Gallery Commission Question | Ask a Gallery Owner

I recently received this email from an artist friend:

I have read your books, “How to Sell Art”  and “Starving” and have really learned a lot. I have put many of your techniques into practice and I must say sales are up!

I have a question for you, especially being a gallery owner. One of the galleries I show in is more like a high-end lifestyle store. It’s local, and I do well there. When I’m in town on a Saturday I will often go to the store, hang-out and meet people. This of course boosts sales.

The question I have concerns follow up sales. In some cases, clients don’t buy at the time, go home, consider, etc. I have started capturing contact info and following up. The store does not, as they are busy selling all the other items they carry. When I finally get a sale after months and a half dozen email follow ups, what is the store entitled to? My standard split is 50%. I do think the store should receive some sort of commission, but not 50%. Without the store I would not have met these customers nor would they have seen my work. However, I did all of the follow up work to get the sale, which probably would not have happened without the perseverance. What do you think?

Again, thanks for the books.

Scott C.

 

My response

Thanks for reading the books Scott and glad to hear sales are up!

Great question on the commission, and this is a bit of a murky situation. In my gallery it doesn’t work this way because even when the artist is present we will do most of the follow up and work to earn our commission. I can definitely see that in this situation it doesn’t make sense for you to pay the full commission to the store when you are doing almost all of the legwork. A pretty standard finder’s fee would be 15%, and I think that would probably apply in this situation since their retail presence is generating a lead, but your work is creating the sale.
What is your relationship like with the owner or manager? The delicate part of this situation is informing them of the sale and the fact that you are paying them a finder’s fee instead of a full commission. Maybe your activity will encourage them to start doing better follow-up, which would be a win for both of you.
Scott’s reply
I agree, the tricky part is approaching them with the proposal. Luckily my relationship is very good, so I think it will go smoothly. I’ll let you know.

What do you Think?

Have you been in a similar circumstance? How did you respond? What is your input on the question of sharing commissions? Share your thoughts, suggestions and questions in the comments below.

 

About the Author: Jason Horejs

Jason Horejs is the Owner of Xanadu Gallery, author of best selling books "Starving" to Successful & How to Sell Art , publisher of reddotblog.com, and founder of the Art Business Academy. Jason has helped thousands of artists prepare themselves to more effectively market their work, build relationships with galleries and collectors, and turn their artistic passion into a viable business.

32 Comments

  1. over the years, I have been repeatedly told that if I sell a work as a direct result of gallery exposure, then they get the commission no matter how the sale is made — this is to prevent artists from selling their work after a show or outside a gallery for retail less part or all of the commission — I’ve been in Scott’s situation before and even before the sale was completed I went to the gallery — in that case, they declined any commission — as an artist I need to be at peace with people I deal with and will therefore make no assumptions or jump to any conclusions no matter how reasonable they may seem — perhaps from a business point of view this may seem naive to you but it it has meant good relations with curators and gallery managers. Thanks.

  2. Tricky indeed. Coming to a 15% agreement after the fact could be sticky and undermine the relationship. Going into it with the 15% (or whatever) agreement before the circumstance would be ideal. I want to know how Scott’s situation is resolved.

  3. I think, since the retailer is apparently not doing any followup nor any marketing per se, they shouldn’t be in the 50% realm anyway. I am happy to pay 50% (net in the case of my framed photography) to an interiors design firm or art consultancy, but that is when they do all the legwork and paperwork.

    I think Scott’s issue will be how much follow up by him constitutes a reduced commission to the store….two phone calls….lunch with the buyer….what? And is that on a sliding scale then? I think the agreement have to be simply and clearly defined without wiggle room. If the store sends him the name for followup, or it’s agreed that when he’s in the store and deals with a prospect then that’s his client from then on and will be considered a referral at the 15% rate commission to the store in for any future sales to that collector. Something like this could very possibly encourage the store to work harder, which they should be doing anyway to improve their business.

    Contiued success, Bob

  4. I think it depends on where the art work is. Has it been hanging in the gallery for a while? If so, I think the gallery deserves a bigger share for the painting if it has been taking up valuable retail space for a length of time.

  5. Over my 40 + years as a professional artist, I have been contacted many times by collectors who wanted to purchase a work or commission a piece. I ask them; “Where did you see my work?” or “How did you learn of my work?” If they tell me that they saw my work in a particular gallery then I have always paid the agreed upon commission rate to the gallery where they saw my work. My relationship with my galleries is too precious to jeopardize. I also have NEVER undersold my galleries. I build long term business relationships that become friendships with the passing of time. One fine art gallery has represented me continuously since February of 1989.

    1. I agree entirely with Frank, the old saying “what hill do you want to die on?” applies here, most relationships with galleries are prime and as artists we may have to work harder to help sales, but isn’t that what it is all about?

  6. I was in a similar situation and had an agreement of 35% for this type of situation and 50% regular commission. Luckily, we had discussed this prior to having it pop up so no problem.

  7. As a gallery owner, I have to disagree with the low fee of 15%. I sign up my artists with a 60/40 % split, the majority to the artist. The gallery, if professional and supportive of the arts, should be holding up their end of the deal, which includes renting and maintaining the space, maintaining the artwork (dusting, displaying, etc.); promoting the gallery to get people in the doors to buy the artwork; working with clients to procure work; paying bank fees on credit card/debit payments (there goes some of that 40% !!); and encouraging future sales to clients, i.e. collectors. They also carry insurance ($$) and alarm systems ($$) to cover said artwork in case of any damage. I guess I am making only 17% when it all comes down to it–oh wait, electricity, heat, internet and phone service to keep everything well-lit, warm, dry and staying connected!!
    But, certainly if the artist is doing ALL the footwork to close the deal, something should be worked out with the gallery owner, prior to making the deal. Read your contracts carefully….don’t hesitate to ask questions or have something inserted or changed. We won’t bite you.

    1. Great feedback Shelley. I think the big difference here is that you and I would never, ever let a customer walk away without either us or our staff doing the follow up. It sounds to me like the “gallery” Scott is showing in has more of a retail store mentality. Let me just be clear, if my gallery is involved in making the sale happen, we expect the full commission.

      1. I think you are dead on right, Jason. Galleries do follow up; that’s part of why they get a commission, no? But a retail store just displays things and it sounds, from Scott’s description, that his work was no more than another product in a store. So a 15% – or whatever he feels they deserve for displaying – seems fine.
        I’ve had a similar experience with a retail store and they declined taking any fee at all.

  8. I think I should clarify as it’s not clear in the original email, I have not closed a sale yet this way. But I know it is coming, and I want to be proactive and discuss terms with the gallery. My original question is just to see what is expected from most gallery owners.

  9. Is this about the artist capturing some of the sales commission, or undercutting the gallery, or both? If you undercut the gallery or shop price, you are also undercutting your existing collectors, something I would never do. However if I was in Scott’s position, I probably would approach the shop about reducing their percentage of the retail price. After all, selling takes time – time that could be productively spent making more art. The actual adjustment could be worked out on a reasonable basis, taking costs into account. And if the shop says no? Then it’s just a business decision whether you stay with them or not. I think the retail model is fine in its own way, but with the artist carrying some of the shop’s risk in relation to unsold stock (the wholesale price), there should be some room for negotiation.

    1. It’s not really about undercutting – the artist would be selling the work to the client at the same price. He just want to make sure the follow up happens and the sales get closed.

  10. Hi Scott, being up-front with your gallery or representative is the most important part of any commission/fee arrangement. While it’s true that you are doing part of “their” job by following up, they are also doing the part of presenting your work to potential customers. Without them, you have no prospect.
    Another point to consider: If you close the sale yourself, you also accept liability for the sale (potential return of the art, for instance). It would suck if you paid the gallery a reduced commission, only to have the artwork returned later.
    My advice: Redirect the customer to the gallery for the close, let them take their commission – and the responsibility for the sale. Since they are local, the gallery will probably be happy to send a representative to your studio to close the sale. This is how we handle local sales of my husband’s paintings, if the customer saw his work at the local gallery that represents him.
    Best, James

    1. I think that the gallery should get something. I had a situation where I directed a client directly to the gallery where they bought the piece. I have a good relationship with the gallery and felt that in this case they deserved the whole commission.

      In another situation, the client asked to purchase the work and came back several times and the owner never got back to them. I changed out my work about a month later at the request of the gallery and I got a call from the client, who asked about the piece. I asked where they had seen it. He explained that he had tried to buy it before and the person did not get back to him in several tries. I did call the gallery and asked if anyone had inquired about the piece. They commented that they had talked to a person several times, who had come in to ask about the piece, but they had been very busy and never got the potential client’s information because they did not think that the client was serious. and they were busy hanging art works.

      Most clients , they said, bought works at the openings. I told them that I had sold the piece.
      Their comment was that they thought that they should get the full commission for up to a year because the work had been in their gallery. I want to know what you all think about this; needless to say, two of the works that I picked up had been sun bleached and were ruined .

  11. My art is in a co-op gallery so the sales commissions are only 20%. But if I get a pet portrait commission that was generated through the gallery I go ahead and pay them the 20% since the contact came from the gallery.

  12. I read most of this – I did not read everything – but I could not find any mentioning of a consignment contract where situations are clearly stated………..

  13. Oh boy. Here we go into a conversation that has dogged me for all my professional life. I’ll be a Devil’s Advocate and challenge. We all know how it’s supposed to work. The artists make the stuff, the galleries sell the stuff, we split the difference. Both gain. Of course, it doesn’t always work that way, except for the fortunate few – very few. As a curator and gallery owner, I encountered many artists who agreed to enter into my contract. I often had artists who sold behind my back during the show and after the show. A powerful memory was the artist who took her paintings directly to a competing gallery the day she picked them up from our show. I experienced plenty of my clients, collectors, who knew the artists and went to get their “wholesale” discount at the artist’s studio. The most successful gallery in my region gives great latitude to their best selling artists, but thoroughly enforces their restrictive territorial restraints on their lesser players. Even the A-list artists in the big markets play their dealers off one another – back stabbing, law suits, you name it. As a producing artist, I have been approached by collectors who want to buy “under the table.” I have many adult artist acquaintances who still do not understand the commission formula. They continue to adjust their pricing depending on the rates at the various commercial or non-profit venues, and of course, wholesale if they sell it themselves. They like to tell me how they screwed their galleries out of commissions. When I try to correct their thinking in this regard, I cause distress. Yes, we all should have open communication with our venues. What if the artist or gallerist is dishonest? What happens when we’re desperate and starving – gallerist or artist? And now, artists are encouraged to do all the developmental legwork up front – portfolio photography, marketing text, statements and bios, making presentations to arts councils and service agencies – in the hopes of gaining representation at a gallery and bringing their clients with them.

  14. This is indeed a subject about which both artist and gallery owner should have an understanding if good business practices, relationships and reputation are to be maintained. In my experience with a gallery a few years ago, the contract addressed this situation. The gallery received their 50% commission if the artist made a sale of an exhibited piece within three months after the gallery exhibiting time expired. It seemed to be spelled out well and I felt that it was fair. The Honor System and the artist’s conscience are at play here. I like to have a good feeling when any sale is made.

    1. Hazel Stone is finally mentioning something about conscience. To me any good business practice is based on transparency, trust, integrity and good communication skills. Artists should not be worried so much about making the 35% extra on a sale behind the back of the gallery. In the long term you will gain nothing from this scraping attitude. Gallery owner Shelley Barnett explained beautifully how much work goes into showing our artwork on their wall. It is ridiculous for artists to say that they do all the work. Everybody works hard in this business, the key for success is not only in margins and % but in conscious and respectful collaboration!

  15. Having an agreement ahead of time would be good. The gallery where I show gets a certain percentage when the sale is in gallery, and an agreed upon lower commission when it is a special commission I do for the client but generated by the work showing in the gallery. I have even had the gallery willing to charge a consulting fee for time I spend in the client’s home finding out their specific parameters for the commission (bringing sample colors and designs). The payment for artwork goes through the gallery, the price never undercuts the gallery and is often more due to it being a special commission. The gallery often provides hanging services in the clients home or office which is a separate cost. They have been easy to work with.

  16. I must say that I am very interested in this conversation. I do not have a standard gallery that keeps my pieces on hand to sell. My four galleries are the type that does minimal advertising and most are run via a grant. Three are art councils. I have done as much advertising as I possibly can without breaking the bank. (I have a very small bank) Yet the diversity in the commission is amazing. One takes 40%, another 30% and yet the third 25%. The museum requires a 30% commission which is donated to charity. I don’t mind this at all, however, 40% commission to just hang on the wall is a bit steep. I have approached other galleries further down state and find that this seems to be the norm. Your work is only taking up space on a wall, and hoping that someone comes in to see it and like it enough to purchase it. When I do make a sale, I am happy, but really sore that I had to work to get someone in the place and yet need to pay for the “priveledge” of hanging on the council wall. This seems terribly backward to me. I get so tired of pushing. I’d gladly pay the 50% if someone else did the bulk of the finding patrons.

    1. I could understand if the the retail space was a coffee shop and they offered their walls to showcase art to draw people to the shop. then the percentage should be around 30-40/60-70%. But I look at walls as a retail space. I own a furniture and Interior Design store. Every square inch of the property has the potential to display something that would eventually help pay the bills. If our store is paying for all of the marketing, and providing the space, it should be 50%/%50.. If the artist is not doing any work to promote the artwork, or business, then the artist should get less. Art has no value to the retailer, unless someone purchases it. The artist sees the value, but the retailer see’s the potential. The possibility of a sale has no value, only the purchase of it. Some successful businesses such as coffee shops can continue to sell coffee and they would be fine with or without the sale. Referral fees are separate from artist/dealer (gallery) commissions.

  17. I was in a co-op for a long time. The rule there was a flat 30% on anything sold from the gallery or our personal studio. Any commission that came through CFS , the 30% was to be payed. We also paid 15% on any classes we had in the studios. In the galley in which I participate has different rules. If we have a studio in the building, we may sell directly to the person buying. If we send them to the office, they take 10% for the booking and credit sales. If we sell from a monthly gallery show, they take 35%, but then they do the marketing, hanging,etc. after our painting/art has hug for a month, the piece is returned to and the commission rules revert. I am like most , the gallery deserves their commission if the do the work, because I really rather create than do selling and promoting.

  18. I owned a gallery and my contract said 150/0 for work sold out of gallery but bought by a person who found their work in my store…I did have artist who felt it was unreasonable and went behind my back..a woman who made broken pottery birdhouse and a customer from a large old pottery in Ohio had her do a house of the month and she refused to pay me…which ended our relationship..she made tens of thousands of dollars from the original sale and my website..and follow up…as an artist and a Pryor shop owner a lot of artist do not realize what a good shop does for them

  19. Ive had work in galleries and promotions across the USA and in Europe as well as overseas in Asia. Fortunately I have had some great experiences with galleries and promotions. In Europe they understand the situation of the artist a little more in some galleries, as well as other organizations…not galleries precisely, but those agents which sell, exhibit and distribute work. 50 percent is alright-but having to pass that on to the consumer-I feel uneasy. 50 percent is a hard number. I’ve wrestled with a 60% contract…and known other galleries that have manipulated figures, to the advantage of the gallery also..such hidden deals I have heard about in NYC, where an artist is given 800.00 for a work, the deal -inside- stretched, to the benefit of an ‘awkward’ sales period that is told to the artist, and turned around to sell for 8000.00 (or more) on the other end in a back room deal. But 50-50 straight across the board- if I see motion on the work, all the legwork is done and promotions, of course-very important…sales!. (I dont like surprises, and like to see a detailed contract) After all many years of study, training and experience have gone into my paintings and subject matter…50 percent is a very hard number unless I see results from it. In Europe things are different, but often straight across the board about 30% show promotion. Of course the latest trend I have seen is unreasonable- the gallery, charging exorbitant fees for exhibitions, shows and arts fairs…and then asking a commission! In recent years I have pulled away from quite a few opportunities for exhibits (because of these trends) and just concentrated on 1:1 sales of my own work between clients. It is the art that is most important and must be done…The fan-fare, is of course one of those things we must think about (if that is an important career move) and getting a trust worthy dealer who sells the work, concept, idea is a very important thing also…bread and butter. As much as possible, it should be a simple contract straight across the board..if possible signed by notary, some kind of insurance being held by the handlers of work to insure it for loss or damage- in circumstance-. (And watch for the quick-take exhibits where work is hustled into a gallery, sales are made and gallery plus work disappears! -also dealing with commissions too, strong awareness of those people who commission, and want to manipulate the cost of the outcomes (take 50% in advance before ever engaging in a commission and have it on paper with a series of guarentees-I have known at least 5 artists that this happened to…losing their work..I knew three artists who lost an entire body of work [taking more than 2-3 years creation time], as well as the money and piece of mind!…If no one said this dosent happen…it happens! ) Of course these sort of things one must be wary of…the importance of creating the work, selling the work at a fair market price is of primary importance, but most of all, the creation of beauty and the experience it gives others in viewing.

  20. I have been in contact with an art consultant who said that she could get me into and represented by a high profile art gallery. I asked her about what kind of finders fee would she want, and she said that she would want 10% of all sales from work sold in that gallery. That doesn’t seem right. Seems excessive for a finders fee. What is the normal kind of finders fee for something like this. Would the correct thing for me to pay be a flat fee of a certain amount of money? if so what amount is normal? Or is it normal to ask for 10% of everything I sell in that gallery?

  21. Victoria: It seems excessive to pay 10% of all sales forever during the time you are represented by the “high profile” gallery. I think a fee on sales for 6 months might be sufficient if not also excessive. You may want to contact the Lawyers for the Creative Arts to see if they have a protocol, or Chicago Artists Resource (I am sure you are aware of this DCASE organization). I always send buyers to the gallery if they see my work while it is on exhibition. If it has left and I have to do all the work to make the sale, including shipping, then I don’t feel I owe a commission. I have sold work months or years after being exhibited…when is the cutoff ? With social media a lot of my collectors see my work because I share it, and then go to the gallery. Maybe the gallery owes me more! But I am happy to show and sell through a gallery that does their job.

  22. We manage a community non profit theatre space and have been approached by a group wanting to hold a first time quilt show utilizing our entire building for a week including a month of all of our town square window frontage to display as well. Many of these seamstresses sew for free for our performances with us purchasing materials. Our board decided not to charge them a rental fee for their 5 day set up and two day show but they are asking what we would charge as a percentage for sales of the quilts that occur. We have no clue…..we are giving up usage of our space for a week in the middle of rehearsals and providing advertising for their show as well. Please advise if you can!

  23. I am a member of a cooperative fine art and craft gallery. We are a membership- run gallery currently with 22 member artists. We also sell a small amount of consigned artwork. My question is regard to credit card fees and whether upscale art galleries ever charge their consigned artists this fee directly. Currently we take a fairly standard commission rate on sales of consigned artwork and consignors do not pay credit card fees. As member-owner artists, we pay the credit card fees directly-(they are withdrawn from our sales as a separate line on our pay checks). It’s my understanding that the commission rate that a gallery takes from a consigned artist is in part to cover the costs of doing business, including covering credit card fees.
    I believe that as a gallery owner, one assumes the cost of doing business and factors in these costs when deciding on a commission rate. And that it would be very awkward and unprofessional to ask a consigned artist to pay the credit card fee especially when they would be paying that fee on the entire amount of the sale, but they are only being paid for half (in most cases, assuming it’s a 50% commission).

    I would like to know how other higher end galleries handle credit card fees on sales of consigned art.

  24. I have a slightly different situation but relateable. The gallery that represents me got me a commission to do a portrait. 5o% commission was paid over. Now the owner of the painting has friends who also want to commission a portrait having seen said work at the friends house. The gallery in question recieved the lead from the 1st work. They sent me the interested party’s phone number and name, the rest of the process is up to me. Phone, visit, take photographs negotiate a price…all of it. They told me not to forget their 50% which is grating me:) So I will have to tell the new client with a straight face that I want x amount when I would b happy with half that (but not less).
    The gallery didnt hang the 1st portrait nor will be exhibiting the second and has made no contact with the interested party nor will do. I will have to invoice and recieve payment too.
    The hard part…I like all the owners at the gallery.
    Any advise? thanks

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