You don’t need an economics degree to understand the pricing strategies of art galleries. One of my former dealers — no longer in the business — noticed that a very high percentage of gallery visitors just came in and went out. Painting sales were so infrequent he had to do something about it. Thinking price was the problem, he introduced a lot of cheaper items into the gallery — ceramics, souvenirs, knick knacks. The number of sales rose but total dollar values declined. The few “anxious wallets” who did come in simply satisfied their need with less expensive items. This situation is called “Collapsing Floor Syndrome.”
On the other hand there are galleries that test the high end. This generally involves “name” and “dead” artists as well as “investment” art. Dealers may even compete with one another to see who can get the highest prices. Supply and demand play a part in this environment, but it has to be said it’s good for living artists to be associated with the high-end artists. Simply stated, this implies that someday your work will also be worth more. The downside for artists who work with high-end galleries is that a gallery may lose interest in the promotion of less expensive work. This situation is called the “Sky-High Ceiling Syndrome.”
There’s lots of gallery talk these days about “price points.” This generally implies a range of prices in a given gallery to suit all wallets. Many clients come into galleries with an idea of how much they want to spend, and it’s the gallery’s job to show them something in their chosen range. The variation in gallery capability in this matter is astonishing. Just as some artists have no business selling their stuff, some galleries show little or no natural talent as to how art placement works. This situation is called the “Haven’t Got a Clue Syndrome.”
From an artist’s point of view, it’s probably best when an artist’s work is in the middle range of a gallery’s prices — neither falling through the floor nor pushing at the ceiling. Beginning artists are better off at the lower end, while mature ones can be nearer the top. It’s all to do with provenance and confidence. Ignorance of this understanding can be detrimental to galleries as well as artists. Perception of quality aside, proper pricing in a gallery and consistency across your stable of galleries is vital to your continuing to thrive.
PS: “The price of anything is the amount of life you exchange for it.” (Henry David Thoreau)
Esoterica: What has this got to do with the joy of making art? For those of us who also choose to make our living out of our joy — everything. Without a significant cash flow, an artist simply cannot travel, grow, learn and maintain the day-to-day peace of mind to continue. It’s a good idea for those of us at the creative end to re-examine gallery relationships from time to time and favour those who meet our current needs. Loyalty works both ways in all seasons, of course, but an understanding of basic economics and the wisdom to make small commercial decisions have a lot to do with keeping us happy.
This letter was originally published as “Price floors and ceilings” on October 26, 2007.
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“I was very embarrassed when my canvases began to fetch high prices. I saw myself condemned to a future of nothing but Masterpieces.” (Henri Matisse)
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