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Debate: Do Galleries Deserve Perpetual Commissions for Sales to Clients They Discovered?

Yesterday, I wrote a post on splitting commissions between galleries. The article resulted in an interesting and lively conversation in the comments, a conversation that raised additional questions. One of those questions was whether a gallery deserved an ongoing commission for all future sales to clients who discover an artist’s work through the gallery.

Calvin wrote the following in a comment

What gets more complicated is when a collector buys a painting from a gallery where you pay a commission, but then that person becomes a collector and buys one or more others in the months ahead NOT through the gallery, but directly from the artist. Do you still owe a commission even though it is months (or years) after the gallery sale, and the gallery had nothing to “do with that sale”? Is this collector a “forever” commission-collector, because they were the initial client of the gallery? My answer would be no, because buying from you directly would be no different than buying from another gallery that carried my work. But I have had a gallery say that if it is “their client” and they claim that client forever and they should receive the full commission if I sold something directly. (We parted ways, and any future relationship, on that claim.)

There have always been questions (and even lawsuits) over this issue, but the internet brings it into even sharper focus as collectors are more easily able to connect directly with artists.

I’m going to try to tread carefully on this subject because I know that there are very strong opinions on both sides of the issue. Rather than coming at this from any kind of moral or emotional ground, I want to try and approach it from a purely pragmatic standpoint. I’m going to advocate an approach that I hope will be beneficial to all sides in the question: artists, galleries and collectors.

So with that in mind, I want to approach this question from a slightly different angle. Rather than asking, “Does the artist owe a commission?” and then throwing an answer and supporting arguments at it, I want to try and look at the big picture and then reverse-engineer our way back to some kind of understanding.

Motivation

First, let’s look at the artist-gallery relationship. Why do artists agree to consign their work to galleries in the first place? I know this is fairly obvious, but bear with me. I suggest that there may be a number of reasons. An artist may feel that their work will gain wider exposure by being displayed to the gallery’s clients. The artist may also feel that showing in a gallery adds credibility to their work. Ultimately, however, I propose that the main reason an artist should show with a gallery is to achieve more sales and attain greater financial stability. In essence, working with a gallery allows all of the parties involved to focus on what they do best. The artist can spend more time in the studio creating artwork because they have a gallery handling the promotion, marketing, sales and logistics involved in getting their work into the hands of collectors.

While the internet is certainly making it easier (in some ways) to connect with potential buyers, it is still extremely difficult for an artist to get enough exposure and generate enough sales to be successful without showing in galleries. [I'll pause here to say that I know there are certainly exceptions to this rule, and that the whole equation is changing rapidly because of the internet - that's a discussion for another post. For the sake of this discussion though, let's assume that you agree and want to show in galleries because you believe it will lead to greater sales and allow you to spend more time in the studio.]

If, then, the goal is to generate long-term sales success with the gallery, it makes sense for you to do everything in your power to maintain and strengthen the relationship with your gallery. The gallery should also be doing everything in their power to makes sure they are providing value to you. In a sense, when you are showing with a gallery, you have entered into a partnership with them, and partnerships only work when both parties are doing everything in their power to make each other happy. If both the artist and the gallery are working hard to make the relationship profitable, you’ve got your best shot at long-term success.

Does the Gallery Deserve an Ongoing Commission?

Now let’s come back to our original question and look at it pragmatically in light of this idea that we are trying to work together for our mutual benefit. If that is the case, the question won’t be “Does the gallery deserve an ongoing commission?” The question will instead be “What will happen to our relationship if I don’t pay a commission to the gallery for sales I make directly to a client who discovered me through the gallery?”

This is a substantially different question. The word “deserve” brings us back into the realm of morality or emotion, and I want to keep us looking at this question pragmatically.

From the gallery’s perspective, you wouldn’t be making future sales to this customer if the gallery hadn’t gone to great expense and effort to provide a physical location where that client could encounter your artwork.

Bill Inman put it this way in his response to Calvin’s original comment

If a collector finds me through a particular gallery and comes to me directly for future paintings I send the gallery their commission because they are the reason I have that collector – and I have had this happen and sent the gallery their rightfully earned commission – if I am no longer with that gallery we have no contract.

Adrienne Tybjerg weighed in by saying

I think I tend to follow a kind of real estate model. Within a year or so of a show (real estate is usually 6 months, but applies to all sales), the gallery should get their commission if the person buying saw it at their gallery. It is just like selling homes. Real Estate agents need to know that their efforts will not be abused, but at the same time they must accept that their work to sell does have a limited shelf life. If a gallery wasn’t able to sell during the showing time or within a year, the artist should not be penalized for it for life.

So who’s right? Calvin – that future direct sales shouldn’t result in a commission for the gallery? Bill – that they should, so long as there’s a contract in place? Or Adrienne – that there should be a shelf life to future commissions?

if you are asking “who’s right?” you’re asking the wrong question

And I would say that if you are asking “who’s right?” you’re asking the wrong question. I would say that it’s not a question of who’s right, it’s a question of, practically speaking, what are you trying to accomplish?

If you feel that the value of the commission from direct sales is more valuable than the future relationship with the gallery, then I would say that Calvin and Adrienne’s answers make sense. As Calvin said in his comment, the issue has lead to the termination of a relationship with a gallery. Right, wrong, black, white, none of that matters – the result matters.

You may have the best arguments in the world as to why the gallery doesn’t deserve the ongoing commission, but the gallery is simply going to say, “if you don’t value our having generated the relationship with the collector (if you valued it you would pay us for it) we aren’t going to show your work anymore. Instead we are going to work with artists who will pay us ongoing commissions.” No argument you make is going to change how they feel about this, and even though they may be wrong, their feelings are going to guide their actions and you are going to find your work on the street.

Now let’s look, practically, at what happens when an artist takes Bill Inman’s approach of paying the gallery a commission. Whether or not the gallery deserves the commission, you can bet that when they receive it, they are going to look more favorably on Bill and his work. That gallery is going to be more willing to invest in Bill’s long-term success because they are going to feel that it’s worth the investment. They are going to ask for more work, and hopefully Bill is going to have more sales in the long run. In a sense, by paying the ongoing commission, Bill is making an investment back in the gallery.

A Gallery Has to Earn Your Respect

Before you rush to the comments to start arguing the point with me, I want to say this clearly, and emphatically:

NOT EVERY GALLERY RELATIONSHIP IS WORTH MAINTAINING!!! 

In the last few paragraphs I’ve been talking about how an artist can work hard to sustain the relationship. There’s another side to it, however, and that is that the gallery better be working just as hard at the relationship. I know just as well as you do that there are galleries out there who are not pulling their weight. In this business, just as many others, there are those who believe that throwing up a sign and opening your doors for business is enough. It is not.

Frankly, there may be instances where you run into the issue of ongoing commissions and rightly feel that the relationship with the collector is more important than the relationship with the gallery. If the gallery has been lackadaisical in their marketing efforts, if they’ve been poor communicators, if they’ve been slow to pay, I suspect you’re going to look at all of that and say, “I don’t mind risking the relationship, because it wouldn’t be the end of the world if I had to find a new gallery.”

In other words, I want to turn this whole debate around and say that if a gallery is doing a great job of promoting you and is selling your work like crazy, this won’t even be an issue. You, as the artist, will be happy to direct the collector back to the gallery to make the sale because you love working with them and would rather have them handle the sale details. If you don’t feel that way, if you feel like you would be better off making the sale yourself and retaining the full commission, I suspect that the gallery hasn’t earned your respect and thus hasn’t earned the commission.

Working with the Collector

Finally, we need to briefly discuss how to handle the relationship with the collector in light of the above discussion. If, as an artist, you have a collector approach you after discovering your work in a gallery, and if you wish to pay the commission to the gallery, I suggest that you make this very clear to the collector. Let them know that any purchases they make will be handled by the gallery. Keep the gallery up to date about your contact with the collector. Get them involved in shipping and installation of the artwork. Let the gallery deal with any negotiation that occurs over the price of the piece, or at least keep them in the loop. In other words, give the gallery the opportunity to continue to earn their commission.

This openness will be appreciated by your gallery and by your collector. They will appreciate your professional approach to the business as you let them know that you value your partnership with the gallery.

Please Share Your Thoughts!

I’ve had my crack at this subject, now it’s your turn! Please leave your thoughts below in the comments. I’ve tried to approach this topic in a thoughtful and respectful way, and I’ve tried to see the issue from both sides – I hope you’ll do the same in the comments even if you disagree!

Please Share This Post!

If you feel I’ve shared something of value in this post and have added to the general dialogue about the art business, please do me a favor and share this article with the artist’s in your life and in your social media circles. I would love to get feedback and readership from as wide a cross-section of artists as possible on this important issue. Please pass the link along via email, post it to your blog or share it with your FaceBook friends, Tweet it, Plus One it on Google. Anything you can do to spread it around is tremendously appreciated!




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