Consignment Contract for Artists and Crafts People Feed

Insurance Deductible Deducted from Whom?

InsuranceDeductible
Harriete, 

Just wanting your opinion on something. If art is stolen from a gallery and the gallery has insurance but there is a deductible, who is responsible for the deductible?

This just happened to a friend of mine. She said her consignment contract said that the work was insured "while on the premises." There is nothing in the contract about a deductible.

Thanks,
A Reader

Great question. I'd like to be able to read the specific consignment contract under discussion here.  Everything depends on the contract.  Normally, when a consignment contract says that the work is insured, the deductible is the Gallery's responsibility.  Unless the deductible issue is specifically written into the contract, the artist's work is insured for the full artist's/wholesale price. 

Usually the gallery unilaterally decides on the amount of the deductible with their insurance carrier. The gallery makes a choice  among insurance plans ranging between no deductible with a higher insurance premium or a higher deductible with lower premiums. The deductible is a business decision by the gallery. The artist has no control or knowledge about the amount of the deductible. Security issues at the gallery premises are outside of the artist's control. Loss of work while at the gallery is consequently the gallery's sole responsibility. 
DeductibleGraphic1

It would be unethical for a gallery to expect the artist to pay any portion of the deductible when the consignment contract explicitly states that the artwork is insured at the wholesale or artist's price.  

Ideally to prevent any misunderstanding it would be best to clarify this issue in the contract. 

The Professional Guidelines Consignment Contract specifically states:

"9. Insurance. The gallery shall insure the artwork for its full wholesale price.  In the event an insurance claim is made, the gallery shall pay all deductibles."

I found another excellent example for "Insurance" from a different contract. In this example, the artwork is insured for full retail in case of loss or damage. 

"11. Insurance.
The (name of Gallery) shall insure the artwork for its full retail price. In the event an insurance claim is made, the (name of Gallery) shall pay all deductibles."

Beyond the question above from "A Reader," she was worried about making a "fuss" with the gallery about the deductible. This is really shocking though not unusual. I often hear from artists and makers concerned about standing up for themselves. They are so concerned about losing the gallery that sells their work.

WHAT! They are concerned about losing a gallery that just lost their work?  They are concerned about alienating a gallery that will not honor their contract, but wants the artist to pay the deductible?

Any professional person should not be so desparate to maintain a relationship with a gallery that does not respect a business arrangement specified by a contract.

Sorry. It is time for artists and makers to realize that they are in business. A Consignment Contract is a contract -- i.e. a business arrangement. 


Insurance Value, Wholesale Price, Retail Price For EXHIBITION CONTRACTS

Insurance Value, Wholesale Price, Retail Price for exhibitions are sometimes confused usually because of inexperience and good intentions, but with negative consequences and hard feelings if an insurance claim becomes necessary.

This is why a recommendation will be made here.

ALWAYS CLEARLY WRITE DOWN on the exhibition contract:
   the INSURANCE VALUE; and
   the WHOLESALE PRICE; and
   the RETAIL PRICE.

CONDITIONreportI also write this on the Professional Guidelines Condition Report when I send my work to an exhibition.

Defining each term on the contract by a dollar value avoids confusion.





Here is an example:
RETAIL PRICE:            $ 3,000
WHOLESALE PRICE: 
$ 1,500
INSURANCE VALUE:   $  1,500

NEVER use the term "ARTIST PRICE" on a contract or in discussion. The term "Artist Price" has too many definitions to be a reliable term. Interpretations of an "artist's price" range from a special discounted price of wholesale to a special retail price.

ALWAYS LIST THE RETAIL PRICE even if the exhibition sponsor does not have a space for it on the loan form. Write in the Retail Price yourself, if necessary, between the lines or in the margin.

If art or craft is borrowed from a collector that paid retail, then there is no wholesale price and the insurance value is the retail price.
RETAIL PRICE:            $ 3,000
INSURANCE VALUE:   $ 3,000

Keep this as clear and straight forward if you can.

Recently I was in an exhibition at an established museum. An inexperienced intern was in charge of the exhibition paperwork (a cost cutting measure that had huge consequences). The loan form from the the museum only had a place to write the "insurance value". The artists wrote in the insurance value as the wholesale price. That is correct, but the museum then sold the artwork at those wholesale values instead of the retail prices. What a mess!  

This confusion didn't happen with my work because I wrote down both the retail price and wholesale price, but I do know that at least one artist had her work sold at wholesale! The artist lost the potential of establishing a new "higher retail price" for her work and the museum expected to pay the artist half the wholesale price. Bad news! The museum fixed the mistake at their loss. What a shame! A huge opportunity cost for everyone involved.

Avoid confusion. Always list the retail price, wholesale price and insurance value on your contract and  Condition Report.

Harriete

Previous posts about Insurance Value, Wholesale Price & Retail Price:

In$urance Value, Whole$ale Price, Retail Price - Under$tand the Money defines the terms.

In$urance Value, Whole$ale Price, Retail Price for $HIPPING clarifies which value to use during shipping.


Who is Responsible for Damage to Work On Consignment?

A question from Pei Sze, student at Academy of Art, San Francisco: "If we put our works on consignment and it gets damaged, who is usually responsible for the damage?"

CONSIGNMENT Contract from the Professional Guidelinesact2010_Page_1The ANSWER is in your consignment contract. BEFORE SENDING WORK or delivering work to a gallery or store, ALWAYS discuss the consignment contract. The Professional Guidelines has a Consignment Contract that will help negotiate this and other issues before there is a problem.

CONSIGNMENT Contract from the Professional GuidelinesIn the Professional Guidelines Consignment Contract look in:

Section 8. Loss or Damage.
"The gallery shall be strictly liable for loss or damage to any consigned artwork from the date of delivery to the gallery until the artwork is returned to the artist or delivered to a purchaser. CONSIGNMENT Contract from the Professional Guidelines In the event of loss or damage that cannot be restored, the artist shall receive the same amount as if the artwork had been sold at the retail price. 
If restoration is suggested or pursued by the gallery, the artist shall have veto power over the choice of the restorer.  CONSIGNMENT Contract from the Professional GuidelinesThe artist shall be responsible for all repairs to artwork necessitated by artist’s faulty workmanship."

To explain  further:
If damaged work can be repaired or restored, the artist should be compensated for the time and materials for repair.

CONSIGNMENT Contract from the Professional GuidelinesIf the work is lost or damaged: The artist or maker should be paid the wholesale price.This is the "same amount" that the artist would have received "if the artwork had been sold at the retail price."

CONSIGNMENT Contract from the Professional Guidelines"Even in the best relationships based on trust and a good working relationship, there is no substitute for a contract.  To minimize and hopefully avoid possible conflicts, the rights and obligations of both the artist and the gallery should be clearly written in a contract. 

Do not rely on assumptions and the memories of verbal conversations.  CONSIGNMENT Contract from the Professional GuidelinesA good contract, such as the consignment contract developed by the Professional Guidelines, is fair to both parties.  It is in the interest of both parties to discuss all the issues presented here."

CONSIGNMENT Contract from the Professional Guidelines"Many galleries are accustomed to using their own contract.  If the gallery already has a contract that it wants to use, it can be signed “as is”, or it can be viewed as a starting point for further discussion.  The artist can use the Professional Guidelines example contract as a checklist or guide for negotiating modifications and revisions.  CONSIGNMENT Contract from the Professional GuidelinesYour business relationship with the gallery may include specific arrangements that require additions or deletions, which you should initial.  In addition, amendments that arise after the original contract has been signed should also be put in writing and signed by both parties (see clause #18)."

The above text in quotes was taken directly from the Consignment Contract in the Professional Guidelines.

Below are copies of the Consignment Contract in the Professional Guidelines as a Word and PDF.

Download CONSIGNMENTcontract2010 Word
Download CONSIGNMENTcontract2010 PDF

Please feel welcome to share this with your friends and fellow artists.

Harriete


Is it ethical for a gallery to put consignment items in storage?

A reader of ASK Harriete asks:
Is it ethical for a gallery to put consignment items in storage? And if yes, is it ethical to do so without notifying the artist?

Pam Yellow Butter Flower Pin by Harriete Estel Berman72
PAM All Natural Butter Flower © 2011
Post Consumer recycled plastic and tin
cans
Artist: Harriete Estel Berman

Galleries and stores that call themselves "galleries" rarely can exhibit everything they have in inventory. This is especially true for a venue that wants to present a more refined, organized and uncluttered appearance. Most likely it is  necessary to put some work in drawers, boxes or in racks behind the scenes.


Password Flower Pin by Harriete Estel Berman72Galleries often have a storage room off limits to customers where they keep extra work. This allows the gallery to dedicate most of the exhibition space to the artists in the current show.

Password Flower Pin (back view)  by Harriete Estel Berman
  Password Revealing Glasses Flower Pin
  Harriete Estel Berman © 2011
  Post consumer recycled tin cans

A well informed staff will bring out work from storage for clients interested in a specific artist or style of work.

So the answers to the questions:
YES,YES
......However, I would like to add some provisos to the "YES".

Amaretti Flower Brooch by Harriete Estel Berman72 The staff should always offer to bring out more work that may be in drawers, shelves or storage.

Work behind the scenes should be organized and accessible so the staff can find it easily.

Amaretti Flower Pin by Harriete Estel Berman (back view)
Amaretti Flower Pin      © 2011
Post consumer recycled tins
Artist: Harriete Estel Berman

I don't think that work on consignment (and presumably for sale) should be dirty, covered with fingerprints or tarnished. Framed items should be handled carefully in the racks. The frame and glass should not be dirty. 

 

If you are concerned that your work is not on display, I would speak with the gallery or store before leaving more work. This can be really difficult to do, but present your concerns in a polite manner. Ask questions rather than make accusations.
 
Flower Pin Cadbury Woman Picking Behind the Curtain and Top Hat Man by Harriete Estel Berman72 Perhaps, the gallery/store routinely circulates work on consignment into the display area.  If you live nearby, you could update items at the gallery, leaving recent photographs, painting, etc. representing new work, and take home the "older" artwork. Maybe the gallery will give your work more visibility if they have "new" work to show their customers.

Red Hots Flower Pin Back view by Harriete Estel Berman72
 Red Hot Flower Pin © 2011
 Post recycled tin cans
 Artist: Harriete Estel Berman

If you live far from the gallery, frequent interaction may be difficult. Shipping work can be expensive for the artist and the gallery. Call in advance and ask if they would like fresh work before shipping new work . . . and make sure that they plan to return the older work in their consignment inventory.

Keep accurate records.  Update  inventory records of work on consignment.

Red Hots Flower Pin by Harriete Estel Berman The best galleries and stores send an updated Inventory Record on a regular basis.  If your gallery/store hasn't done this in a while, send them two copies of your Inventory Record with a request to verify inventory and mail/email back a signed, dated copy so that everyone is on the same page. If the gallery/store does not honor your request for an updated inventory record (every 3 - 6 months) for art or craft on consignment, I recommend that you request they return all artwork to you within a  reasonable length of time (e.g. two weeks).

This may sound like a harsh recommendation, but if artists keep leaving work on consignment without the minimum inventory accounting, you are just asking for Trouble (with a capital T).  Too many sad stories start with poor inventory management.

Does this answer help you?

Harriete

 


Commission Structures with Galleries - Are they negotiable?

In response to the recent posts about Delinquent Payment Issues there were numerous comments about consignment agreements, several implying that the consignment percentage between the artist and the gallery is negotiable.

Balance-scale-unbalanced It has been my experience that most retail galleries will NOT negotiate their consignment commission structure below 50 percent (unless you are super famous or your work is in the high end range of $40,000 or higher).  Most galleries expect a 50/50 split with the artist, while some galleries are moving toward 60 /40 or that range (with the 40 going to the artist).

While I don’t approve of 60 /40 (with 40 going to the artist) and won’t agree to it….sometimes this stance puts me in a difficult situation.

Most of all, it is important to keep your prices as close to the same across the U.S. as best as possible. If the prices are higher at one gallery compared to another retail location for the same or similar items, the entire inventory comes into question.  Collectors/buyers DO notice the difference.  I have actually had a collector ask me why the prices were higher at "so & so's" gallery. (Clear evidence that they do compare prices.)

Cash-flowgr Some galleries suggest to the artist, "just tell me your wholesale price....then we will add our percentage." The gallery may sincerely intend that the artist receives the requested wholesale price.  However, the artist is still responsible for retail price consistency in various venues. 

Some galleries try to justify a higher commission (more than 50%) because their "expenses have increased."  While I am sympathetic that costs continue to rise, I just don't buy the suggestion that artists' expenses have not increased as well. 

As operating businesses, galleries tend to be much more aware of their expenses such as rent, insurance, staff salaries, employment taxes, utilities and advertising.  They KNOW how much it costs per month to stay open.  

Artists also have overhead expenses but tend to price their work in proportion to their direct labor and materials only.  Most artists are not pricing their work high enough to actually cover their overhead expenses such as rent, utilities, photography, bookkeeping labor, office supplies, tool purchases, equipment, etc.   Artists frequently don't realize they didn't make money until the end of the year when they fill out their tax return.   

It seems to me that the difference between galleries and artists is that galleries are fully conscious of ALL their expenses (direct and overhead) and their monthly bottom line.

Dollargr

The 50/50 split reflects a partnership between the artist and the gallery.  Each supports the other.

Harriete


Good Galleries Gone Bad - 6 Steps to Take if Your Gallery is Not Paying You on Time by Victoria Lansford

In today's post Victoria Lansford offers us six steps to take if your gallery in not paying on time. With this tough economy early intervention may prevent work from disappearing and the additional loss of potential revenue. We need to work together artists, galleries and the entire arts community. Let's not let a few bad apples influence the entire marketplace. 

Previous posts in this series include:

Good Galleries Gone Bad - Don't Let This Happen to You by Victoria Lansford,

Good Galleries Gone Bad - Don't Let This Happen to You by Jen Townsend

Good Galleries Gone Bad - The Saga Continues...Time to Sue - from Victoria Lansford

Good Galleries Gone Bad - Don't Let This Happen to You! Prevent Delinquent Payments

Note: The opinions expressed by the author, Victoria Lansford in this post are hers and hers alone, and do not necessarily reflect the opinions of ASKHarriete or Harriete Estel Berman. No endorsement or refutation is intended or implied.

Portrait of Victoria Lansford FROM THE PEN OF VICTORIA Lansford:
If this "Good Gallery Gone Bad" happens to you:

1.  Get your work out of there!  If they won't send it back, find someone in the area (a friend, a friend of a friend, etc.) who can pick it up for you.  Provide him/her with a letter signed by you, stating that she/he is acting as your agent and has the authority to remove your work and an inventory list of your work.  Let the person know the gallery's store hours then let the visit be a complete surprise.  Consignment means that the artist owns the work until it is sold.  You or your agent are merely removing what is yours.  If you can't find someone to pick up the work and can't go yourself, keep calling and emailing.  If they don't return it, it's probably a red flag that they have sold part or all of it and aren't paying you for it.

Dollars in hand 2.  Remember, It's your money!!!  Do not give up too easily.  Yes, pursuing money you are owed can be time consuming and costly, so were the labor and materials that you put into the work for which you have not been paid.  Less ethical people tend to do what they know they can get away with, so if an owner owes you money and believes that you won't pursue getting paid, you could easily end up at the bottom of a long list of creditors and never see a dime.  

3.  Not just any type of lawyer will do.  You need one with experience in contract law.  Many lawyers will give a free initial phone consultation, so you can find out if they can help.  Get your paperwork together and give a concise account of what happened.  If legal help is too expensive, most states have "Lawyers for the Arts" type organizations, who will work pro-bono or on a sliding scale.
Telephone
4.  Keep up the phone calls, letters, and emails! 
This is one time when being a nuisance isn't just OK; it's necessary. 

5.  Breathe!  You may be victimized, but you don't have to be a victim.  By not giving up, you are doing your part to help keep the system safe and honest for yourself and your community.  You may or may not eventually get paid, but you will know that you didn't go down without a fight and may find that your future dealings with consigning with galleries is a more business like and professional experience.

6.  Consider creating a piece or series inspired by your experience.  I don't mean to make light of the situation by suggesting that you turn lemons into the proverbial lemonade.  Artists, who have work stolen sometimes have trouble with "artist's block" afterward.  Consciously working through your frustrations by doing what you love may have a cathartic effect.  Who knows?  If you sell the work, you could at least get paid for some of your frustration.

Eyebeholdergreen
Eye of the Beholder Pin © 2009
Recycled tin cans, sterling silver rivets,
pin stem
Artist: Harriete Estel Berman
Purchase Online

FROM THE PEN OF ASK HARRIETE:
I particularly like Step 1. and Step 2.  Go ahead, take your work out of the gallery if they are not paying on time. Every story that I have ever heard about poor payment or no payment started with late payment. This is your warning sign, like a sore throat, you know trouble may be coming.

Chasing Payment Over the Telephone Brooch by Harriete Estel Berman has a sterling silver chasing hammer over telephone as a pun.
  Chasing Payment Over the Telephone
  Pin © 2010 Harriete Estel Berman
  Recycled tin cans, sterling rivets and
  chasing hammer, plastic ring.

Are you in business to loan money? Do you  really think the situation will change if you continue to leave your work at the gallery? What motivation do these Good Galleries Gone Bad have to change? Absolutely none if artists continue to avoid looking into   a bad situation and take no action.

Stand up, and be counted as an artist who no longer is willing to act like a doormat and be stepped on.

Your professional behavior goes in all directions. Act like a professional in every aspect of your business. The Professional Guidelines offers 19 documents to assist and standardize professional practices in the arts and crafts community. Use this information to improve your artistic success. Let me know what topics would be helpful to you.

Harriete   


Good Galleries Gone Bad - Don't Let This Happen to You! Preventing Delinquent Payments

Victoria Lansford is the guest author for ASK Harriete as she tells us a couple of ways to prevent delinquent payments from galleries. She creates one-of-a-kind wearable art in precious metals and unique stones and is the author/producer of the Metal Techniques of Bronze Age Masters: All Chained Up book and DVD series.

Previous posts in this series include:
Good Galleries Gone Bad - Don't Let This Happen to You by Victoria Lansford,

Good Galleries Gone Bad - Don't Let This Happen to You by Jen Townsend

Good Galleries Gone Bad - The Saga Continues...Time to Sue - from Victoria Lansford

Photo of Victoria Lansford Note: The opinions expressed by the author,Victoria Lansford in this post are hers and hers alone, and do not necessarily reflect the opinions of ASKHarriete or Harriete Estel Berman. No endorsement or refutation is intended or implied.

Preventing delinquent payment situation:

1.  Always obtain a signed contract before sending any work to a gallery.  It's becoming more common for galleries to send contracts via email, which the artists print, sign, and return with their artwork.  Because these documents are created in Word or Pages rather than scanned in, they are often unsigned by the gallery owner or manager.  DO NOT send your work until you have obtained a signed copy of the contract.  If you have to file a legal claim, an unsigned contract won't help your case and can certainly make you appear less than professional and an easy target.

2.  Get references about a prospective gallery.  Discover other artists that they represent and contact them directly to ask of their experiences concerning timely payment, the condition of returned work, and the accessibility of the owner or manager.

Past Due Notice 3.  If checks are few and far between from a gallery, contact other artists that they represent and determine if it's because sales are slow or because the gallery is not paying.

4.  Keep in contact with the galleries that carry your work on a consistent basis.  It's easy to check in every month or so via email without seeming like a pest.  You can let them know of new work you are creating and find out what interest there has been in your work, both of which can be helpful under any circumstances. 

FROM ASK HARRIETE:
The Professional Guidelines offers an excellent Consignment Contract with a complete overview explaining every clause. This can be found on my web site under the PROFESSIONAL GUIDELINES link or CLICK HERE.  The Professional Guidelines can also be found on the SNAG web site.

PGlogohorizontal

Here are the three Contracts currently available in the Professional Guidelines.

CONSIGNMENT CONTRACT

EXHIBITION CONTRACT

MODEL RELEASE CONTRACT

In the next post, tomorrow, Victoria will give us six steps to take if your Gallery has not paid you on time. Each step is simple, straight forward and relatively easy to do. With this poor economy, artists need to learn to be better advocates for themselves and each other in the arts and crafts community. If you have suggestions about how you have worked to prevent a poor payment problem, please share it as a comment. CLICK on the word COMMENT below this post.

Harriete



Good Galleries Gone Bad - The Saga Continues...Time to Sue - from Victoria Lansford

This is the third post in the series about Good Galleries Gone Bad by Victoria Lansford .
Let's get smart and business savvy and take these words of wisdom to heart, they're worth their weight in gold (even if you work in other materials).

In this post Victoria describes her experience when she wasn't paid for her work and her next steps to handle this difficult situation. In you missed the beginning of the story, the first two posts were:
Good Galleries Gone Bad - Don't Let This Happen to You by Victoria Lansford,

Good Galleries Gone Bad - Don't Let This Happen to You by Jen Townsend

Parallel Universe Woven Wire Bracelet by Victoria Lansford
 Parallel Universe
 Side Weave Mesh bracelet with a
 granulation clasp, sterling, fine silver,
 22K gold, dolomite.
 7" long x 1-1/2" wide
 Victoria Lansford   © 2001

Victoria Lansford creates one-of-a-kind wearable art in precious metals and unique stones.  She is also the author of the book, Metal Techniques of Bronze Age Masters: All Chained Up, and producer of the related DVD series. Future posts include tips on preventing delinquent payments, steps to take if your gallery is not paying on time, and more (including the opinion of Lansford's lawyer Chris Balch). 



Note: The opinions expressed by the author, Victoria Lansford, in this post are hers and hers alone, and do not necessarily reflect the opinions of ASKHarriete or Harriete Estel Berman. No endorsement or refutation is intended or implied.

FROM THE PEN OF VICTORIA LANSFORD:
Ironically, soon after connecting with Jen and also with Zaruba & Zaruba’s former manager, Andrew called me with effusive apologies for not paying.  He claims to have an investor lined up and will pay me on May 21.  The date came and went without a check, and the phone message I left with his employee was not returned. It’s frustrating not being able to count on that money. To paraphrase Boris Bally’s earlier post on this issue, I’m an artist not a bank.  I don’t lend money to other businesses.

Entwine Necklace by Victoria Lansford
  Russian Filigree and Roman Chain
  © 2001 Victoria Lansford
  Necklace:22K gold, sterling-platinum,
  fine silver, chrysocolla drusy
  Pendant portion 3" long,   16" chain

Even more painful than the loss of income is how I feel about the pieces that I had sent to Twist of My Wrist.  I consider them stolen and am listing them as such on my website.  While Andrew has dragged things out and made his cash flow problems mine, I know that my artwork sold.
Some appreciative, yet unsuspecting customer is enjoying my one of a kind pieces for which the artist was never paid. Or my work could have been sold, stuck in some storage box somewhere, or melted down for the metal and the stones cut out.  The thought of all those hours of my life (that went into those pieces that are gone) haunts me and remains in the back of my head each time I work at my bench.  They were not merely cheap imports that I wholesale; my vision and my passion are bound up in them wherever they may have gone.

Victoria Lansford Star Dust Sleeve Cuff
  "Stardust on My Sleeve"
  Russian Filigree Hinged Cuff Bracelet
  22K Gold, Fine & Sterling Silver,
  Koroit Opals
  2-3/4” long x 2” wide x 1/2" high
  (Quotations around title indicate that
  it is taken from song lyrics)
  ©  Victoria Lansford  2001

Conclusion:
Both Jen and I relied on having contracts to protect us.  From a legal standpoint, they do, but that doesn't mean that they don't require enforcing.  Since Andre Zaruba's repeated promises of payments by specific dates have not been fulfilled, I have filed suit against him and Zaruba & Zaruba.  I'm in Georgia but will file in the gallery's state, Maryland, which may mean that I and/or my lawyer will have to go there if the suit goes to trial.  Suing Twist of My Wrist is trickier since the owners have disappeared, but I haven't entirely given up.  I keep the problem in perspective and will balance the amount of energy I put into it with doing what I love, creating more art,.  Still I have a responsibility to pursue these issues for myself, my family, who depend on me, and my community of artists. Stay tuned for more updates on ASK Harriete ....as this case develops.

FROM THE PEN OF HARRIETE:
I asked Victoria to tell us lessons she has learned and how to prevent this situation from happening to any other artists and crafts persons.

Next week she is going to offer us practical steps to implement if a good gallery has gone bad.

Harriete


My gallery isn't paying me on time, help! What should I do?

Harriete,

My gallery isn't paying me on time. They are well known with an established reputation, so I thought their representation of me would work out great.  Indeed they sold some of my work more than a few months ago.  However, when I've called them about paying for the work, they say there are some bookkeeping errors or "the check is in the mail" but it is only partial payment.  This has been going on for months! What should I do?

Without income,

A desperate and embarrassed artist.

CHECK MAILBOX This letter paraphrases a common problem that I hear from artists, over and over. Artists are frequently not paid on time, or maybe not paid at all.  This is an old story, but it seems that with these hard economic times it happens more frequently.

Galleries usually pay their bills once a month. That means that consignment items sold may (by contract) be paid as much as 30 days after the purchase. Your payment schedule should be written into your contract or on your invoice.

Some stores purchase work outright as inventory.  After developing an ongoing relationship, the store may request a Net 30 invoice arrangement (i.e. payment will be made within 30 days after delivery).

What I am talking about here is overdue payments months after items are purchased. These delinquent galleries or stores are giving themselves an interest-free loan out of your money.  I am sure that if a collector/buyer heard that they had paid a gallery or store for work and the artist was not paid in a timely manner, they would be embarrassed and appalled.

The real issue is what can artists do about this problem.  Should you keep sending work to establishments that don't pay on time? Should we keep these secrets to ourselves?

Check references  Before you send work to any gallery or establishment, check with some other artists or makers previously represented there.  A few minutes of calling around can give you plenty of information to make a "yes" or "no" decision.  Or if an ongoing gallery starts paying slower, check with other represented artists to see if they are having similar problems. 

Contract Terms   Your contract with the gallery should include terms of payment.  The Professional Guidelines offers a sample Consignment Contract that can easily be modified to suit both parties and adapted to the situation. An accumulating penalty for late payment may also be specified. 

CheckHAND Initial purchases from a store should be paid in full before merchandise is shipped.  Develop a payment track record over several transactions and check credit references before agreeing to a NET 30 arrangement.  (More information with a sample NET 30 Application will be posted next week.)

Documentation   You may have to prove that the store received your work and that you are due payment (whether they sold it or lost it).  Keep shipping receipts and Inventory Lists.  Get signatures on receipts and save email acknowledgments .  Take photos.  If there is ever a dispute, documentation is better than "your word against theirs."

SHIPPINGboxIf the retail establishment becomes "slow" regarding payments, discuss this issue over the phone first.  Find out about their reasons for late payment.  Maybe you need to be more assertive (e.g. the squeaky wheel) and a better advocate for your business cash flow.  (Note....I said assertive, not rude. There is never any reason to lose your temper or act unprofessionally.)

However, at some point you may have to take action. You may decide that it is time to discontinue selling at this particular venue and request that all your work be returned. Potentially, if every artist and maker who had work at a gallery or store, politely asked for all the unsold work back, or refused to send additional merchandise, this retail location would have to change its practices or go out of business. 

I know that we are all desperate to sell our work and that retail purchases are slow in this bad economy.  But if payment is even slower, then you must take responsibility to make a decision and move on. 

Invoice past due Another idea   We can help each other by spreading the word about delinquent operators.  We could share information about our own experiences and help inform other artists and makers and not let them fall victim to irresponsible venues. 

While most galleries and stores are honest and pay promptly, maybe a few disorganized and delinquent accounts are the "bad apples". Until we openly discuss these problems, the bad apples will continue to plague our community.  We can help each other with discourse and transparency to weed out the rotten few.

Artists, Collectors, and Galleries, this is a call to action!

Have any of you suffered from a similar situation?  Would you be willing to share your story? Do you know a gallery that is paying artist's chronically late?  Are you holding a heavy secret to avoid embarrassment?

The time has come to create visibility and transparency for this issue.  Can we maintain a list of good and bad venues like the Better Business Bureau?  Let's be better advocates for ourselves. Tell your fellow artists out loud that you are having a problem with slow payment.

Write down your opinion and experience as a comment here below this post.

Harriete
www.harriete-estel-berman.info



The artist / gallery relationship - Does one size fit all?

Gallery

Traditionally the artist gallery / relationship has been clearly delineated.   The artist made the artwork or craft. The gallery took responsibility for all marketing and sales.  This model is simple and the two domains are served by different skills and expertise.  In effect. however, it is a one-size-fits-all scenario. 

The reality is that business models can be much more complex and apply a range of skills and expertise to varying degrees.   Some artists are in fact quite adept at marketing and sales.  Some galleries are better than others in taking advantage of new technologies and resources and addressing shifting consumer sentiments.  

This is not a new discussion.  Since the dawn of the industrial revolution, manufacturers have chosen whether to sell direct or to sell through distributors and retail channels.  Kelloggs

In many examples, manufacturers focused on making products; and let their retailers focus on marketing and sales.  Kellogg's sells cereal through grocery stores.  Tylenol sells pills through drug stores and convenience stores.  Neither sells directly from the factory.

Dell


At the opposite extreme, Dell and Apple decided to cut out the middle man because they thought they could do it better.  And both are extremely successful. The irony is that Apple created its own retail outlets through Apple stores and Dell has no retail outlets at all.

Apple

And there are many variations. 

Here is a hybrid model.  Cell phones are sold through service provider outlets like Sprint, Verizon, and AT&T.  In addition to their own stores, they also sell through other retail channels like Best Buy and Radio Shack, and many retail websites.

Some clothing manufactures are selling directly from their websites, some aren't.  Some, like Lands End, do both.

Kohler (a well known plumbing fixtures manufacturer) doesn't sell from their factory, but they sell one line of lower priced products through Home Depot and a premium line to their more exclusive retail outlets.  Most people don't realize the distinction in the two product lines until they study the products carefully or talk to a plumber.

There are many different business models that are quite effective in the marketplace.  Who is right?  The real point is that a variety of business models can be effective, i.e. the business model is not sacrosanct.  There is a spectrum of possible models and they all can succeed or fail for reasons beyond the business model.

One model does not fit all situations.  The 50% commission (or 50/50 artist/gallery) model has been around a long time.  I think it is time to reconsider and create some new business models.   I am not saying that the 50/50 model is bad, but it is not ideal for all scenarios.

How and when would some variation of other business models work?  In what situations would another business model be more effective?

What do you think?  Are you marketing your work online independently?  How do you or would you coordinate your marketing with a gallery?  Share your ideas about the changing artist/gallery relationship.  I'm going to continue this discussion in a series of upcoming posts.

SPECIAL NOTE:   Next week, October 17 - 19, 2009, I will be attending the ACC Conference in Minneapolis and blogging about the lectures and discussions.  Subscribe to my blog so that you can get the daily updates.  Hear what Rob Walker  has to say about 2.0 Marketing and the panel discussion with Namita Wiggers, Riding the Long Tail, Marketing Craft on the Internet.

Harriete
www.harriete-estel-berman.info


Online Marketing Tips - Galleries and Virtual Galleries

Online marketing is here to stay and will only expand its impact in the future.  Increasingly, potential buyers will explore online "virtual galleries" before going to a show or visiting a town to decide how and what to see with their time and energy.  Gallery and artist web sites need to adapt to this trend and to the growing role of virtual galleries.

HarrieteBerman1
"Your Not Just for" Lifesaver Bracelet
Recycled tin cans, 10k gold rivets
Artist: Harriete Estel Berman
Photo Credit: Philip Cohen
Mobilia Gallery

Virtual galleries and physical galleries each have distinct advantages and disadvantages.  They should be synergistic.  They are both under the control of the gallery owner.  However, it seems that most galleries currently limit the number of images on their "virtual gallery" websites.  The reasons may vary, but often are along the lines of trying to encourage online visitors to walk into the gallery to see and experience more work at the gallery in person.  I fully agree that most buyers indeed want to see the work personally before purchase.  This is only one reason why physical galleries will continue to fulfill a unique role in the art and craft community.  Galleries offer the thrill of shopping, viewing and maybe even touching the work, in person. 

Opportunities lost.  My personal opinion is that the Internet offers an amazingly effective outreach to the widest possible audience.   Any buyer who is mildly interested in a piece may be stimulated into visiting the gallery by finding and seeing an image online first.  But if they can't find it online, why visit at all?  An Internet-surfing shopper is LESS likely to visit a gallery if the website does not show an image that interests them.  Instead, the virtual gallery should give the surfing shopper every opportunity to find an image that will cause them to visit the physical gallery. 

BR3-3-07_cu
"Your Not Just" Lifesaver Bracelet (close-up)
Recycled tin cans, 10k gold rivets
Artist: Harriete Estel Berman
Photo Credit: Philip Cohen
Mobilia Gallery

ALL work should be exhibited online.  This should become the new standard for every gallery, show, and exhibition.  With this approach the gallery's web site can also function as a catalog without the expense and environmental impact of printing.  This web page can remain indefinitely as an archive for future reference.

Within a gallery's website, each artist represented by the gallery should have a whole page (or preferably pages) dedicated to the artist's portfolio and profile. Every exhibition at the gallery should have internal links from the artist's name and work in that particular show to the artist's portfolio page. 

The gallery should also link to the artist's web site.  While linking to the artist's web site may seem counter-intuitive to the gallery, they can not prevent people from taking five more seconds on their own for a search on the artist and finding the artist's web site.  The link to the artist's web site is another way that the gallery provides a service to the client. 

BR3-3-07b_cu
"Your Not Just" Lifesaver Bracelet (close-up)
Recycled tin cans, 10k gold rivets
Artist: Harriete Estel Berman
Photo Credit: Philip Cohen
Mobilia Gallery

It's a two way street.  Artists should link to galleries and any shows or exhibitions that include their work. The Internet is a web of information and the best way to attract buyers is to give them every opportunity and every possible path to find you. 

The artist/gallery relationship is evolving into a new paradigm.  Buyers are using the Internet to choose how they will spend their time and money.  Consequently, both the gallery and the artist need to adapt to take advantage of this new reality.   

What do you think? I'd like to hear your opinion about this new idea.  Either leave a comment or email me directly by CLICKING HERE.

Harriete
www.harriete-estel-berman.info


Online Marketing - Gallery and Artist Collaboration


Galleries have traditionally been the primary conduit for buyers to find quality art and craft. The galleries were responsible for marketing and promotion as well as supporting a physical retail space to show art and craft. Artists and makers typically felt ill at ease in such marketing efforts (with the exception of wholesale/retail shows) and preferred to devote their time to the studio.

The Internet has changed the equation - permanently. 

MIRRORculadies72
Identity Complex Mirror          2002-2004
Recycled tin cans.
Photo Credit: Philip Cohen

One of the new realities is that artists and makers CAN market and promote their work via the Internet without gallery representation.  Potential buyers CAN find artists and makers without gallery vetting. The days are past when clients can only find an artist exclusively through a gallery. 

However, in an age of information overload, galleries still offer authoritative credibility regarding the merit of represented work.  For the client, galleries also offer expert guidance, appraisals, and insight well beyond the mere display space for viewing.  For the artist and maker, galleries offer skilled promotion and reliable sales support.


MIRRORfull72
Identity Complex Mirror          2002-2004
Recycled tin cans.
Photo Credit: Philip Cohen

But the Internet is a multi-lane highway connecting many destinations. So here is a radical idea . . .  Artists and galleries need to work together in their marketing efforts.

Huge opportunities are lost when galleries and artists don't act as a team to fully benefit from their respective resources.

Artists need to have their own web sites for credibility and visibility. Galleries need to use the Internet more effectively to showcase all the work for which they are responsible. An exhibition should no longer be presented to the public as one image on a postcard or one page on a web site. With minimal expense, the entire exhibition can be posted as an online catalog of the show.

Galleries and artists can both be more effective with online marketing.  Improved SEO (Search Engine Optimization) is one goal, i.e. a bigger "web" of links (more links earns a higher rating).  SEO can drive more traffic to the web sites of both the gallery and the artist. 


Galleries can benefit by linking to all artists' inventory and exhibition pages.   Artists should email and post on the their websites any relevant gallery link such as upcoming events, openings, exhibitions, juried shows, etc.  

Likewise, artists can benefit by helping galleries link to any new resources such as newspa

Idmirrch  
Identity Complex Mirror          2002-2004
Recycled tin cans.
Photo Credit: Philip Cohen

per reviews, magazine articles, open studios, or selection into books.


Both parties need to trust that purchases generated as a result of either w

eb site will be positive and boost credibility, visibility and revenue.

If a customer arrives at my site via the gallery's web site and purchases work from my site, hopefully we can work out the appropriate commission for the gallery. 

Commission strategies need to be reconsidered.  This is an area that needs a lot more discussion.  For example, the web sites for both the gallery and the artist could set up affiliate links that pay commissions in both directions.  There are many other mutually rewarding scenarios that encourage ongoing collaboration.  We need to adapt to a new future. 

Yes there are areas of overlap that will need negotiation. But realistically, was there ever a time without issues to discuss?  I expect to revisit this topic in the near future.

Like it or not, the multi-lane highway of the Internet is going to get bigger and better.  A collaborative effort can be mutually beneficial.

Do you have any ideas or comments? I wonder if the upcoming ACC Conference in Minneapolis will touch on this topic? Stay tuned to my blogs from the Conference in two weeks.

Harriete
www.harriete-estel-berman.info

 


Consignment Contract Closed - What shall I do?

Dear Ask Harriete,

I've had a consignment relationship with a gallery in my hometown for three years. My work has been selling regularly (about one piece a month) and occasionally I get commissions through them.  Our current contract goes to January 2008.  Yesterday, I got a curt phone call from the gallery manager informing me that the owner of the gallery has decided that she detests my work and wants it out of her store yesterday.  But we have a contract! What should I do? The whole thing has me very upset.
- Confused & Hurt

Dear Confused and Hurt,
Prepare yourself to move on and look to the future. Yes, the gallery owner should honor the remainder of the contract.  Alternatively, after communicating her new opinion to you, the gallery should have “offered” to let you agree to terminate the contract early, if both parties mutually agree to terminate.  However, in this case, even if you had the will or means to legally force the gallery to continue representing your work until January, do you really want this gallery to represent your work further?   If your work is displayed at all, it would be in the least desirable location, perhaps in a bottom drawer in a dark corner.  Trying to enforce the contract for only three months can only create additional ill will.

Most importantly, how do YOU want to be viewed in the art community?  The gallery owner has behaved poorly.  Therefore, I think your best course of action is to put on your professional and most pleasant “face.”  Reply immediately with your preference for return shipping (for example USPS, registered, insured mail) and say something to the affect that you “have enjoyed working with the gallery and feel that it has been a productive relationship.”  Keep on the best terms possible.  You might also thank them for representing your work for so many years and that sometime in the future, when you have a new body of work, you will contact them with images of your new line.  With this most positive and professional reply, perhaps next time they host a group show, they might consider including your work if it is appropriate to the theme.

When you receive the returned work, unpack and check the condition of the work within three days or less.  If everything is returned in good condition, follow up with a letter or email saying that the work arrived safely and in good condition and that you will look forward to working with them in the future.

Your reputation as a professional is important. Artists and galleries do talk among themselves.  Your demeanor in this difficult situation will hopefully show other galleries that you work as a professional and a new gallery will want to represent you soon.

Contracts only help to organize an ongoing business relationship.  If the relationship is finished, then the contract does little to revive it.  The real value of a contract is to convey the initial intentions of both parties – to itemize mutual agreement on specific items and to guide preferences for handling most potential situations (such as early termination of the contract or subsequent modifications to the contract).  As business relationships change,  expect that contracts should be modified or terminated accordingly. 
Sincerely,
Harriete Estel Berman
bermaid@harriete-estel-berman.info
www.harriete-estel-berman.info


Expectations of Exclusivity

Dear Harriete,
What is a reasonable expectation of exclusivity for a gallery/store? I am negotiating a contract with a store in another state and they want me to agree to them being my exclusive rep in that state. This doesn't sound reasonable to me. Am I crazy or what? I feel I'm being taken for a ride.
Sincerely,
Afraid of Being Taken Advantage Of

Dear Afraid of Being Taken;
Exclusivity can be a very complex issue.  In simple terms, Exclusivity means that the gallery will be the only agent representing the artist’s work usually within a defined geographical area or for a defined group of work.   In practice, Exclusivity can have many nuances and variables.  Ultimately, an agreement (contract) between the artist and the gallery spells out the specifics of the relationship regarding Exclusivity and other items (see Professional Guidelines sample contract).

It is fairly common for galleries to request some degree of exclusivity when agreeing to represent an artist’s work.   From the gallery’s point of view, they may be planning to invest in marketing efforts to promote your work such as retail display space, an opening event, mailings, advertising, or direct communication with their collectors.  For such effort and expenditures, the gallery is justified in seeking to avoid being circumvented and losing commission income on sales that they have generated or supported.

FROM THE ARTIST'S POINT OF VIEW
From the artist’s point of view, a gallery that diligently promotes your work can be invaluable, especially if you could not or would not generate the same level of visibility to sell work.  However, the gallery should be expected to earn the privilege of this Exclusivity.  In a real sense, the gallery is working for you – and you need to evaluate what sales opportunities you gain or sacrifice by granting exclusivity to this gallery.  If you realistically do not lose any sales from another venue or opportunity, then the granting of exclusivity does not really cost you anything.  If the requested exclusivity creates a conflict or is inconsistent with arrangements with other retail venues or exhibition opportunities, then you should negotiate further to minimize such conflicts. 

LIMITATIONS OF EXCLUSIVITY
In an agreement with a gallery, exclusivity may be limited to a state, city, art show, or by a particular group of work (such as jewelry or sculpture) or by a particular series of work (e.g. bracelets from the “blue group” and not the “red group”).   In exchange for the grant of exclusivity, the agreement should also acknowledge or specify the gallery’s responsibility for promotion.   Exclusivity may be granted initially, but may be contingent on a time limit (such as 12 months) or on a minimum dollar volume sold during a specific period of time.

Going back to your specific situation, it is not unusual for a gallery to request exclusivity within a state. However, the real issue is whether the gallery will adequately represent your work and generate enough sales from the entire state to justify this exclusive relationship.

SOME QUESTIONS TO CONSIDER:
Does the gallery have visibility and a reputation sufficient to cover that entire state? 
How are they able to adequately promote your work and attract attention throughout the entire state?
Do they advertise statewide? 
Is there another gallery in the same state that would like to show your work? 
Are there wholesale/retail shows in that state in which you would like to sell your work?
Who is their competitor?
Would you be able to participate in special exhibition opportunities at other galleries, non-profits or museums within their exclusive territory?
Will the gallery allow you work to be shown at another gallery or special exhibition within their  exclusive territory ?
How would potential purchase of your work at a special exhibition opportunity be handled under your exclusive relationship with this gallery?

WILL AN EXCLUSIVITY ARRANGEMENT AFFECT PREVIOUSLY ESTABLISHED ACCOUNTS?
If you do not have any previously established accounts (gallery or shows) in this state, then perhaps you are thinking that you MIGHT lose sales from other sources.  If this is your primary concern, then a positive business relationship  with the gallery – including some degree of exclusivity – seems like a reasonable decision.

On the other hand, if you have pre-existing accounts with other stores, galleries or shows, then you should have some idea how much money is generated on average from these other venues.  If you would lose these existing sources of revenue by granting exclusivity to the gallery, then what is the net gain – or loss?  Tell the gallery that you have these existing sources of revenue (they may not be aware of them).  The gallery may be willing to exempt these specific sources or compromise.   Or they may decline to represent you at all if they realize that they can not compete with these other retail locations.   Be professional about the discussion.  The gallery is seeking to maximize their revenue and so are you.   You are offering to sell your artwork through this gallery and they are offering a market in which to sell your work.  It should be a mutually beneficial relationship.   

Another option would be to agree to the exclusive relationship for a specific group of work.  Grant exclusivity to the gallery for a particular line only, or a series, or make a special group of work. This way the gallery would have an “exclusive” of some of your work though not on everything. Some galleries may think this is just fine, others may not agree.  Remember everything is negotiable.

EXCLUSIVITY AND THE INTERNET AND COLLECTORS
Two challenging areas to define under an exclusivity clause in a contract -- the Internet and collectors.   

The INTERNET
The Internet has no state  boundaries.  If you invested time and money into your web site to expand your marketing sphere, how would customers attracted to your web site fall under the exclusivity definition of your contract?  One compromise could be that the gallery receives the full commission for any customers who live in the same state as the gallery; but no commission for residents of any other state.  There is no perfect tradeoff, but give a little and get a little.

COLLECTORS
Collectors often travel nationwide and buy from galleries in various states.  What if a collector from the same state as the gallery came to your studio to buy work or bought your work from a gallery in a different state?  Don’t assume this won’t happen or that the gallery won’t find out about it.  It is impossible to itemize every possible scenario, but if you already know about specific situations, then work with the gallery to find a reasonable compromise.  For everything else, try to have a simple guiding principle or two in the contract and be ready to talk through future situations with the gallery if and when they arise.   A good working relationship requires some ongoing effort.

SEARCHING FOR SOLUTIONS
A possible path to resolving some of these issues is to ask the collector interested in your work, “How did you find out about my work?”, in a casual conversational manner. If the collector replies that they first saw your work at the gallery that represents your work, you likely owe the gallery a commission.  This may be a full commission or a partial commission (say 10% to 25%) depending on how the collector found you.   Especially if your gallery has been using images of your work in their advertising for the gallery, getting you into shows at museums or non-profit spaces, arranging articles about your work in the magazines or  arranging for your work to be purchased by a museum, then it is more likely that you owe them a commission.

On the other hand, a collector may have seen your work at several different galleries, non-profits, museums magazine, or books over several years. This  purchase may be the result of your own extensive efforts to promote your work well prior to any of the gallery’s promotion of your work. 
The merit of an “exclusive” with the gallery is that they want the work to be unique for their area. They don’t want to have the same work as the place down the street.  If the gallery is perceived as showing the best or most interesting work, and your work is shown in this establishment, it can enhance your reputation also.

Ultimately, the decision is yours, but I would recommend signing an agreement with an exclusivity clause if it is balanced by sensible limits, reasonable promotional commitments or minimum dollar volume for the artist.