Video – Ask a Gallery Owner: The truth about gallery commissions and how they affect pricing

This week I discuss pricing artwork for galleries. I suggest that the retail value of the artwork should be consistent no matter where the artwork is selling. I talk about how to think about the gallery commission and the split between the artist and the gallery, and how this can help to optimize the value of the artwork.

Have questions you would like me to answer in future sessions? Leave a comment 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.

14 Comments

  1. Jason, some of the galleries I sell my glass sculptures through ask me to tell them the wholesale price. Some then double that amount, some double and add 10% so they have room to negotiate and I’ve heard others (none of which I’m currently working with) take the wholesale price and increase it by 250%. In each of these cases, I can’t be responsible for the inconsistencies across venues.

    I used to sell my work locally at 60% of gallery prices. Recently I changed my pricing to approximately match gallery prices … and just in time, too. I had a few people contact me after seeing my work in 3 of the galleries I work with. They commissioned pieces from me which I sold at gallery pricing. Had I quoted them the 60% I used to use, it would have undercut the galleries and would have been confusing to the client.

    As an aside, I checked my agreements with the galleries to see if they required a percentage of the sale since the customer had been exposed to my work there. None of my agreements included that provision. In one case the gallery actually referred the client to me and refused any cut of the transaction (which I offered them.)

    Your explanation sounded very clean and unambiguous, but in my experience, it’s more confusing and complex when you consider the factors outside the artist’s control.

  2. in my several decades of experience as an artist and gallery operator many ameteur artists resent the gallery making any money. Professional artists know it takes at least as much time and expense to market/sell the art as it does to create it. Galleries EARN their commission by providing that service which costs the artist nothing and will earn them more money and free time as well. In the end a gallery will realise 22.5% the rest on the commission is cost of doing business. The artist marketing their own work would pay equal or greater % to realise in all likelihood less results in sales. The relationship is indeed a partenership where each party benefits. like any partenership communication is required to keep it operating smoothly.

    1. Thanks Richard – you’re right, when an artist resents the gallery making 50% on the sale, it might help to consider, as you suggest, the gallery’s net on the sale is far less than that.

  3. Although I knew what you said more or less, you definitely made it clearer and I apprecaite it more coming from you Jason, as you are a gallery owner. It is a give and take situation, or as you mentioned a partnership.

    What you have explained, is likely when it is a brick and mortar gallery or venue and that is fair enough. 50% for both, yeah I can live with that, since like you mentioned, the gallery takes care of the logistics, promotion, packing, delivery, etc…

    The qualms I have is with some online galleries which are rather unfair with the artists, I feel. I know of a few, that will take the 50% commission just for promoting you. I say just, it is a lot of work and money too.

    However, all the rest of the responsabilty of the sale is heaped onto the artist after that, which to me is a very unbalanced ‘partnership’. In this case, it more of an exploitation to me.

    For instance, I had once joined an online gallery where if a sale had to occur, they would be deemed as an agent, which wouldn’t necessarily be wrong. What I see wrong though, is the artist taking all the responsabilty (packing, aftersales, etc…) after the sale, with the onine gallery taking 50%, when they should be doing the work themsleves. After calculating everything though, because I have to pay 18% V.A.T. (E.U. Tax) on the entire sale, even the gallery commission, I would have ended with about 37% left in my hand from the entire sale, assuming all things go well, that is. One reason as mentioned is, I have to pick up all the tax here, apart from the other expences. This to me is very unbalanced, especially since the art has to be created by the artist, which is work mind you and take on the rest. With my 50% split, i would have been left with very little.

    So, one does have to cautious when negotiating and it is great when all counterparts benefit from a sale (Collector, Gallery and Artist).

    It is nice when things are understood and balanced out.

  4. Jason, you have articulated the response to these questions so well and from my experience as a gallery owner you are spot on. Galleries are a business – we need to pay our mortgage just like everyone, so as much as we might love an artists work, it’s still a business. To stay in business work needs to sell. Some artists tend to overprice their work because it’s “painful” for them when they think about a gallery taking “half”. But as you point out, it’s an arrangement for both the creation and the selling to maximize the outcome for all concerned and continue to cultivate the prospects.

    An example – the first batch of one artists work was priced reasonably and all work sold. The second batch of work by the same artist was double the price and none of it sold.

    Most galleries have an agreement in writing about the expectations of % of commission, when paid, discounts and all of the details. I give a draft to the artist before I accept the work.

    I don’t think people realize how much it costs to have a brick and mortar gallery and pay for staff, insurance, security, rent, utilities, computers, photographers, printers, marketing, networking every single month. It’s very expensive but we look at it as an ongoing investment in the artists / business – we hope the artists will come to see it that way too.

  5. Great answer Jason. You did leave out the fact that the gallery has to pay for the gallery space whether they own or rent, insurance, employees, etc. They also take care of shipping and perhaps hauling the work to the client and even hanging it even if it’s on a trial basis and then retrieving it. This is work and time that the artist doesn’t have to deal with. As you mentioned, the gallery has clients and a base that they’ve built over the years and tries to cater to those collectors. That is also why it’s important for the artist to be aware of whether or not their work will fit. It isn’t helpful for either party to be represented by a gallery that isn’t excited about your work.
    I love and appreciate everything my galleries do as I prefer to paint. They deserve 50%!

  6. All of your comments are very clear and make sense if an artist is only working with one gallery, and when an artist is not actively trying to sell their work in other channels as well, such as on their own website or via several different galleries.

    Some galleries don’t charge the same percentage as others – at least, I’ve been quoted a variety of percentages between 35% and 50% for galleries I’ve approached.

    Are we to conclude, then, that it is not acceptable practice to sell through more than one gallery, or to sell through a gallery AND through our own website?

    If we sell through a number of different galleries and they have varying percentage commissions for their work, how do we price the work fairly to all on our own web site?

    I’m still confused — this seems to be a very complex issue, and while I don’t at all begrudge the gallery their commission given their overheads and efforts, I am not comfortable with the idea of only selling through one distribution channel, such as a single gallery. Nor am I getting a warm and cozy feeling from trying not to undercut anyone on my website while pricing work higher than some galleries are selling it for, and leaving a disparity that ultimately works against the higher priced, and presumably better situated or harder working galleries.

    Is this an all-or-nothing sort of thing? Must we sell only through one gallery and match their prices on our websites, or is there some way of doing this fairly that I am just not seeing?

    1. Jason frequently says in his videos and blogs that you should seek to be represented by more than one gallery, but limit that to one gallery in each region. I think he covers this in one of his recent posts. His book “”Starving” to Successful: The Fine Artist’s Guide to Getting Into Galleries and Selling More Art” goes into it in more detail and is a great investment for any artist.

    2. I may try to address this in a future video, but the short answer is simple. Charge the same no matter where you are displaying and selling your art. If the percentage varies from gallery to gallery your net will vary a bit from gallery to gallery. So what? The name of the game here is to get work selling regularly, and if some galleries generate a little more profit for you than others, consider it a bonus. You can and should show in a variety of venues, but the pricing your customers see should be consistent.

      Thanks for the question Leah!

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