Why do galleries take so much commission?
July 1, 2022
It’s the question that comes up the most often in conversation about art sales, ‘why do galleries take so much commission?’ It is a bone of contention that can stifle a fruitful relationship between artist and gallery before it’s even explored, let alone begun. So, let’s talk about commission and get the matter straight, once and for all.
The question on commission is a fair question to ask. It’s also a question that you should understand the answer to fully if you want to sell your work through a gallery or any outlet, for that matter. The first point to establish here is that creating art to sell is a business. Art galleries are a business. You, as an artist selling your work, is a business. Every business can only exist if it generates revenue and profit. The art business is no different to any other. With that in mind, here is the basic outline of economic trade.
Every product has a manufacturing cost, a trade price and a selling price, from a bar of chocolate to a diamond ring. It’s the basis of economics. Everyone involved in the chain makes money so that they can continue to spend money which keeps the economy turning. THERE IS NO OTHER OR BETTER WAY TO DO IT. Some have tried and always failed!!!!
The average markup on retail products is 50%
Art is no exception to this, nor should it be. It’s a viable and valuable asset to the world’s economy. Treating it to any degree less than is doing not just the art but the arts community a huge disservice. Expecting it to be treated differently, likewise. If you are going to enter into the world of selling your artwork you need to engage fully with being part of the economic system. There is a cost involved but if you pay close attention and implement an effective strategy, you will profit.
So, with that in mind, let’s clear up some common myths about commission
Commission doesn’t benefit the artist
Yes it does! Commission provides the opportunity and circumstances for the art to be shared with an appropriate audience and sold. It covers the cost of executing the sale from the expertise to the processing of the payment, a cost incurred by the artist on direct sale also. The benefit is, the artist doesn’t have to spend the time on creating the opportunity or circumstance.
50% commission is too high
No it’s not. As mentioned above, it’s standard on all retail products. There are a myriad of costs that go into exhibiting artwork and representing an artist. The commission has to cover these costs and include an amount of profit. Businesses can’t operate without profit to reinvest in that artist and the facilities on offer.
You can add the commission on top of your direct retail price
You CANNOT! This defies the basic premise of sales ethics. No consumer should pay twice the price of another for a product and none will. By making your gallery price double your direct price will not result in growth of collector numbers and will create massive confusion about the value of your artwork. This is an issue that has irreversible, detrimental effects.
And now to answer some common questions:
What is commission used for?
All the basic running costs such as; light, heat, rent & rates. Plus all marketing costs; advertising, website, social media. As well as sales processing costs including; payment facilities, packing, shipping. Not to mention the sales expertise; an informed representative for the one to one client experience and the expertise to nurture an audience for the work. The list is endless.
But I have heard of or been offered lower commission. Why can some offer it and others cannot?
There are three main reasons why a lower commission rate might be offered;
1. The main focus of the business is not art sales. For example, a restaurant might offer exhibition space to artists. The profit in that case comes from food sales.
2. The business may be subsidised/have external funding and therefore non for profit. Once again, the focus is elsewhere in terms of creating funds to run the business.
3. The business requires additional charges to exhibit the work such as application fees, exhibition fees, sales processing fees.
In other words, a cost will be incurred elsewhere in the process if the commission is lower than 50%. It might be lack of sales where the venue staff aren’t motivated to sell on your behalf or a submission/exhibition fee. Ultimately, you’ll end up spending the same or more to make the sales in cases where the commission is lower.
Galleries are motivated to sell. It’s where the money comes from to build the business.
Consider it this way, you’ve ploughed all your energy and talent into creating beautiful artwork. You and the work deserve that same level of expertise and dedication when it goes on exhibition for sale. That’s what the commission is paying for.
It can be difficult to reconcile why galleries take so much commission when you don’t understand what it’s for or what the benefit to you and your practice is. At the end of the day, the decision is yours as to whether you want to have your work exhibited by an agent, such as a gallery. It’s a decision that you should spend time considering. Weigh up the pros and cons. Ask yourself what the goals for your art business are and if having your work in a gallery will benefit of hinder those.
Always remember that your art business needs investment to flourish. A lot of that comes from you, in creating the work, but you don’t and shouldn’t do it all alone. Seek out collaborators and assistance to figure out the best solutions for sharing your work with the world.
Want to chat about your goal for your art business? Check out how I can help or let’s have a chat!
Add a comment
0 Comments