Consignment Forms - Are They Really Necessary?

Art Business: Yawn, right? Still, I think it's important enough to write about. Of all the artists that I know, the successful ones (read: make their main income from art) are totally involved in the business side of their art, not just the creation of it. The romantic stereotype of the messy artist who just creates in a cluttered studio is really the image of an artist who won't survive.

Example of a Gallery Consignment Form

Example of a Gallery Consignment Form

It’s hard to stand up for yourself as an artist, especially if you’re just starting out, but it’s a good habit to get into. It can be tempting to just hope for the best in terms of a gallery relationship, but that’s rather naive. Nobody is going to look out for your interests except you.

An Artist-Gallery relationship takes work, a lot like a marriage. The first few months may even be bright and sunny like a honeymoon. If you talk to someone from either party though, you’re likely to hear some disgruntled experiences. Why nobody would want to try and improve this experience through more open and transparent communication is beyond me. (I suspect it’s because this approach takes work from both sides. Easier to do nothing and think positive, right?) I spend a lot of time asking questions and getting to know them before making a commitment. Artists need to make it clear what they want, listen to what the gallery wants, and then work with the gallery to make that happen - don't just sit back and wait for the checks to roll in. It doesn't work that way.

I've worked behind the scenes in a handful of galleries previously and have helped curate and organize exhibitions, so I know how difficult artists can be: missing deadlines, unresponsiveness, etc. How would a gallery react if they spent money advertising and curating a show and the artist then sold the advertised work on the side before the opening? An agreement discussed beforehand could state that would be bad form for an artist to do - sounds obvious, but it’s been done.

Galleries sign contracts for properties, loans, advertising in magazines. Why wouldn’t they sign one with an artist they’re doing business with? Perhaps because it lessens their liability. What happens if an artwork is lost during shipping? It’s not uncommon. The artist loses inventory (which equals real dollars), but that consignment doesn’t monetarily affect the gallery unless they agreed to bear some responsibility. What other businesses function without contracts?

Plenty of homes are purchased without major problems occurring during the process. Would that convince you that an escrow agreement was unnecessary and to just trust all the parties involved? People seem to think of consignment forms as a sign of mistrust. A contract is not a pessimistic statement or expectation that things will turn out poorly, it’s protecting you from the not uncommon reality that things can happen.

My five main reasons for using consignment forms:

1. If you’re a self-employed artist, nobody is looking out for you. You need to look out for yourself and protect your work. It’s hard to stand up for yourself sometimes, but nobody else is going to do it for you.

2. It protects both parties involved. If you were consigning any other physical object for sale, such as power tools or furniture, wouldn't you want to have something signed as proof that the agreement actually exists? Fedex and UPS have you sign to verify receipt of a package. Otherwise, how do you prove that the exchange ever occurred in the first place? Art is always talked about as a commodity, but so much is often agreed to by handshake alone. The gallery could have purchased it separately from a third party. A contract is as good as the paper it's signed on, meaning, no contract, no good. Get it in writing. Plan for the worst case scenario, and create a consignment agreement that will prevent you from ever getting there.

I’ve heard horror stories from other artists: galleries that closed and consigned artwork was confiscated as payment for debts by the gallery’s creditors (consigned = still the property of the artist, the gallery does not own it); galleries that didn't pay what they agreed to pay when selling (discounts given); galleries that denied work was ever even given to them or somehow lost paintings. Galleries selling prints without the artist’s permission (see #10 below about reproduction rights - a gallery cannot unilaterally do this). I've also heard stories from the gallery side of things, too, so why wouldn't both sides draw up a fair agreement that protects everyone?

3. It should keep everyone involved happy. Nothing is guaranteed, but if both the artist and gallery are all on the same page at the outset and have the same understanding of the agreement, misunderstandings should have much less chance of occurring.

4. The art world is in reality a small community. If an artist sets certain precedents in a gallery relationship, good or bad, that affects other artists who come afterwards. If an artist accepts lousy commission rates just for the sake of a wall to hang on and a little ego, the gallery will continue to use those lousy rates because they can, and that artist has now made it harder for every artist who comes after him to get a decent agreement. If one artist walks away from what they perceive as a bad deal, but the next ten artists agree to it, nothing will change. But if one artist walks away from a bad deal, and subsequent artists do too, that sends a message to the gallery that maybe they need to change something to get the good artists in the door. Artists need to stick to their guns, or be prepared to walk. Artists should realize that each of their business decisions, even on a small scale, affects not only their career, but other artists and the art world at large.

5. You know where your work is, and how long its been there. Obviously art is not the same as a loaf of bread at the grocery store that needs to be replaced after a few days, but it's a good idea to refresh your work in a gallery from time to time. Collectors like to see something new and it's a good way to stay involved with your gallery. If you don't have some sort of record of these things, and have multiple paintings out at multiple galleries, it's very easy to forget how much something was priced at, or what size it was, or how it was framed. Documentation is your friend.

It creates a record of your work, your exhibition history, your collectors. This is provenance, which can help determine authenticity later down the road.

A few things to keep in mind, and to ask for when negotiating with a gallery (your email correspondence is also documentation):

6. 50/50 is not a good deal. Artists, you should be insisting on at least 60/40. I can't say this enough, and I can already hear the galleries complaining, but hear me out. Artists have rent/mortgage, utility payments, car payments, grocery bills, and more, just like gallery owners, as well as the upfront costs of paying for all the materials to create something (paint, canvas, stretchers, etc), the time spent to create it (often many more hours than you know), plus framing the artwork and shipping it to the gallery. What about airfare to get the artist to the opening reception? I know galleries have other expenses. However, galleries tend to represent multiple artists, even at times upwards of 40+, while artists tend to be represented by, let's say, 4-5 galleries. So, even if a lot of the artists represented in a gallery aren't selling, chances are good that a few are, and the gallery will be earning income from that. Even with 4-5 galleries, there is still a good chance that an artist will go for long periods of time without selling anything.

If galleries would purchase some of the work outright from an artist like they used to, it would be an immense help. Years ago when an artist had an exhibition, a gallery might purchase 1/3 of the new work. What about even one or two pieces? Not only would this give the artist the ability to continue to survive and create, but now the gallery is really invested in selling the work, because they own it, rather than having no horse in the race as is the case with consignments.

7. Frames should be dealt with separately in consignments, and not subject to commissions. Why is the artist expected to eat this cost? If an artist gave an unframed work to a gallery and the gallery had to go to the expense of framing it, the gallery would want to be reimbursed for that expense, and rightly so. Well, so should artists. Here's how I break it down (see the image above):

Step 1: Gallery Retail Price (the price a buyer pays) - Frame Cost = Adjusted Retail.

Step 2: Divide the Adjusted Retail into the previously agreed commission rates. A 60/40 agreement would give the artist 60%.

Step 3: Add Frame Cost to whichever party paid for it. Boom. If the gallery supplied the frame, the Frame Cost is added to their commission, but since artists usually take care of this expense, it would be added to their commission. I don't know why galleries are so averse to this. Presentation is important and artists need to recoup their Frame Cost if they're going to continue to present their work well.

(One suggestion I've heard from galleries, since they usually insist on a 50/50 split, is to double the frame cost in the Gallery Retail Price. This way, when the commissions are split down the middle, the artist DOES get reimbursed for the frame, but this unnecessarily inflates the price for the buyer and also pays the gallery more money for a frame they didn't supply.)

Now, a gallery might be paying for a few other things like magazine ads or exhibition brochures - these are definitely expensive, and the artist probably never sees the cost of any of this. This then is a negotiating point at the outset of the relationship - who pays for what? Does the artist pay for frames and shipping to the gallery, while the gallery pays for x number of ads per yer? Lay it all out on the table and agree to it beforehand.

8. When a gallery sells a painting (at least in CA), they are required by law to give the artist the name and address of the collector. It's a state law*, and if the artist requests it and the gallery refuses, it's a misdemeanor. If galleries are so concerned that their artists are going to try to sell directly to the collector, maybe the gallery should reconsider who they represent. Artists, you are entitled to this info, but you will probably permanently break a gallery’s trust if you go around them to sell directly to their collectors. Be a good partner and respect the relationship. If a gallery is doing well for an artist, the artist will have no reason to do anything other than paint, which is what we want to be doing anyways.

9. You can always say No. Artists - if you're not getting what you're asking for, or feel like you're compromising just for 'exposure,' you can ALWAYS say No and walk away. Maybe it would be better NOT to sign on with a gallery; instead regroup and work on strengthening your art. Don't be hungry for 'representation' or 'exposure.' Make your art your best ambassador.

10. ALL reproduction and copyrights remain exclusively with the Artist. Your forms should clearly state that it is only the physical artwork being sold, and copyright as well as any and all rights for reproduction in any form remain with the artist. Think of them as two separate things: a physical artwork that hangs on a wall, and an image that can be reproduced (prints, postcards, etc.). The latter rights to reproduction always remain with the artist unless they are explicitly sold as such. Galleries (or anyone else) cannot make postcards, posters, or anything else using an artist’s image without their permission, but I know instances of this happening. (If anyone in the Illustration or freelance world wants to weigh in on this with more detail that would be awesome.)

So you start to see why artists might seem so crazy - we have to manage not only the creative side, protecting the playful child-like approach, anticipating and responding to new experiences in order to create, but we have to balance it with the responsible, grown-up side of doing business in the art world. Add to that a preponderance of galleries that jump at the first mention of 'consignment forms," and it can be precarious at times to maintain those two worlds and yet not have them influence each other too much. Like I said at the outset, I'm hoping this improves Artist-Gallery relationships, puts more out on the table and up for discussion. If you want something, ask for it. Also, listen for (or ask if you don't hear it) what the other party wants or needs. Stay involved. If it doesn't sound like it will work, there are plenty of galleries out there.

OK, now I'd love to hear from you. Are you an artist? What are you experiences? How about galleries? Do you have something to add that I might have missed? Let's start a discussion about this and make it the norm for every artwork to be accompanied by a consignment form.

*Want the nitty-gritty? Here's the 1909 CA law requiring Consignees (Galleries) to give the name AND address of the Purchaser (Collector) to the Consignors (Artist) upon request.

Required Information

Stats. 1909,c. 706.p. 1081, Section 1.

It is hereby made the duty of every commission merchant, broker, factor or consignee, to whom any property is consigned or entrusted for sale, to make, when accounting thereof or subsequently, upon the written demand of his principal or consignor, a true written statement setting forth the names and address of the person or persons to whom a sale of the said property, or any portion thereof, was made. The quantity so sold to each purchaser, and the respective price obtained therefor; provided however, that unless separate written demand shall be made as to each consignment or shipment regarding which said statement is desired, prior to sale, it shall be sufficient to set forth in said statement only so many said matters above enumerated as said commission merchant, broker, factor, of consignee may be able to obtain from the books of account kept by him: and said statement shall not be required in case of cash sale where the amount of the transaction is less than fifty dollars. Any person violating the provisions of this section is guilty of a misdemeanor.  (Added by stats. 1909, c 706, p. 1081, Section, 1.)