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

What's the difference between Insurance Value, Wholesale Price, and Retail Price? Confusion is common, but it is important to understand the differences before shipping your work to an exhibition or elsewhere.  The consequences can be substantial -- we are possibly talking tears, frustration, embarrassment and real money.

You would not believe the stories I have heard from others and experienced myself.

Today's post provides the definition of each term. The next two posts will discuss in more depth some examples of deciding shipping insurance and confusion at exhibitions. Misunderstandings will likely cost you money and potential embarrassment.

Here are the definitions:

The RETAIL PRICE is what the gallery/store/exhibition sponsor lists as the purchase price in the catalog or on the “price list.” (We are ignoring "discounts" off retail in this post.)

The WHOLESALE PRICE is what the artist actually expects to receive as payment. This is sometimes called the “artist price”, but I'd recommend never using the term "artist price" because it may imply different things to different people.

If a gallery, exhibition sponsor or collector uses the term "artist price" I strongly recommend that you ask them to clarify what they mean. Sometimes a person uses the term "artist price" as some kind of special discounted price off retail or wholesale. Beware . . . you would not believe the long sad tales I have heard. Don't use the term "artist price".  

The INSURANCE VALUE may also be a confusing term. Most artists, galleries, and exhibition sponsors usually equate the insurance value as the wholesale price. Most insurance companies will only pay the artist the wholesale price if the work is lost, damaged or stolen during shipping or at an exhibition because this is what the artist would receive if the work was sold.

Insurance value steps up to the retail price as soon as the artwork is sold at retail. The invoice for purchase will be the documentation an insurance provider wants to see to establish the insurance value at the retail price.

This is true regardless of who sold the artwork at retail (whether an artist or gallery/store/exhibition sponsor). Insurance value will be full retail when the work is sold at retail.

The insurance value for a collector is either the purchase price or current market value in the marketplace. If the retail price of an artist's work has increased over the years, a collector may want to periodically check to be sure their insurance policy covers the current market value of the work in their collection. Some insurance companies may require an appraisal to establish insurance value. 

This is the beginning of the discussion. The next posts describe insurance value, wholesale price and retail price for shipping, and some real stories resulting from confusion with exhibitions.   These will be real stories, but I will try to keep it simple for clarity and to avoid revealing names of the innocent and the guilty.

Harriete

Conversation U from a series of 200 teacups titled "Consuming Conversation".

This is the image for a retrospective exhibition of my work that was on display from August 27, 2012 to September 28, 2012 at:

Kimura Gallery, University of Alaska Anchorage,
3211 PROVIDENCE DRIVE, ANCHORAGE, AK  99508

This post was updated on June 13, 2022, to provide current links.