Getting conned out of cash - gallery scam

Here is an interesting scam from my pal Stephen regarding galleries and markups:
I made a little discovery which I would like to share with you, which you can then pass on. I am arithmetically challenged, as are many creative people, and I always assumed galleries weren't out to screw me. I was wrong. Apart from some of the other tricks art dealers pull, there is a subtle one that can slip by unnoticed, and it always leaves the artist out of pocket. The culprit is the mark up structure used by some galleries.
An artist in the fortunate position of being able to sell a work with immediate payment, has no concern about what happens to the work thereafter. The gallery can mark it up any way it any it likes. It can add on as much as 100% or as little as 2%, or even throw it on a bonfire.  The artist has been paid, end of story.
However, those poor souls who leave work on consignment are the ones at risk. The scam works like this:
The artist wants R1000 for his piece. The gallery agrees to carry it on consignment, and puts on a mark up of - for example - 30% This means the piece will now have a ticket price of R1300.

 Some time later, the piece is sold. The gallery claims it's 30% of the ticket price of R1300.  And here is where it goes a bit wobbly. 30% of R1300 is R390. Subtract the R390 from the ticket price of R1300, and the artist is getting only R910. Not the R1000 they were originally asking for. Some galleries do this through ignorance, some do it intentionally. It's easy to be caught. For purposes of my example, I used relatively small sums of money. But if the artist wants R10 000 for a piece, and the above flawed system is used with a mark up of say 60%, you get the followng result:

 ARTISTS PRICE = R10 000

GALLERY 60% MARK UP = R6 000

TOTAL TICKET PRICE= R16 000

 Then, when the piece is sold, it is incorrectly worked back as follows:

 TOTAL TICKET PRICE = R16 000

GALLERY 60% "MARK UP" = R9600

ARTIST RECEIVES = R6400

 This is R3600 LESS THAN IS DUE TO THE ARTIST!

 The correct way to work the percentage back is as follows:

 TOTAL TICKET PRICE = R16 000

HOW GALLERY SHOULD WORK OUT 60% "MARK UP" : Ticket price R16 000 divided by 1.6

ARTIST RECEIVES = R1000

This is the same method used by SARS to calculate VAT

On top of this, the gallery might make all sorts of deals (10% off for cash to the gallery's client, for example) which my little brain simply can't even begin to work out. 
Have you experienced this? I have, and once I allowed myself to accept this kind of warped arithmetic, I couldn't escape the "bullying" tactics of the gallery.
Hope this is useful to you.

Galleries loaning art out

An artist called me the other day very distressed. Appears that she had got an email from a client who wanted to buy one of her works. She called the gallery who had the work on consignment, only to be told that the work was out on loan. It appears the gallery was hiring work out to clients who whether for financial reasons or variety did not want to actually buy the work. This is common in New Zealand for instance and should benefit all parties except for this galleries 'omission' to inform the artist (and part with some of their loan fee.) Fees for hiring to film sets in particular, can be considerable, so make sure that you inform your gallery (preferably in writing), that should they loan your work out you want to be informed as well as receive a say 50% portion of the fee.

To discount or not? That is the question.

I received this question from another artist: "I have had work in my local gallery for some years now, but sales have now dropped off badly. (The economy, I guess) Currently I have no other gallery through which to cycle the works; as the paintings are more than a year old, what are your thoughts on discounting/marking-down? I need the money, but what effect will this have on my “image”?"

We were discussing markdowns at a gallery the other day – a well known artist has cut his prices by about 50%.

My feeling is that this was not a good move and would severely upset people who have bought his work in the past and now feel cheated because it’s worth so much less.

Also would position him as an artist on his way down not up so would not inspire confidence.

But it does rely naturally on how much work you have sold into the market – if its hundreds of pieces that hundreds of people who are going to be miffed.

If only a few then not such a serious move.

Still times are tough and you need to eat. So the way we felt best is to hold ones prices BUT make it clear to the gallery that you would be prepared to negotiate if that would swing the deal.

That way the client feels they have got a good deal and your pricing/image remains intact.

This does rely heavily on the integrity of the gallery, to be honest about when they have sold work for less and when not.

Better move though would be to find a few more galleries so you can  shift works around.

So often a painting that has stood unsold, when moving to another gallery suddenly sells.

I'm asked regulalry (at least14-20 times a year) to donate art to varies charities to auction. One charity this year came up with a new suggestion: they would  take my works for auction and instead of just giving them away, as I normally do, they offered to pay me an agreed amount for each work – what they earned above that went to the charity.

This was a great way of helping others and also helping oneself, as getting something was better than nothing. Win/win all round.

Getting work into galleries

How do I get work into galleries when they only are prepared to see emailed images and not the real work?

Reason galleries don’t want to see you one to one is

a)      time involved – much faster to scan through an email and see if the work may be in the genre you are looking for and some galleries get 20+ artists a week. At 30 minutes a person that’s an extra day and a half per week to their workload.

b)      It’s easier emotionally to say no in an email than face to face. Is less personal.

It’s just like the writing world where books are rejected with only a brief synopsis having been read and not the actual book.

Tends to be that if one gallery who is respected has your work, then others are more receptive valuing the other galleries choice.

So the key is to crack the first respected gallery.

Dangling a carrot such as: ‘To date in my private capacity I have sold xx works, so I know there is a market out there for my work…’ may be tempting for a gallery to look further (provided of course that you have sold an impressive amount of work independently.

Try a different approach so your email stands out.

I got “The girl who bites her nails and the man who is always late” published in the UK with an opening line: “Have you ever bitten your nails? Procrastinated? Etc What does it say about you as a person? ” I figured that the person reading the email would have had one of these habits mentioned and being human would be interested in finding out more about themselves. It worked!

You’re creative so think up a fresh approach that will intrigue/astound them. It may not work every time but at least you’ll stand out from all the “Hi my name is Susan and I‘m an artist and here are some examples of my work… yawn.”

Failing stalking the owners, (not recommended) that’s about the best advice I can offer.

Have you got the email re getting your work published?

Received an invitation from 'Trycycle' publishing (and distributors, copywriters etc) requesting an investment on my part of R14,200 to appear in their proposed book. Doing the numbers, a 100 artists (suckers in my language) would give the 'publishers' a gross income of R1,420,000. Not bad you'll agree for putting a book together and previously a common ploy by a number of other so called 'vanity' publishers from across our shores. The eagle (vulture?) has landed now on our shores. So I replied as below to the request:

Hi Carmen,

All seems a bit vague for me to part with my R14,200.

How many artists are you intending to cover?

If say 500 and you are printing 2000 copies and giving away 2 to each artist that leaves only 1,000 for distribution - not a great investment in terms of potential buyers from my perspective.

What space will be allocated to each artist? - A page, a chapter 2 column centimetres?

What credibility will the publication have? I.e. will it be introduced by Sue Williamson for example?

If I am a seriously bad artist who paints either copies of other artist's work or "Arniston cottages no 943" can I still be accepted? In which case perhaps being associated with me will be detrimental to other better artists and therefore a waste of the R14,200.

See the publisher is also the distributor. Does this mean that you have agents countrywide as bigger distributors have?

Otherwise how will you cover the country?

What type of publicity and media do you have planned?

Publishing 'towards the end of the year' is pretty vague if you take my $$ and then nothing happens. Realise you are wanting upfront commitment but you are going to have to be a lot more definite for me so that should you renege on the specified deadline I have some sort of come back to demand my investment back.

You're going to have to do a lot more to convince me (and I suspect other artists) that is not simply a vanity publishing to enrich you (rather than enhance my career)

Regards

Ann Gadd

How much work do you need in the marketplace to make a viable income?

I've created a formula that works for me. Obviously its not cast in stone and will vary depending on the popularity of the artist, but I work with an average return factor of 10% of the consigned value of the work. So for instance if you have R100,000 rands worth of consigned work in the marketplace, I'd expect an average monthly return of R10,000. In summer that'll rise to 20-30% but decrease to maybe only 5% in the winter months. This formula excludes special exhibitions etc. Point is if you have R100,000 worth of work in galleries its unlikely that you'll be erning R50,000 a month. Seems obvious but many artists are afraid to have too much consigned work - they want everything to sell as its completed. If you want a R50,000 average monthly gross income and your work sells price to artist for say R5,000, then in order to achieve R50,000, you'll need R5000,000's worth of art in galleries which translates to 100 paintings. Try it and see if it works for you.

Rejection - the artists' lament

Receieved an email from an artist who was angry because of the numerous rejections she had received from galleries. The frustration caused her to sympathise with van Gogh's ear cutting escapade. Having experienced rejection first hand both through art and writing, rejection has become a familiar friend and one that pushes me out of my comfort zone to explore new directions. My reply to the artist: (abbreviated)

I understand your frustration and anger.

The art and the writing worlds are hard nuts to crack.

Commercial galleries, as mentioned in the book, are for the most part, business who sell art rather than art lovers who have a business.If they know the work has been proven to sell/be of commercial value, then they want to cash in on that success.There's less risk with known artists.

If the business has artists on board who are working for them, unless the art is really something completely new and exciting, the hassle of taking on another artist is not attractive. (Here I play Devil's advocate.) So to be accepted takes the 'Wow' factor.

The galleries are not the enemy. They are businesses. It's simply a matter of can this sell or not?

Sometimes they naturally do get it wrong, but most of them are still in business because they know what their market wants.

(It's no different in the writing world where there are thousands of books written about let's say yoga. To get a book published now on yoga means that your approach/content needs to be different from all the other yoga books. Even if your book is well written and researched, why would they want a repeat of what has already been said?

So, no chopping off of ears. Rather listen to the feedback galleries give you when you do manage to get through the door. And keep on exploring new directions with your art. Dig deep within yourself until you find the unique expression that is you.