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Ask a Gallery Owner: Should I Negotiate with Customers?

by Jason Horejs on 07/11/2012 · 3 comments

After a recent online broadcast, I received the following email from an artist regarding selling art at a discount.

I do have a question about multiple piece discounts.  In addition to our base offerings of alpaca garments and farm events highlighted on our website, we create wearable art pieces (scarves, shawls, etc.) and wall hangings made by hand-felting alpaca fiber from our herd with silk, merino and other fibers/embellishments.  These items aren’t on our website as many of them are custom designs.  Prices range from $125 to $750.
We often get folks that ask for discounts if they purchase (or commission) more than one piece.  We understand the request and certainly what to “reward” loyal customers but at the same time we believe our prices start extremely fair.  As a result, we have gone back and forth as to whether or not discounts are appropriate - particularly at what point and how deep.
Do you have any thoughts you could share in this area (at what point to offer discounts and how deep to go) or any suggestions on a graceful way to say “no, I’m sorry, but we don’t”?
My Response:
This is a great question. I have found that for many of our buyers, even though they don’t need the discount to afford the work, they feel the negotiation is part of the process. You might consider bumping your prices up to allow for a little room to negotiate if you feel your margins are too tight. I feel that my ability to give a consideration (typically between 10%-20%) is the single best tool I have to increase sales volume. I have always been of the philosophy that I would rather have 80% of something than 100% of nothing.
You can try the “we’ve worked to keep our prices very reasonable so that we can keep the sales process simple for you. With this price, you can be assured that you are paying exactly the same as everyone else” etc. But you are still going to lose some sales over time, and those lost sales really hit your profit margin unless you aren’t able to keep up with demand already (in which case it’s time to raise prices anyway).
Leave your thoughts on pricing and discounting in the comments below.
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About 

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 ARTsala. 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.

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{ 3 comments… read them below or add one }

Robin Lee Makowski July 11, 2012 at 2:11 pm

I totally agree with Jason about the bumping up of the price so you can come down. You can tell your commission client that your “normal” price for piece A and piece B is $X (15-20% higher than normal) but in consideration of your order, we’ll discount to $X (around the normal price.) In our New Mexico gallery, we started by offering to pay the tax and backed the tax out. Then we’d go to 10%. I had my consigned artists agree to a 10% discount without me having to call them first. Anything after that came out of the gallery’s commission. By raising your price to create some wiggle-room, you will get clients who will pay that higher price without question, and will make up for the ones who want the “deal.” But I never offer a discount unless the customer shows me his back before I see his wallet.

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Rani Garner July 17, 2012 at 3:14 am

I just had a call from a gallery who had a buyer asking for a discount. She ended up buying five large paintings because we offered her 10% off. She loved the work but wouldn’t have bought so many without the discount. As the gallery said, it made her feel good about her purchase because she could focus on the amount saved rather than the over $10K spent! I’m not a fan of inflating the prices so they can be discounted later. I’ve had galleries do that and then the customer saw the price discrepancy on my or another gallery’s website afterwards.

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Parson Allens October 25, 2012 at 10:35 pm

NO, don’t negotiate with any customer, get a personal agent to do ALL your sales.

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