information and if you wouldn't, why would someone else? Becoming a Commission Artist means you are offering a very personal service and ideally you should aim to offer a website that works well for you and the customer. My advice would be to get in touch with a local web design company and get your first website created professionally (or ask them to update an existing one) to ensure you have everything on there you need and can be found by the very people who are looking for your service.