I’m a henna artist who works a lot of festivals, and my friends tell me I charge too little. I’ve been doing henna for 19 years. I’m good, I’m fast, and I use very high quality ingredients. I am friendly and funny and welcoming in my well-appointed booth. I’ve written the only book extant on the history of henna, so I can talk about all sorts of interesting traditions. For those unfamiliar with the art, it’s drawing on skin with a plant-based paste that leaves a design that lasts up to a couple weeks.
Right now, my lowest cost design takes me twenty seconds and costs $.03 in materials, I charge $5 for it. A nice sized hand design costs 20-40, takes me up to ten minutes, and costs me .15 in materials. Of course there is also the cost of the booth space to be figured in, and the nice tent and rugs and tablecloths and books and signage and van all depreciate and need to be replaced once in a while, and gas is going down again but still painful. But even if the $5 design costs me a buck, that’s still a healthy profit. At most events, I do 5-10 people per hour in various combinations of designs.
The other henna artists in the area have a different take on things. The person who I just shared a multi-weekend event with charges half again what I do, sometimes more. I don’t know if I’m faster as I haven’t watched her draw, but I’ve seen the work she puts out, which is usually pretty good, although I’m better. I haven’t seen the color results she gets, so I can’t comment on that either, but I trust that she’s using good quality, or at least safe. I don’t think she does $5 designs. I shared an event with another artist last year who is fast and good and safe and also charges way more than me.
I feel strongly that henna should be an affordable luxury. My day job pulls in $11 per hour, and I want people like me to be able to afford something nice. I want the pre-teen on an allowance to be able to get a pretty design. I want a family to come in and get something for everyone. My goal is to have people fall in love with it like I did and come back again, and by and large they do, and they come back with more money and get bigger stuff they love more. Charging $75 for something that takes me ten minutes and costs me a dollar just feels wrong.
So I’m clearly undercharging if not undercutting, because people seem happy to pay the other people’s rates. Maybe I’m insufficiently capitalistic. I raised my rates last weekend and nobody noticed but me. It just doesn’t feel right to raise them any more, but neither is it right for the less skilled and experienced to be making more than me. So I need help coming to terms with pricing, and finding a path that I feel good about, and am making an appropriate amount.
Raise your prices. Offer discounted rates for students and large family specials.
I don’t understand your dilemma.
You’ve raised your prices to a level you feel comfortable with, and then say, “It just doesn’t feel right to raise them any more, but neither is it right for the less skilled and experienced to be making more than me.”
The less skilled and experienced care less about their skill and experience than the dollar amount they understand people are willing to pay.
You’ve increased your prices. So what you’re charging doesn’t seem to be the issue - it’s that others are charging more for ‘inferior’ work.
So what? The world’s full of overpriced crap that people are more than happy to hand over their hard-earned for. Either charge more than they do to prove the quality of your henna art, or sit comfortably with your current pricing because there is no competition.
I feel that you should charge what you are comfortable with.
I used to get a lot of flak when I picked up computer repair work on the side for not charging enough. What I found was that I charged what I was comfortable with, and the people I did work for never felt taken advantage of - something often not the case when it comes to computer work. Additionally, I would often get more money than I asked for. I appreciated that because people paid me more because they wanted to - not because I was holding them hostage.
YMMV, but in my situation it worked very well.
You can also have specific designs available for a special “festival” price, your $5 design and a simple hand design for $20-30. That way, folks of limited means can have something fun, but you can earn more for yourself from the folks who can spend more, and want more choice.
Also, don’t worry about what other people make, there’s always going to be some idiot out there making way more than you for doing squat. You need to feel happy about your pricing scheme.
Try and look at it a different way. Look at a year. How much to you spend on replacing items around your booth? How much do you spend on gas, materials, booth space and everything else? Then try and figure out how much time you spend either shopping for materials or sitting at the festival don’t look at just the time you spend drawing. Finally figure out how many drawings you do.
Take your total costs for the year, pay yourself 11 bucks an hour for your time, add in your taxes over that then divide by the number of drawings you do. That’ll give you the average price you should be selling your art for. From their restructure your prices so the weighted average of what you sell hits that. This doesn’t necessarily mean you need to charge more for your small work but you’d need to make up the money some where if you’re low. And who know you may find you’re over charging and get to cut your prices.
Tip jar?
Maybe just offering more higher priced options (15, 30, 45 maybe?) while keeping the $5 option. Oredigger77’s advice is sound, as well.
As an avid festival rat, I’d like to thank you for not being a jerk. (I’d also like to know where you’ll be this year, 'cause the mehendi prices at the festivals I go to have gotten ridiculous (really - $30 for a four inch stock butterfly? really?!), and I haven’t gotten any in a couple of years as a result!)
One way to handle it would be with a very generous sliding scale. That way you’re not pissing off the other artists, but you can charge what you truly feel to be appropriate. Or you could do a “pay what you feel it’s worth” approach; that seems to go over pretty well in festival culture. People actually tend to overpay a little bit in that scenario, but if that makes you uncomfortable, keep a donation jar and donate the excess to, oh, I don’t know, the First Aid Shack, so they can buy more bandaids and sunscreen? 
Or any charity of your choice, of course. (First Aid!)
I’m at all the Connecticut Renaissance faires- in fact one starts this weekend, where in the general manager will either perform an amazing escape trick or burn himself at the stake. It will be entertaining either way. It’s only the second year, though, so very small. I also do street fairs and other festivals. There’s links to all at my website, www.HennaDancer.com
There’s some really good advice on here, thank you all. I have added more to the higher end of pricing and complexity, and adjusted the rest so the curve goes up more steeply, but I’m keeping the accessible stuff accessible. I always have a tip jar out and well marked and seeded, but I rarely leave with more than 3% in tips of what I make in charges so that doesn’t affect me a lot.
I love it! Let us know how it goes. Sadly, CT is outside of my range. 
But I wish you much luck and success in whatever terms you define it for your upcoming season.
I think people assume that artists value there work accurately, and that if you are charging less than other people, the assumption will be that you are offering an inferior product. Most people aren’t going to get work done both places and compare.
Ironically, you may be attracting the people that don’t care about quality, just about price, whereas your competitor is getting the people that care about quality. If they are disappointed in the result, they aren’t going to come back next year and say “well, maybe the cheap lady does good work. The expensive lady sure didn’t”.
Do you have a line? If there is generally a line and people leaving because you can’t get to them, you probably need to charge more. If you have a lot of down time, you probably need to charge less, if you can charge less and still turn a profit.
If you want to reach out to people who can’t afford much, suggest they come back at a time when you are typically not busy, like late in the afternoon as the fair is winding down, or first thing the next morning, and offer them a discount then. If they can’t be bothered, they don’t really want it that much, and if they do, it’s a win for both of you.
Analyse your business model to see how much you are really making per hour.
How much do you make in a day doing henna?
Then take all your expense, including booth costs, gas, wear on the car, booth equipment costs (your tent and tables and the like only have a limited life, every time you use them you wear them out a bit - you have to factor that in as reasonably as you can and expense them to the costs). And whatever else is included, including opportunity loss, as in if you forwent a day at work at $11/hr that now is a expense.
Now figure out your hours, not just sitting at the booth and doing hena, but all the time needed, including putting your tent into the car, negotiating the booth space, clean up and storage of materials, obtaining consumable products, drive time.
Now figure how much you are making on a hourly basis. This will give you a idea where you stand, and for a artist and a work that is a outflow of your heart, you should get paid well for it.
The other side of it is to look at what others are charging (this part you have done already), as well as if you have advantages over them which will allow you to charge more, or reasons for you to charge less, such as a desire to have your work shared more.
Also consider the ‘quick’ henna that you do may be detrimental to your pricing as it may prevent people from buying more elaborate ones. Would you like more time to work on quick ones, or do you like the 20 second jobs? This would depend on how you want to work, if you like the quick ones, or if you like doing the more elaborate ones.
Instead of just looking at the costs strictly as the time you spend with the customer you may wish to look at it as a flat rate + time model in helping set prices. Using the McDonalds Extra Value meal as a example, they charge a Hefty change for the Big Mac EVM, but if you supersize it the charge for that extra is smaller - but still nets Mc D’s more $ per transaction.
In your case setting the price of the quick one closer to that of the hand one you may get more people ‘upgrading’, it may allow you to use a bit more time on the quick on if you desire to do that.
So I think part of your pricing should be what direction you wish to go, do you want more quick hennas or do you want to do more elaborate ones? By adjusting your prices you can adjust how many of what types you get to do - though you may need to play with the prices a bit to figure out the right mix.
This is a really good idea. If your highest price is higher than the other people (who are not as good), you will be advertising your quality through your prices. If your lowest price is still affordable, you will be staying true to your values (that everyone should be able to afford your work).
Amen to this! I love henna and think it is just beautiful, but there is no way in hell I’m paying $60 for a 10 minute hand design that’ll come off in a week or two when my real wrist tattoo-- the one that’ll stay on there forever-- was only $65.
Don’t get me wrong- I’m definitely appreciative of the skill you’ve acquired and the product you use. If I came to you and you had the prices you listed, I’d actually get some henna (unlike my usual sadness upon discovering the prices)-- probably a few things! Then I’d be sure to leave you a healthy tip.
So, if you do raise your prices, please don’t raise them too much. 
I like the scaled approach suggested- just make sure one of the $5 ones you offer is a pretty (but simple) traditional design and not just butterfly type things.
I really like the middle row all the way to the right one a lot … how much is that one? Something like that at Universal Studios theme park is $75, a simple 3 inch lotus is $20, to put things in perspective [and the mhendi artists there were busy, they each had a line waiting at those prices.]
Aruvqan, what are you referring to?
On the page of henna pictures, you have a palm on the middle row of pictures, all the way to the right that has a fairly intricate palmate image [or perhaps a mango?] that I like.
Are you making a profit? Are you happy?
If the answer is yes to both of those, don’t listen to your friends.
But I’m very impressed with your work.
Aruvqan- are you talking about a page on my website? If so, I have several pages of pictures, so I don’t know which you mean. Either way a link would be useful.
Zebra- Yes, I am making a profit, but am I making enough? Happy? Well, I like creating stuff, and I like it when people let me play, and I like it when people tell me they love that they can afford my prices, and I like it when they go away so thrilled with their design that they bump into stuff because they can’t stop looking at it I don’t like it when people ask what my “cheapest” design is. I don’t do cheap. I do ones that cost a small amount but are still quality work. Actually, the $5 designs cost the most in terms of what you get for what you pay.
I think the question of what market I’m aiming for is a very good one. By starting low, am I encouraging people to get smaller, less interesting for me and them, common designs? Part of the issue is that I really am “an artist” with this. Anyone can be taught to copy patterns. I want to create. I want to make a design that just dances on the skin and lives there and suits the person perfectly. I don’t want to give a fake tattoo. I have a sign up about how to choose your design, and my booth help also tells people that your best bet is to tell me what kind of designs you like and give me a budget and a body part, and you’ll get original art designed to suit you. Or you can pick from the book, which is prices-as-marked. Maybe one in 20 lets me play, and they’re the ones that spend the most, although I could just as easily create for $5.