4.26.2010

Marketing Mondays: The Dealer's Commission

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50/FIFTY

Recently I was looking over the feedback at The Vanity Gallery, a previous post that continues to attract reader comments. One comment caught my attention:
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“As much as I have a problem with vanity galleries, you aren’t exactly correct in saying that regular galleries don’t charge artists . . . actually they do and it’s called a commission . . . Money is either made up from or after a sale, but the artist pays one way or another.” *
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This is stunningly uninformed thinking, and it makes clear how poorly art students in the decades before 2000 were prepared for an art career. Indeed, many mid-career artists are still laboring under concepts like these. So today I want to talk about the dealer’s commission.
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Let me put it simply. I am thrilled that the dealer takes a commission because it means she has made a sale for me.
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The typical commission is 50 percent. The dealer is not scratching into my price. She is sharing in a price that we have determined together. Together. Whatever prices my paintings carry now—and those prices are uniform throughout the network of galleries that represent me—they are higher than when I first started out. The price is cultivated, year after year, based on my experience, exhibition history, collector base and bibliography (in other words, the resume), my sales history, and well, frankly, what the market will bear.
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The dealer is not cutting into my price. She is talking 50 percent of the retail price, which typically gives each of us the money we need to keep doing what we do.
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Now that I’ve been at this for a while, when I become involved with a new gallery, there’s really no discussion because the prices have been cultivated. (If you’re just starting out, you’ll want to probably discuss pricing with the dealer.)

Earning that 50 Percent
Sometimes the dealer makes a lot of sales, sometimes not so many. Either way, a good gallery will earn every penny of the split. She’s mounting a show, which requires taking out an ad, producing a card and perhaps a brochure or catalog, and providing food and wine at the opening. She’s also doing the PR that gets information about my work to critics and curators.


Beyond the exhibition itself, she’s maintaining an updated website, and she makes sure art consultants and collectors know when new work of mine comes into the gallery. She works actively to place my work into private, corporate and institutional collections. She's proactive in securing payment so that she can pay me. Outside of the gallery she maintains visibility via attendance at social events where she cultivates relationships with current and potential collectors. She may also take my work to art fairs.
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You make the art. The gallery sells it.
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The dealer does this not only for me but for every other artist she represents. To be sure, the artists who have higher profiles and/or who sell better probably get more of her time and attention, but the point is that all of this is part of what the gallery does to stay in business. If the gallery isn't actively working on your behalf, you have every right to wonder what, exactly, the dealer is doing for you. Before you pitch a fit, however, consider the dealer's overhead and costs, which is exactly what New York gallerist Ed Winkleman does in his blog post, The Logic Behind the 50-50 Split.
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Other Percentages
In that aforementioned post, Ed notes that some artists are able to negotiate a better percentage for themselves. Get famous and you can do that, too! On the other hand, I have heard of at least one gallery that takes a 60% commission from even its most famous artists (a certain venue on Sutter Street in San Francisco, perhaps?), but most galleries operate Even Steven.
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Lower percentages may be taken in some other situations
. Co-op galleries: around 20 percent, but the artist is supporting the gallery through membership dues, and she will underwrite much of the cost of the show. This is not a vanity gallery because the artist is an owner of the gallery, helping to determine policy and membership, and she will retain the larger percentage in sales
. Non-profit institutions: between 20 and 30 percent, in keeping with a community or educational mandate and, of course, the organization's 501 (c) (3) not-for-profit status
. Juried shows: between 20 and 40 percent, though 40 is high. These shows are typically underwritten by the entry fee. While a fee is paid to the juror, it's typically an honorarium rather than a fee that reflects the number of hours a working professional puts into the project; moreover, many institutionally affiliated jurors may do the job as part of their institution's outreach. So unless there’s a catalog, or a big-name juror has been paid a large fee, the gallery should not ask more than 30 percent. You’ve already paid to enter the show!
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What About Discounts?
Some dealers absorb the 10% “courtesy” discount, which has become fairly standard. Some dealers absorb the discount only if it’s over 10%. Still others ask the artist to split the discount, whatever it is. (And sometimes the prices are adjusted to accommodate that discount). The particulars are between the dealer and each individual artist.
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This post just scratches the surface of the topic.
If you want to understand more about dealer thinking, check out Ed WInkleman’s book, How to Start and Run a Commercial Gallery (my review here). If you're working with a gallery, have a frank discussion about the issue with your dealer. She won't resent it. Such a discussion may help clarify issues that have been hovering.
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As always, your comments are welcome.
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*Opening comment edited for space

16 comments:

Kesha Bruce: said...

I’ve never been one to complain about the 50/50 split---probably because I spent years working in sales and I know that gallery directors work hard for every penny they make. Is it going too far to think of the Artist/Gallery relationship as collaboration? I think not.

I can’t wait to pick up a copy of Ed’s book the next time I’m in the States.

Robin said...

Although I tend to agree with everything you said about a 'good' gallery and all the work they do, I still play devils advocate with the thinking that 50% can drive the pricing so high that sales are diminished.
I don't want to price myself out of sales especially in a changing market where so much competition is self run artists online without commissions and overhead to raise their pricing.

Philip Koch said...

I agree with Joanne- most dealers work very hard to make their gallery stay afloat, particularly in stubborn deep recessions like we're in now. It is worth it to work with art dealers in the long run. Artists can be good spokespeople for their own work, but there's a limit to how much any one person can do. We need partners to help us. If I hadn't worked with dealers over the years I'd have a much smaller base of collectors following what I do today.

Catherine Carter said...

I just mounted a show at a non-profit organization (fortunately, in conjunction with another artist who is very conscientious), and it drove home to me how much work the gallerist does. It took the two of us tons of time and effort - printing and mailing invitations, contacting the press, curating and hanging the show, setting up the reception refreshments, greeting guests, taking down the show, transporting the work, etc.

And in working with art consultants, I've found that they have access to clients that I don't. I've tried contacting corporations' art buyers with no luck, whereas the consultants I work with have sold my work to those same corporations that didn't respond to my contact.

So I believe that making/selling artwork is definitely a collaboration.

Maria Brophy said...

This is another way of looking at the 50/50 split, and I greatly value the opinions of seasoned artists. However, many artists I talk to are paying a 35% commission to their gallery, as do I. (They get 50% if they buy the artwork up front, not on consignment).
My logic behind 35% is this: approx. 20% or more of the retail price is actual expenses (supplies & framing). So for a 35/65 split, that seems fair. Example: A $1,000 painting costs approx $250 in expenses (out of my pocket). When it sells, my 65% minus the expense is close to what the gallery makes.
I know it's a lot of work for a gallery to sell art, just as it's a lot of work to create it. And most artists are not in a position to play the role as banker. When we decided to get out of that "banking" role years ago, our profits increased substantially.

Peggradyart said...

I've recently joined a working studio/gallery space where my studio partner and I rent a studio where we work in the back of the room and show our work in the front. After a few months of dealing with the public, explaining the work, answering a multitude of questions ranging from "where do you get your ideas" to "where is the restroom," asking people to please not touch the paintings, along with all the marketing efforts needed to get people into the space to see our work in the first place, I will never ever complain about a gallery's commission. Ever.

Jeb said...

While the art gallery is not the easiest way to make an income, I've run across gallery folk who are incredibly disorganized (ie. I received a frantic phone call from a gallery owner who lost my price list), dishonest (leased my piece out but did not pay me my share) and are simply reluctant to pay. Somehow these folks stay open and I put up because I need/want to show. (Besides, It's not like Mr Gagosian has been calling me lately). I do not begrudge the 50% but it's not like everyone in business is that good at it.

mariandioguardi.com said...

Hey Philip,fancy meeting you here! I totally agree with Joanne here too. A good gallery earns every percentage. I rather be making art than selling art.

Mead McLean said...

I've done the cooperative thing, the nonprofit thing, the traditional gallery thing, and a lot of diy over my eight year career, and I have to say that I love it when other people take care of the hundred little details that don't have anything to do with the work itself. It's great not to have to worry about cards, flyer, PR, title tags, image lists, mailing lists, printing things, food and beverage, etc.

But, like Jeb said, it really is terrible when someone isn't very good at it and/or doesn't do much for a cut of the sales. I really feel burned every time that happens, and it's almost impossible to back out when you've gotten to the stage where you notice that not much PR is happening.

I can't wait to have a dealer to work with on long term stuff. I figure it'll take a few more years to set things up the way I'd like them to go, and it seems necessary to have a dealer's opinion on career development.

Lady Xoc said...

I don't sell a lot of work, but there's nothing like that phone call from the gallery saying,"We've got good news for you..." Having done all the legwork myself for decades with disappointing results, it's a great to have someone else pulling for me. And let's face it, I don't have the address on 57th St; I don't have a rolodex full of bona-fide, vetted collectors; I don't have the time, wardrobe or budget to do the schmoozing, waiting, enticing and arranging that paves the way to getting someone to make the decision to buy.

I never stop trying though, always weighing the nuisance factor & dollar cost of all my various efforts which might just result in a sale, but will more likely fizzle unspectacularly. I'm not good at selling, it's not my job. I'm happy to pay someone to do it for me.

Karen Schifano said...

I'm old enough, though, to remember when the split was more like 30/70, then 40/60. Of course, we have to compensate the galleries for all the work they do, but sometimes I wish that artists hadn't given up so much in return.And I'm still not sure that the split should be equal...

Joanne Mattera said...

I also remember when the split was lower, but we need to remember that simply means that for the 1000you might want for a small painting, the dealer had to charge about 1400 then 1600 and now 2000. And if your price increases over time, too, then the prices would go up correspondingly. (Actually, add another percentage for the "courtesy discount" which has become standard.)

I would say that the biggest hurdle midcareer artists face is the thinking that we are paying the dealer when in reality, when a sale is made, both the artist and the dealer are getting paid.

Frank Wick said...

I have no interest in researching buyers for my work. I don't like the business end of this profession at all. I guess I would challenge any artist upset with this to either negotiate, find another dealer or start their own gallery. I suspect the truth of the matter is we know we struggled to get where we are and want all we feel we are entitled to. I don't make art for money and make it even knowing it can be a losing proposition. If I wanted money I would be a lawyer or military contractor. I'll get off my high horse with that one.

Lauren Litwa Holden said...

I am very happy to have someone else sell my work. Dealing with the public is an art in itself. It takes a huge investment of time and money to run a gallery. I'm happy to paint and if someone comes to my studio to buy a painting, that is extremely satisfying. But my work that sells from a gallery, I do not begrudge the gallery owner their percentage. It's all good.

Anonymous said...

What about if you have to split 50/50 with the gallery but you have to pay for all of the framing and then on top of that the gallery gives 20% discounts? The artists is left with only 1/3 of the value of the artwork!

Onge said...

How about a dealer that brings collectors to the studio but has no overheads such as premises? What kind of split should I expect on that?