5 Reasons Why It's A Bad Business Decision to Work With An Art Representative

Start Serving A Mission Greater Than Yourself

(Transcription)

Ann Rea: (00:01)
Hello everyone. This is Anne Rea, coming to you live from San Francisco. I am an artist. I’m also the mentor and the creator of the Making Art Making Money program. And today I have a fun topic. It’s the five reasons why working with an art representative is a terrible, I mean, awful business decision. Now some of you might even say, “Well, business decision. I’m not in business.” Oh hell yes you are. If you’re selling your art, you’re in business. Don’t believe me? Don’t you have to file a profit and loss statement for your taxes? Don’t you have to claim your sales and your expenses and your costs? Don’t you have to charge sales tax? Yes, you’re in business. There are no careers for fine artists because there are no jobs for fine artists. So you’re never going to have a successful art career ever, ever. I don’t care what they told you in art school.

Ann Rea: (00:59)
What, whoever told you that, they were lying, but what you can have, possibly, is a successful fine art business. But let’s back up. Let’s take a look at the reasons why it is five reasons why it is a super, super bad decision to work with an art representative. So I took some notes. I want to make sure that I hit each one of these points. Well, first of all, they’re taking 30 to 60% in sales commission. That’s a lot, given the fact that they don’t even own the inventory. So in retail, the traditional percentage is 50/50. It’s called Keystone pricing. So wholesale price is half or 50% of retail pricing. Well, that would be — that’s fair enough, because the retailer has purchased that inventory. However, your art representative, gallerist, whatever you’re calling them, they have no investment. They haven’t paid you a dime.

Ann Rea: (02:07)
They’ve got no vested interest in your art. And essentially they are getting unlimited access to tax free inventory. So that’s a really good business model for them, but it’s a really crap model for fine artists. So that’s number one. That’s 30 to 60% sales commission on an inventory that they don’t even own. I don’t think so. That’s not fair. Let’s take a look at the second reason why it’s a horrible decision to work with an art representative. So many of them are discounting your art. Now, why are they doing that? Well, first of all, they don’t have any, they don’t have any interest in them. They don’t own the inventory. They’re not going to lose if they discount the art to try to facilitate the sale, but guess who will? You will. And you’re going to lose big time in two ways. Number one, as soon as your art is discounted

Ann Rea: (03:13)
it signals the market that your prices have no integrity. And how does that reflect upon you? Well, it also looks like you don’t have any integrity and you don’t have any confidence in the value of your art. If you don’t have any confidence in the value of your art, you can barely expect collectors to have confidence in the value of your art. So discounting damages your reputation and devalues your art immediately. So it may seem like an inconsequential transaction, but it has some serious repercussions. So, the other reason why it’s a bad decision it’s because so many art representatives, galleries want to discount your art. Now the last but not — actually the third reason is that if you’re working with an art representative, they typically will not allow you to have access to your own collectors’ contact information. Why is that a problem?

Ann Rea: (04:14)
Can you imagine any business being able to operate without knowing who the hell their customers are? No, they would go out of business immediately. Here’s the other thing. They don’t own the inventory. So they are not their customers. They’re your customers. They’re your collectors. And it is not only highly unethical that they don’t give you your collectors’ contact information. It’s often illegal. So, uh, but I’ll tell you what, if you ask them, what do they do? They drop you like a hot potato, because they’ve got a long line of other artists willing to sign up for these onerous terms. So that’s another big problem. You don’t have your collectors’ contact information. So why does it matter? Well, I’ll tell you why it matters. Over 80% of all sales come by way of referrals. So what does that– what do I mean by that? Well, if you don’t know your collectors, you can’t cultivate relationships with them.

Ann Rea: (05:20)
And if you can’t cultivate relationships with them, then you lose out on the opportunity to get introductions to other collectors who are just like them because your existing collectors are the best source of referrals to more collectors. So it’s not just a loss of 80% more sales on average, but it’s 80% more sales where you could have kept a 100% of the money. You wouldn’t have to pay any commissions. Just sit with that math for a second. Sit with the math. It doesn’t lie. This is the crux of why artists are struggling because of these unfair terms and the loss of this exponential opportunity to increase sales by way of referrals. The fact is this, real relationships equals revenue. And if you can’t have relationships with your collectors, you can just kiss goodbye to all that revenue. That’s why that’s another reason why it is a very bad business decision to work with an art representative.

Ann Rea: (06:32)
So, um, the fifth reason is simply this many, many, many, many, many art galleries or representatives insist on exclusivity agreements. What does that mean? It means that they will not allow you. We will not allow you to sell your art with another representative within a certain geographic area, which of course they define, which is ridiculous. So they limit your — and a lot of them, I mean, I remember when I worked with Solomon Dubnick Gallery in Sacramento, actually, Wayne Thiebaud referred me to them. They didn’t want me selling my own art. I mean, they weren’t selling near enough of my art to even justify the relationship, but they still insisted that I only work with Solomon Dubnick Gallery and that I didn’t sell the art myself. So they didn’t want to see me. Uh, that was okay. I was allowed, I was allowed to have my own website, but I wasn’t allowed to put my prices on my website, which was ridiculous.

Ann Rea: (07:44)
Now I didn’t know another way back then. So I have to admit it. I agreed to these awful terms because why? Because I was in a prestigious gallery. Well, I have since learned that prestige, the word prestige comes from the root word, meaning a French word. Meaning deceit makes complete sense. Doesn’t it? So those are five reasons why you don’t, it’s a really bad, bad, bad, bad, bad, bad decision to work with an art representative. Now, why do artists do it? Well because they’re living under what I call the tyranny of hope. They don’t have another option. They don’t know that there’s another way. They don’t have a roadmap. And on July 24th, at Saturday, 2:00 PM Pacific standard time. And Joie, if you’re listening, please put the link into the application page or we’ll put it in there later. You can apply to join a brand new Art and Money Masterclass.

Ann Rea: (08:52)
And I’m going to teach you more about the strategies and the principles that I teach and that artists are using. And I’m also going to give you details about the Making Art Making Money program itself. So I invite you to apply and I encourage you to apply. If you apply and you’re enrolled by the end of this month, you’ll have the opportunity to come to a new internal class that I’ll be teaching to my students only called “The Seven Steps to Selling your Art to Afluent Collectors With Confidence And Without Being Pushy.” So hopefully you’ll take some of these five reasons into account, no pun intended, and really examine the limitations of your relationship with your art representative, who, whether you realize it or not, they are standing in the way of your success more often than not because you can’t access your collectors’ contact information.

Ann Rea: (09:54)
You can’t develop those relationships. There is no business — there’s no reasonable business owner who would ever agree to those terms. They’re nuts. And so take a look at that, do the math. I’ll give you a little exercise before I leave. And it’s really important because the math doesn’t lie. What I would like you to do is take a look at all of the art you’ve sold through representatives and how much money you’ve paid them in sales commissions. Then what I want you to do is take a look at how much art you’ve sold in a given year and tack on 80% more where you could have kept a 100% of the money, right? That’s how much money or opportunity on average you lost out on because you were working with an art representative and same mistake that I made. So please don’t feel bad about it.

Ann Rea: (10:49)
Forgive yourself. There is a different way of going about things and look at the potential, take those same numbers and say, “Wow! What could it look like for me, if I sold, let’s say 80, let’s say 50% more art. I also kept a 100% of the money. What my life looked like? How would I feel? How would I show up in the world as an artist? Would it, would it increase my confidence?” Probably. Right. So here’s a good news, everyone. Since the pandemic, the affluent have started to buy more art because they are investing in real estate and they’re remodeling. So there’s more opportunity there than ever before. So I invite you to apply to enroll in the brand new Art and Money Masterclass happening Saturday, July 24th at 2:00 PM Pacific standard time. We’ll put the link in the chat so that you can do that.

Ann Rea: (11:46)
And what I’d love to know, and I’d love for you to comment. What has been your experience with art representatives? Have they treated you fairly? Do you feel like they are selling enough of your art? Are they paying you on time? I mean, look, if you’re happy, keep doing it, but if you want to make art that has even more meaning and really know your niche and know your value and know your purpose, then you got to fire your representative and you got to find your niche. See you Saturday, July 24th at 2:00 PM Pacific standard time. Please apply now.

Ann Rea

Ann Rea, Fine Artist & Mentor

Ann Rea is a San Francisco-based fine artist. She created Making Art Making Money®, the leading and most reputable business program for fine artists since 2005. Rea’s art and business savvy have been featured on ABC, HGTV, Creative Live, The Good Life Project, in the book Career Renegade by Jonathan Fields, the San Francisco Chronicle, Art Business News, Fortune, and Inc. Magazines. Rea’s artistic talent was commended by her mentor, art icon Wayne Thiebaud.

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