 Over the years I have sold my work in dozens of different venues and I’ve experienced dozens of different financial arrangements. When I first started out, I tried to keep my profits consistent; in those days, different shops or galleries might have been selling the same work at different prices.
These days I strive to keep my prices consistent, so that a buyer will pay the same price at own studio in North Carolina as they would at a gallery in Seattle. In the age of the internet, buyers can shop around, but I don’t want them to have to. But keeping my prices consistent means that I have to be careful to set prices that accommodate a range of different situations. Here’s how I reverse engineer my prices for three common retailer relationships… I am the retailer I sell work directly to customers through my website or during studio visits. I retain all of the money the customer paid for the work, BUT it’s important to realize that this isn’t pure profit: I’m also having to pay for card service fees, sales tax, shipping, packaging, rent, display, customer service, etc. If I retail a piece for $100, I keep $100 minus the additional costs of completing the sale. I am wholesaling work to another retailer This is the relationship I experience least often, and it usually applies to lower-priced production work. I sell the work to a shop or gallery, who will then sell the work a second time to the retail customer. I can set my wholesale price (what the gallery pays me for the work), but I can only suggest the retail price (for the kind of work I do, retailers commonly double the wholesale price to set the retail price). The retail shop or gallery owns the work so they can price the item higher that I suggest, or they can put it on sale. In either case, I earn my wholesale price and the retailer bears any additional costs of completing the sale. If I wholesale a piece that has a suggested retail price of $100, I typically make $50. I am consigning work to another retailer This is the arrangement I enter into most often. I send the work to the gallery or store but I continue to own it until a customer buys it; if it doesn’t sell within a certain window of time, it will be returned to me. If you’re aiming for consistent retail prices, you need to know how much the gallery or store is going to increase your wholesale price in order to set their retail price.. This “retail markup” is often expressed as a ratio or a multiplier. Common ratios are “50/50” (as in the gallery doubles your wholesale price and you each get half of the retail price) or “60/40” (in some cases this means the artist gets 60% of the retail price, while the gallery gets 40%, but it can also be the other way around so be sure to ask which number is the gallery and which is the artist if it’s not specified). Other galleries will multiply your wholesale by 2, 2.25, or even 2.5 to reach a retail price. If you deal with a gallery that offers the artist more favorable terms (aka a bigger cut), woo-hoo! You’ll pocket more of the proceeds! If you’re considering selling through a gallery that has a higher-than-typical markup, be sure that whatever services or support they offer justifies their getting a bigger cut (do they print catalogs? Or have a clientele you’re eager to meet?). This is where things start to get a little messy. If I consign a piece that retails for $100, the amount I will earn from the sale depends on the gallery’s markup. If the gallery is 60/40 (artist/gallery) I will earn $60. If the gallery is 60/40 (gallery/artist) or has a 2.5x markup, I will earn $40. Your prices should always cover your expenses AND allow you to turn a profit (I’ll say more about this in a separate post). If you are selling in different venues and your want your prices to stay consistent, you will need to set a price that still allows you to cover expenses and turn a profit GIVEN THE LEAST ADVANTAGEOUS FINANCIAL ARRANGEMENT. Set your retail prices according to the markup of the gallery or store that gives you the smallest slice of the sale. In the examples above, I’m selling the same $100 item, but my cut varies from $40 to $100; if set my retail prices with the $100 profit in mind, I will be losing money every time I sell through a gallery that only pays me $40. This is just my way of doing things and a different approach may be better for you. Whatever you chose, aim for clarity and consistency, and always ask if terms or conditions aren’t spelled out, rather than making assumptions or hoping for the best!
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