70/30 Gallery Split

Well, I'd say there's a better argument for a 70/30 gallery split than the 70/30 - 90/10 stock agency splits that exist today.

The question is one of transparency. Does the extra 20% go to things that generate increased sales or straight into the gallery owners pocket?

I would think this would encourage more buyers to buy directly from artists. Knowing that 70% of the price you pay goes to a middle man would make me want to shop more at art fairs.

TL; DR.

But it depends on the setting and on the item being sold. An artist selling framed prints would have to charge very high prices to cover costs and still make money on a 30% portion.

A prolific artist selling unframed originals, this might work out just fine.

Heck no!

I like this quote:

"It’s not enough to be a great curator. In today’s gallery world you need to be a real estate agent, a lawyer, a politician (to get into fairs), a marketing genius, a salesperson, and a visionary."

Like its different than any other small business. Like a restaurant:

"It's not enough to be a great chef. In today's restaurant world you need to be a real estate agent, a lawyer, a politician, a marketing genius, a salesperson, and a visionary. Plus a personnel director, a regulations expert, an immigration expert, tax attorney, insurance expert....."

David-

If the piece sells in a gallery, that means the gallery generated the sale. Given the gallery's overhead costs, 70% isn't really to much to ask since the artist did not spend time (and time is money) to sell the piece.

I can understand why you are coming online to sell now MD.

Edward-

I only sell a few originals online since they (in my opinion) are not worthy of a gallery showing.

If galleries start demanding 70% they will no longer have an oversupply problem.

Galleries need to understand that they are just a 'middle man' and if they keep demanding higher cuts, they will be eliminated all together.

Those of us who have dealt with the stock world have heard the little boy cry wolf before. Usually its because the share holders demand more money. Always comes out of the pocket of the artist.

Here is a novel idea - become a better business person or go out of business. Can't control your costs? Can't compete with the competition? Bye bye.

I'm unsure about this but it seems if 70/30 became the norm, I might also expect to see prices as a whole go up to cover the losses to artists now enjoying the 50/50. I'm pretty sure some galleries already make have a 60/40 split. I don't know how many do it. The average pay scale for most artists is still far below what almost any other profession can claim.

Edward,

While every business venture has multiple difficulties, I can not make the comparison to a restaurant. Everyone eats and almost any or all of us eats at a restaurant if only on occasion. Less than 10% (my guess is less than 5%) of the population will ever walk into a gallery let alone buy anything once there. It's apples and oranges. I don't think running a restaurant in any way is easy but I know running a successful gallery is even more challenging since the demographics are so limited for the art market.

I think we are seeing a shift in the general art market. Already the average gallery in some studies is selling as much or more art online than in their brick and mortar locations. Oddly enough some selling (sight unseen), appalling to me. I assume that is for established and branded artists. Artists are more and more selling direct not through galleries.

Restaurants have a much higher than average business failure rate, just like galleries. Success in any business is hard to find. Though I suspect galleries don't see any more competition than restaurants. While far more people go to restaurants than galleries there are far more restaurants than there are art galleries. Actually, the biggest competition art galleries have now is from the artists themselves, artists just are not nearly as dependent on galleries for sales as they have been in the past, with the exception being the real high end, where prices start at 10K and quickly rise from there, but those galleries are already very few and far between. I know a successful artist that sells 70% of her paintings direct, and her paintings are far from cheap.

David-

"the average gallery in some studies is selling as much or more art online than in their brick and mortar locations"

Many of the top online sites are only open to galleries or dealers and not to artists. So a gallery is the only way to go if you want to reach the money people.

I don't really know about what it takes now much less what it will take in the future to reach the money people, I suspect I'll never know. lol It's true, selling a $10k painting online direct is a very unlikely proposition, that's why I said that level is still the gallery's world. I'm not necessarily talking about online though, there are other ways to market direct. While I've only had two sales of original paintings locally they were not through a gallery, but they were pretty cheap. lol

I would if the gallery is high profile and able to sell my paintings for millions each.

I've already slowed waaaay down on the galleries that take 50%.
Maybe I'm wrong, but I don't think most galleries do that much promoting of artists. The galleries promote the galleries, and the aritists basically ride the shirt-tails of the overall gallery promotion.
Most galleries work the way FAA works. If you're an "up and coming" artist who does not yet have a "name" you mostly have to promote yourself -- they provide you with display space, you bring in the customers. If you're successful at that, and your art starts to pop off the gallery walls, the gallery owners will jump on the bandwagon with you.

If a gallery actually starts selling my art for millions, and the gallery (not me) is doing the work to make me a star, I might consider 70%, or whatever they want from me to continue doing the great job they're doing of promoting me.
If a gallery starts selling my art for millions, and I'm doing all the work to promote my art... I'm going to the gallery that gives me the biggest cut.

Galleries don't need to purchase any inventory!

If you are pricing a work at $5000 for sale direct to a buyer, and a gallery marks it up to $10,000 (50/50) your take would be $5,000... but at 70/30, your take would be $3000.

If the gallery keeps the price at $5000, your take would be $2500 (50/50)... or $1500 (70/30).

This is why many artists do not sign exclusive contracts with galleries... so that the artist retains the right to sell direct and at the same time benefits from sales/promotions by one or more galleries, keeping some pricing consistency. There are a lot of variables, however, including different commission rates based on sales volume. Most informed buyers know that gallery markup is 50% or higher; so, there are instances where a potential buyer sees a work in a gallery and then contacts the buyer in hopes of buying direct at a reduced price. Some artists establish a "part-with-it" price based on numerous factors (including trying to not sell work produced at less than minimum wage).

If a gallery that represents you finds out you are selling paintings at half price direct they will drop you like a hot potato and tell everyone they know how unethical you are. Retaining the rights to sell direct doesn't mean you can undercut your gallery without consequences.

Agree, David. That's why it's important to know exactly what you can/cannot do in a gallery relationship.

I knew of one artist (high prices/high volume) who would share a portion of a direct sale with his gallery even though the buyer had no contact whatsoever with the gallery.

I would if the gallery is high profile and able to sell my paintings for millions each.


Alfred,

Very good take, but.....

The suggestion of a new split is not because the galleries might succeed. It is because they are failing.

Dave

I have to think that a gallery that can't survive on a 50/50 split won't on a 70/30 either, in other words it's not the size of the commission that's the problem, it's the salesman.

David-

"it's not the size of the commission that's the problem, it's the salesman."

When I enter a gallery in search of art, I expect a short greeting at the door. I expect to view pieces alone. To allow the piece to talk to me. Not to be bothered by a salesman peddling his or her wares. If I have any questions about the piece I will do my own research. Not allowing for possible misguided hype.

No marketing or sales pitches *however grandeur" will ever sell me a piece of art. In fact, salespeople turn me off.

If You as the artist who created the piece get less than 50 % it is exploitation. 50 % is an ethical limit in my opinion.
If nobody signs such things they could not get a immoral part of the cake.

It is like microstock: all starts with self exploitation. Don't devaluate Your own work. Also today You may find a gallery with 50/50 if Your art is good.

I was one of five guys that formed a syndicate and we owned 7 restaurants/sports bars, some of you already knew that. I also owned three art gallery/frame shops for years, and I am sure you are tired or me reminding you of that.

One gallery was twice as much work as all seven restaurants combined.

I don't mean to put down people that wait tables or work in restaurants, but the qualifications are totally different then the person you can put in a gallery.

And the hundreds and hundreds of customers are not near as difficult to deal with as couple dozen artists.

Need I go on?

There is just no comparison at all.

One again I implore you to take a business class or two!!

This is not about art and art is no exception. This is about basic business principals.

Most gift shops, jewelry stores and other shops of this nature cannot survive with less than a 50% mark up on their products. Or "keystone" as it is referred to. Art galleries are no exception.

Every artist should have a whole sale price and a retail price. Those prices should allow for that 50% markup. You should not jack up your prices to cover that commission then sell other places for what amounts to wholesale to the public. You are screwing the gallery and YOUR buyers that buy through the gallery. That integrity thing goes both ways.

I don't know of anyone that is asking 70% but I do know of several really good galleries that have a lot of great artist begging to get in. So would they be willing to pay 70%, I don't know.

I know I had artist willing to pay more to get into my galleries, but I would not do that.

'I know I had artist willing to pay more to get into my galleries, but I would not do that.'

So You are one of the ethical ones Floyd !

I don't know about the 70% commission thing. But let me tell you what is happening.

A lot of first class galleries are moving away from dealing in originals.

They are turning to the major publishing houses, getting a dealership and selling high end Giclees. Some of these artist have nationally known names and the publishers have ad campaigns going on that the gallery and the artist benefits from.

I sell for many of these publishers on the Internet. It is the bulk of my business and has been for 15 plus years.
They are dealing directly with the publishers and not having to deal with the artist directly at all. That takes a lot of headaches out of the game all together.

Another thing it does is it guarantees price integrity form the artist and the dealer. The artist is not out on the street corner cutting the gallery owners prices.

Also if you buy in quantity, you can get more than that 50% profit margin.

One other thing. I don't know who made the comment, but when some one asked me what I did with my profits as part of negotiating the consignment of their art, they were politely shown the door.

What the artist does with his/her profit is none of the galleries business. And what the gallery owner does with his/her profits is none of the artist's business.

"I would if the gallery is high profile and able to sell my paintings for millions each."

If your work sells for millions, you´re either dead, or the galleries accept what you are asking for. 😎

Floyd,

Thank you. You have changed my mind and what would have been my comments here with your educating us.

I know some galleries in some locations are having major problems.

I did not know that galleries with better names are turning to the publishers. What is critical to me is what I do further down
the road with my art. If at some time down the road my art becomes more acceptable to the public for hanging, then I might seek out a publisher.
Such an avenue would give my art a second life some years from now.

I greatly appreciate your discussing this here.

Dave

Floyd-

"A lot of first class galleries are moving away from dealing in originals. They are turning to the major publishing houses, getting a dealership and selling high end Giclees."

Of the galleries I have spoken to who sell Giclees the majority agree they do so because:

The original has been sold
The original is on permanent display
The original is to expensive to handle
Giclees are more affordable

Colin-

""I would if the gallery is high profile and able to sell my paintings for millions each."

If they're not selling for half that now, how do you expect a gallery to sell it for double?

I deal with a few artist that are no longer even do originals with the intent of selling them as the profit center. Then there are those that work directly with the marketing people at the major houses and create a piece that together is something they want to paint and somethong the publishing distributor feels they can sell.

A lot of these artist used to do 24x36 canvases and much larger. Now the are doing 16x20 or smaller because they are much easier to handle for getting a file produced.

Giclee printing has made a lot of changes in how art is being created and sold way beyond POD as done on FAA.

I sold a total of six Andy Thomas prints this week published by Somerset that have not even been printed yet. Signed and numbered, limited editions, 18x24s. $299 each. The money is in the bank already. I have more than 50 percent profit and the whole deal was done in about ten or 15 minutes, my part of it.

That is what is going on in "the real" world, out side of FAA.

That is not a knock on FAA. Sean has created an incrediable thing here. The thing I get the biggest kick out of is the people that mock me when I say advertising is the key to selling and selling is the key to success. FAA only exsists because of what Sean was able to do by getting tens of thousands of members to do huge mass marketing campaigns for free for his business!!

That advertising campaign has sold each and every member on getting involved with FAA. But yet there are some here that say advertising don' t work.

What does this have to do with gallery commissions. Well just maybe, gallery owners no longer have to deal with artist in the traditional ways of the past. Maybe they can get 70 percent or let them walk.

I have several dealerships with hundreds of artist, all kinds or art. And I never have to talk to an artist that has no idea what reality is in the business world.

Floyd-

I personally would prefer to sell Andy Thomas's Battle Of Ingalls for $65,000 than to dabble in prints.

Floyd-

Andy Thomas's Spotted Tail's Band Races the Union Pacific (24 x 36) has just been received by a gallery today and is now for sale. The piece is owned by a private party and is on consignment.

Okay, Danl, I'll rephrase. A gallery that can't make it on a 50/50 split is not going to make it on a 70/30 split either. It's not the size of the commission it's the effectiveness of the marketing.

BTW, a good salesman will quickly recognize that you want to be left alone and will leave you alone. A good salesman will also quickly recognize that you are the type that does want to be sold to and will hang by making suggestions and answering questions. I'm with you, I hate pressure type salesman, but I'm not everybody.

Okay... not sure what your point is. But that's okay with me.

I don't sell originals any longer. Been there done that. It is much easier to sell the prints and only have to deal with a professional sales rep that gets it, instead of dealing with individual artists that don't. There are some exceptions to that. I still sell for several individual artists. But pretty much have dropped the rest of them.

I hope you were not insinuating Andy was one of them that no longer did large originals if that is what you are implying.

"Okay, Danl, I'll rephrase. A gallery that can't make it on a 50/50 split is not going to make it on a 70/30 split either. It's not the size of the commission it's the effectiveness of the marketing. "

BINGO!!! That I love! That is so true!! The part of (probably) not going to make it on 70/30 split unless he has effective marketing.

The thing that I think of is what is the quality of the art where the artist that has to give 70%?

David:
If a gallery that represents you finds out you are selling paintings at half price direct they will drop you like a hot potato.

Agree. Undercutting you galleries is a very bad idea.

Floyd, how limited a run are these publishing houses dealing in out of curiosity?

Depends on the artist. They are all over the place, all different. The guys that are the top sellers will release smaller numbers at higher prices.

Here is the latest release from one of the top artist that I sell:
Giclee on Canvas - Artist Proof
Dimensions: 28 x 28
Release Date: 9-2015
Edition Size: 15
Issue Price: $1,095.00

Giclee on Canvas - Signed & Numbered
Dimensions: 28 x 28
Release Date: 9-2015
Edition Size: 150
Issue Price: $895.00

This is the same image.

Here is another one.

Giclee on Canvas - Artist Proof
Dimensions: 30 x 40
Release Date: 4-2015
Edition Size: 50
Issue Price: $1,750.00

Giclee on Canvas - Signed & Numbered
Dimensions: 30 x 40
Release Date: 4-2015
Edition Size: 295
Issue Price: $1,350.00

You can go to FrameHouseGallery.net and see for yourself.

Some will do runs of 350 or 850 and they could be higher or lower. Same thing with prices. All over the place.

I will not handle anything that is not at least $300. Not worth messing with.

I have dealers that want to offer any number of artist but I don't do it because they are not expensive enough to mess with.

That is of course unless I can buy them in volume and get a huge discount.

Cheryl-

Since there is only one original, how can the artist undercut the gallery?

I bought a S/N Le Cirque By Marc Chagall for $800 a while ago (with papers) from a local gallery. Other galleries were selling it for $3,000 to $5,000. I sold it a week later at auction for $2,000.

It is not the artist undercutting. It's the galleries that do the undercutting.