Friday Tips: The Gallery Consignment System


 The Gallery Consignment System

When I opened my gallery, in 1991, I was naive about the art business, three inches above broke, with little capital and no experience.  What little capital I did have, I’d saved from running a tree service for eight years.  Why a tree service?  Because I had to remain free to write my novels, which I never could have done if I’d been scribbling promotional copy for corporations—though the money would have been better.

So I opened the business, my capital was gone in three months, and my spiral into debt and near-bankruptcy began.  I’d always worked long hours in the tree business; now 70-hour weeks became the standard.  It was either that or file, and I wasn’t going to file.  Not until seven years later did we start to turn a reasonable profit. 

But the one thing that allowed me to stay open in this fickle market was the consigning of artwork.  I didn’t invent the system, I was just told that that’s how it was done.  So on a 50% split with painters, 40% with ceramists and steel sculptors, and 33% with bronze sculptors, I began to take on work.  Why the different percentages?  Because these artists have different levels of expense, and broke though I was, it would have been unethical to take the same from a bronze sculptor that I did from a painter.  This is still my policy, though few other galleries agree with it.  It is also my policy to increase each artist’s prices to the highest level that the market will bear, so that they profit.

What did these artists get in return?  Sales, my growing skills as a dealer, insured works, annual shows that I paid for, marketing, advertising, articles in papers and magazines, a nice space in which to show, and contact with my expanding circle of clients.  They also got my counsel.  Had they not consigned their work, and insisted on selling it to me, I would have gone bust, and none of their careers would have advanced.  It was a joint effort; it still is.

In the Western World, only about 7% of the buying public collect original art, regardless of the price level.  Selling art isn’t like selling clothes in a department store, where you buy the items wholesale, then count on the vast demands of the public to buy your inventory.  Everybody buys clothes; very few people buy art.  Hence the majority of inventory in any gallery never sells.  Dealers must also constantly experiment with the market in determining what they can and can’t sell.  As they do this, they deal with annual overheads that vary from $120,000 to $100,000,000, depending on the gallery.

Ideally, all artists should be paid a wholesale price for their work, with the galleries turning it over at a retail profit.  Unfortunately the very slender level of demand would force most galleries out of business were this a standard practice.

If I were a visual artist, I would like to see the consignment policy banned; I just don’t think this is realistic in view of the limited market.  Besides, I am an artist—a novelist.  I wrote for 25 years, endured 177 rejections, and went through two agents before getting published.  I’ve written ten books, or three million words.  Believe me, I know how it feels to be saddled with an impecunious calling that you have no choice over, and for which you sacrifice so much.  I would love it if agents would buy my books, then sell them to publishers in turn.  Unfortunately, that isn’t realistic for their market either.

The consignment system is flawed, to be sure.  I didn’t invent it, but since it’s in place, it’s my job to utilize it ethically.  When an artist signs with me, they’re not just consigning works that we hope we can maybe sell; they’re entrusting us with a career to advance, the same way an agent does for a writer.  If my gallery fails in this—since you can’t succeed at it every time—we discuss what to do about it, and try to act. 

There are plenty of dealers who take advantage of the system, never pay their artists, leave town with the art, don’t pay for the shows or marketing, charge criminal percentages, and should be locked up like any other crook.  They’ve always been around, they always will be.  I can’t change that.  But I can try to educate artists on the differences between ethical and unethical dealers, which is why I write for a variety of magazines, why I wrote Living the Artist’s Life, and why I’m now finishing a new book that broadens the discussion.

The truth is, the market realities place stresses on both artists and dealers, which explains why 80% of all galleries go broke.  Until there’s a larger market for art in a world that places greater value on new cars and sofas than art and education, we will continue to deal with this issue.  But at least we get to live this life on some level; for 90% of the world’s populace, that isn’t even an option.  I always try to remember that; it helps keep things in perspective, and the gratitude in place.  

11 thoughts on “Friday Tips: The Gallery Consignment System

  1. I’ve never minded the 40% – 50% to the gallery — they free me up to paint while they deal with the selling. It seems reasonable to me in order to protect my painting time, and like I always say: Let the painters paint, the framers frame, and the sellers sell.

    And yes, while I have been screwed by ethically-challenged gallery owners before, my experience with them, for the most part, has been postive. When it works, the respect and sense of relationship flows both ways. When it doesn’t, it just means it’s time to move on. Life is too short to kvetch away — get creating, instead.

    Good post, Paul.

  2. Nicole: I couldn’t have said it any better. Damned nice work, by the way. Beautifully understated. It should do well in the right galleries in CO, NM, WY.

    Kvetch. You’ve taught me a handy Yiddish word. Spanks.

  3. If my plot for worldwide domination has to begin in the three states — so be it. LOL

    Seriously, thanks for the encouraging words about my artwork; it is much appreciated.

    I put a link on my site to this blog — I hope you don’t mind, but if you do, let me know and I’ll remove.

  4. The greatest value to me in a gallery is less about dickering between 40% – 50%, and more about if they actually move the work. And, in that vein, if they can sell regularly, and not just fits and spurts.

    I like that you hold the gallerist’s feet to the flames for developing the artist’s career. If I were completely self representing, I’d have to be better at developing my career and name. As it is, I feel a tremendous enough burden for that already.

    Good food for thought. Thanks, Paul.

  5. I have always found it far easier to sell my artwork on my own than depend on art galleries. I have made a good living as an artist for over 10 years and have sold over 2000 original pieces of artwork during this period. I would say that 95% of these sales were accomplished at venues other than art galleries. All you have to do is produce quality work and stay in touch with your client base, keep them informed to what you are up to. People will respond if you show interest in them and what is going on in their lives. Most gallery owners far way short on keeping up with the details of running a business period.

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