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