Marketing Mondays: The Dealer's Commission

.

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:
.
“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.” *
.
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.

.

Let me put it simply. I am thrilled that the dealer takes a commission because it means she has made a sale for me.

.

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.

.

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.

.
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.

.

You make the art. The gallery sells it.

.

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.
.
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.

.

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!
.
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.
.
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.

.

As always, your comments are welcome.

.

*Opening comment edited for space