Dealer padding

Some artists do the reverse, they’ll undercut their dealers when they sell from their studios. Makes it difficult for the dealers.

A agent in our area used to pad the art…and the frames. The sales were almost totally to commercial organizations and the agent was pure middleman, albeit a necessary one who could reach large corporations that would be very difficult or impossible for an individual artist to do. We got our stated percentage cut of the sale, so therefore had no complaint on that score. However, other dealers and galleries at the time were, of course, put off. So were most of the artists and framers who dealt with this agent. A lot of sales were made though and we did get our stated cut. I guess the answer then would have been, how much of this is an artist going to put up with for the good money involved?

I am surprised and disgusted that this slippery practice goes on. Prices are prices and should be the same for everybody. Tell Anonymous to tell the guy to take the noon balloon to Rangoon.

Not knowing the details, it is certainly possible that the artwork is underpriced, and that the dealer has a better feel for what the right price is. In some cases, it’s well known that people will not buy a lower priced item, because they perceive it must be of lower quality. There is strange psychology involved with finding just the right price.

This kind of behavior doesn’t surprise me. Choose your galleries wisely. What surprises me is galleries think artists are corrupt and ready to cheat them. It’s the pot calling the kettle black. Fairness isn’t a consideration when it comes to money with galleries. I constantly read where galleries have all the overhead and artists get everything at NO cost. It’s time we live in the real world folks.

Regarding your quote from John Ferrie, “Perhaps the Internet is the wave of the future and the gallery will become obsolete,” Dealer padding, Feb. 17, 2012: I hope not. When that happens, paintings will have descended into some form of hybrid art/decor. If you visit the Metropolitan Museum online, you will not experience the scale, volume, luminosity, nuances, mysterious and powerful forces in the paintings that landed them there. My own paintings online show the subject only. You can’t see the small strokes, opacities and transparencies, undulation of colors, surface luminosity. You can’t see their physicality. Buying art online is like buying a mail-order bride.

Let’s say one is an emerging artist facing the monumental task of finding a gallery. Let’s do some homework. I live in a very large city with a vibrant art scene with LOT of galleries. But, surprise, on closer inspection and checking references there are less than 10 that have respectable practices, move the work and have figured out how to survive. The rest barely sell anything and will go out of business sooner or later, probably with unpaid bills and lost paintings, so let’s forget about those. Let’s say there are 10 good ones and in the best case scenario, each will take 20 to 30 artists — let’s say 50 to be unrealistically generous. This means that our large city with the vibrant art scene will provide for gallery sales of 500 artists at the very most at any time. Of those 500, 90% are established artists with good track record. This leaves about 50 seats for emerging artists, which includes those from the city and from anywhere in the world that these galleries decide to represent. This is a meager opportunity for us who are starting out. I have been in a few B rate galleries over the last 6 years, most of which closed down after couple years of operation. In the last couple years I finally made it into a good one and finally experienced my work moving nicely. The owner is a nice guy and pays promptly. He doesn’t give me all the opportunities as he does to his “favorites” but I take that as apprenticeship and am happy that my sales are good. The way he sets sales didn’t draw my attention too much, but now that I read Robert’s letter I can see that my gallery owner is a padder. We nicely agree about my retail price and he adds the cost of the frame on top. But those frames seems mighty expensive, and they seem to get more expensive as time goes by. Couple months ago I raised my prices by a small percentage and I noticed his stiff upper lip and I couldn’t figure why — doesn’t he want to earn more I thought? Now I realize that he has already padded the prices to what he knows is the most he can get and if I raise my prices, his fudge-factor gets smaller! Cheeky! I wonder if that’s his present to himself for taking on a few emerging artists. Am I going to say something? No I am not — why? Because I don’t want to go back to competing for one of the 50 meager seats. The couple of my remaining B rate galleries are not getting upset because they probably figure that they offer a better price for my work so a shrewd collector will go to them. In any case I am trying not to lose sleep over this because the collectors are adults and should know a few things about the market. I’ll stick to painting and trying not to get cheated myself, that’s hard enough. I’ll remember when I buy art to either buy unframed, or negotiate the frame separately.

I have a similar situation and the gallery charges 2.5 times my retail price because their rent is so very high. Some galleries might have higher overheads being in an expensive resort town or city. Its underhanded if they are random about it, don’t tell the artists, or are really overcharging the buyers. Its not great… I don’t LIKE getting LESS than the gallery gets for MY work. But he sells a lot for me and is in a great location. And its nice to know my work can and will sell for more. Personally, I think its a terrible arrangement that artists get only half of what they sell (including framing they invested in) when being represented by a gallery. What other agent takes such a cut?

Response to Robin: (“what other agent takes such a cut?”). As a painter, of course it rankles to “lose” half the price of a painting to the gallery. But, the way I look at it, is that I am gaining exhibition space rent free. I don’t have to pay for the wall space to show my work. I don’t have to sit in a tent on summer weekends, or pay $1,000 or more up front to, maybe, sell a painting or two at a fair, or to schlep my work to a community centre where it may be seen by 50 people in a month. I am also not responsible for paying the gallery’s rent every month, or the electricity to keep the lights on, or the salaries of the staff that show up every day. Especially in these challenging times, the good galleries earn their commission. As far as padding is concerned, I feel that this practice is as unethical as the artists who undercut their galleries, and probably just as prevalent. Since Anonymous has discovered this practice, but might prefer not to lose the gallery, perhaps, after establishing a track record with the gallery, Anonymous might speak to the gallery owner and suggest that the disparity in pricing might be counter-productive, in that the artist may be less likely to steer potential customers to that gallery. On the other hand, if the gallery owner feels that Anonymous’s prices could be higher, perhaps the solution is to slowly increase prices to achieve a better bottom line.

I recently participated in a group show in Miami. I noticed the prices were all 25% higher than on my price sheet. i also noted these dealers really working hard to sell the work. the show was hung beautifully, the food and music at the opening were excellent and there were plenty of people in attendance. One of my pieces was marked sold. I received a check immediately for the amount that I had priced it. when I inquired about the pricing difference,I was told that every American buyer is looking to haggle. (not the Europeans) I realize this is not an ideal situation. I also notice that many sample artist/gallery contracts have a clause that allows the artist to view the galleries books and am curious if anyone has ever done this.

The art world as we have come to know it through the Internet is as complicated a web as the internet itself. I watch clients stand in our gallery and with a smart phone, google the artist and say ” look honey – they have a bigger selection in the city , further here is the artists phone number lets just call him when we get home” In many ways the galleries are becoming “show rooms – museums – for the amusement and education of visitors who stop by. The relationship between the dealer and the artist needs to be crystal clear. There is no room for grey areas. When an artist gets a call directly from a client – we presume the artist will ask “Where did you see my work? Who introduced you to my work? and if it was us, we expect the artist to ask the client to call us back. Sadly more and more this is not happening.

In the past few years our gallery has grossed between 2.1 and 2.3 million. After the artists are paid we pay our rent, 10 people on our payroll and advertising, shipping etc etc. there is about 5% profit. My husband and my accountant think we are completely mad to continue to work as hard as we do for so little profit. Our dedicated team are not on commission, however our payroll is just under 15% of the gross. We do the best we can to take care of the committed staff that we could not survive without. Most dealers I know who have expensive tastes and a life style that some could only dream of, are living off an inheritance, not the profit they make from their gallery. Most gallery owners I know do it because the sincerely LOVE what they do, want to try and support the artists they represent and most importantly, preach the benefits of creativity and original thought.

As a gallery owner I understand how costs eat away at your profit. We’re a small business with locations in two cities and, including ourselves, employ 13 people. Expenses are enormous. We occasionally tack on a 2% margin to cover cost of shipping product back and forth between locations. Additionally, at any given time, we have close to $150,000 invested into framing and presentation. Those costs get tacked onto and added to the purchase price. So hypothetically when an artist consigns a work of art for let’s say $3000, depending on the size and cost of framing we will routinely tack on an additional $300 – $800 and pass that cost along to the retail client. Do the math, that’s a 10 – 30%, hike which, out of necessity, has to be passed along otherwise there would be no point in even opening doors.

We have a small gallery in a midsize city in the Midwest. My husband and I have other businesses as well. We operate 40/60 in the artist’s favor. Many of our artists (some of them well known) exhibit in other galleries across the country and we stick to their prices. We have traditionally done about a million and a half each year, though the last two years have been lower. We have one paid staff who as well as a salary gets a 2% commission on everything we sell. She is totally motivated to call customers when new work comes in and my husband and I could not run the gallery without her. We would like to make her a partner but she refuses to take that responsibility. The gallery has excellent good will and some customers have been with us for many years. Our artists have mostly been with us since the day we started and there is no turnover among our artists. We pay artists right away. We keep our overhead low–a small gallery next to a dress shop and we make a decent living from it without padding. The gallery business is somewhat unique. With the exception of framing which for the most part is ordered by the customer, we have no owned inventory. The dress shop next door has to pay for their merchandise within three months.

A lot of this debate has to do with culture. We Greeks expect the price to be padded, and we expect to bargain it down. Greeks who pay the full price for things are called chumps. Greeks who pay taxes are called chumps too.

Gone are the days when a gallery owner could look at the quality of a customers shoes to determine what he should charge. The civilized world is better informed now, especially regards art, and demands a level playing field, subject to slight variations of perceived quality. Artists who have only one dealer, well that’s another matter. Those are the ones you really have to look out for.

I took my work by motor home, sailboat, dinghy and dock from Montana to San Diego to Catalina Island’s Casino Gallery. I was juried in with a variety of subject matter–not island or tropical even. I never sold, so the next year when we wintered in San Diego on the boat I walked into the gallery and asked to see work by Ann Arensmeyer. Big blank look; no work, no note cards or business cards anywhere. I finally found them by climbing on a tall stepladder in the back closet stored like junk. The woman told me they were not island subjects!!!!!!!! I have my work in just one gallery now, a nearby coop called Lincoln Gallery in Loveland, CO. Since I teach each week I have many demos which creates an abundance of artwork for which I need a showing place. I have some work on fineartamerica.com as well. Just wanted to share my experience; perhaps it will make me feel better about it.

I have owned a gallery in the southwest for many years and I am finding that, in this economy, my biggest challenges come from gallerists discounting artwork when a potential customer merely looks at an artwork. I now know dealers who mark up the artworks to give discounts or offer 25% off without a second thought. I have felt that it is important to maintain the integrity of the artists’ pricing structure, but offer free shipping or generous time payments. I now see new customers turning away from my gallery as they jump to other galleries who are heavily discounting artworks. In the end, I believe these mark-up/discounting policies are disadvantageous to all artists and galleries. Any suggestions?

Re:”please don’t use my name” Perhaps an easily read and articulate statement of your pricing philosophy displayed in your gallery would educate the buying public. Generally, people don’t have any idea of the realities of operation overhead so if you can enlighten them “gently” it may be helpful.ui

Gallery is a sales shop. When an artist joins the commercial market, he becomes a player in the sales business. Businesses fail because of lack of sales – so sell you must, and the only rules are written in the law. Imposing unwritten “ethical” rules doesn’t work in a free market. Anything that’s legal is a fair game – discounts, fees, padding, undercutting…etc. The sooner sales people (including artists) get this, the sooner they have a chance of succeeding commercially. Your artistic soul has nothing to do with all this.

I’d like to thank all the art dealers and gallery owners who have responded to this subject and congratulate them for still being in business. It’s a tough world out there for most artists and I, for one, prefer to have somebody else dealing with the sales of my work. Unfortunately, my current subject matter in painting, makes it a hard sell, but I have to paint it anyway. Art dealers are performing a valuable service.

Like you, I believe there is a considerable downside to variable pricing that hurts the artist’s credibility and I would never allow a gallery to post pricing that was inconsistent with all the galleries I work with. However, if the padding gallery shows a consistent level of sales at a higher price point, it may also be true that the artist’s standard pricing need to be raised. Broomfield, CO

Your points are important and I will talk them over with our staff. Many of the issues you point out are things that affect the reputation of the good galleries and dealers, including the Leighton Art Centre, that do not approve or use these practices. We do not pad any prices. There is the standard commission that is part of the price of the work. We certainly would not change the price without consultation and the consent of the artist. Thank you for raising these issues and bringing these practices to our attention. It reminds us how important integrity is in dealing both with our artists and our clients.

Thank you all for all this valuable information. I am better armed now to go out into the world.

If they have to pad, their gallery is not well run or their overhead is too high for what they are.

Galleries, like any human institution need to be reminded of their original policies now and again. The internet is helping with that now. Galleries used to support artists, expecting to give artists a workable stipend for an exclusive. They were much more diligent, taking their promotion obligations seriously when asking 50% commission from the artist. I always choose galleries that are serious about their standards, both artistically and ethically, also about their networking. I shy away from galleries who are showing work I don’t respect, or who are in it for the romance of owning a gallery, not needing to sell. I do my homework, checking out the community, the galleries, picking the gallery director that responds to my work, and shows a similar standard of work. Likely the clients of that gallery will also respond well. Being in a gallery is an honor and an opportunity, it is also an investment. I have to choose well.

Dear Robert, I am so glad that you quoted me at the end of your response to this artists concern. Artists have to understand that a gallery is a business. Simply put, they are a stepping stone between an artist and a buyer. Careful what you agree to, as a gallery can then go ahead and do whatever they deem right for them. If an artist were to say, get 50% of the selling price, the gallery can then mark the piece down by 1/2, just to make a sale. The artist would then get their percentage on that price sold. It is a dicy market. It has been my experience that the artist does more for the gallery than the gallery does for the artists. Usually by the time an artist is signed by a gallery, they have a following. Most sales at a gallery come from the artists following they have already developed. Galleries can be like used car salesman. Most people do not know that a gallery takes work on consignment. The days of a gallery paying an artist a salary are GONE. An artists work will also inevitably shift and become something new. This is where it gets really tricky. The gallery, while claiming to LOVE the new works and the exciting new direction, may not follow throughout with selling these new works. They can often dictate what an artist will paint based on what has sold previously…”we love the new works, but we get calls every day for pieces like you did five years ago”. So, the artist, wanting to eat, starts painting for the demand, rather than their inner voice. It is a catch 22 situation and is a dangerous line to cross. I have avoided galleries and would not sign with a gallery unless I really knew they could sell my work, be a wonderful and reputable dealer, NOT want exclusivity and book me for shows for the next three years. Then again, that is just me. John Ferrie