I think I am not the only artist who finds pricing work difficult. I have no good answers to offer as I mostly avoid the question. I put very little emphasis on selling my work and concentrate on teaching and speaking for income.
The question recently came up on the Book Arts List and Randy Asplund (previously profiled on Book Arts Tuesday) wrote this excellent response. He kindly gave me permission to share it here.
As an artist who does that as my only job, let me offer some advice. It is my experience that it is best to just decide what you think you need to earn for the piece. That becomes your wholesale price. If it gets offered in a gallery, you look at the gallery mark-up and that is the price that both the gallery, and later maybe you will offer it for. Yes, that means if it sells you get a substantial bit more than you "needed," but you should not undercut a gallery, and you can't let a gallery sell it for the price you would need for it because they have to mark it up.
For valuation, many think they must price work for what the market will bear. In most cases for art, (be it book, sculpture or whatever) the "market" price is an illusion. Your market is whoever will buy it because they want it. They trust YOU to set the price and if they can afford your price they will buy it -IF you act like you believe in the price.
If you price it low, it doesn't matter how low you go. If the people seeing it don't want it, they won't buy it. All you did was give it away cheap to the person who did want it. When you ask what you think is a reasonable amount, if someone wants it AND they can afford it, they will buy it.
I price my art by looking at my time and materials costs first. Then I modify by whether it is a collectible product like a Start Trek cover, etc. If it has some other unique special quality I may raise a little based on that. I also modify the price based on how successful I feel the piece is. If I pull off a masterpiece, I raise it some more. If I'm not too happy with it, I may lower it.
If nobody buys it, it isn't because it isn't worth it. It just means the person who wants it didn't happen to discover it yet. Do a better job of advertising. Find the RIGHT buyer.
Insurance will want to value your work based on either materials cost OR based on similar works having been sold. It is very discriminatory against creators. Sometimes, in the case of having to pay on a loss, they may even try to confiscate your damaged work, claiming that they paid for it, so it is theirs. That's total BS. Its not what insurance means. Read your agreement very closely, and don't accept bad terms. And if you are selling in a gallery, make sure the policy covers loss of your work, and that YOU are the payee. I got burned that way once. The gallery said they had insurance. They did, but it didn't cover any more than the building!