Running a Gallery - Between Business and Art

Collectors TipLor Dethal

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There are numerous reasons as to why you might want to start running a gallery. To those in love with art in all of its forms, running a gallery might be closer to making art itself. Like painting a colorful picture, each of your actions and directions the gallery takes speaks its own story, filling up the empty space of the canvas and shaping it uniquely. Showing determination, boldness through display and consistency in quality will build your reputation as an “artist”, or, in this case, a gallery owner. However, before your life’s greatest work is complete, you’ll need to buy the canvas, the brushes and the paint. In the next few paragraphs we’ll go over what it takes to stay afloat in this lucrative, yet expensive business, and what it costs to run an art gallery in today’s environment.

 

lighting for artwork

Running a gallery might be closer to making art itself

 

Stone Cold Facts

Whether your business is blooming or you’re struggling for breath, there are some fundamental costs that you simply cannot avoid, and more often than not they’ll hit your budget hard. Not only are they mandatory, but over the past few years the price of these essential expenditures has been constantly increasing, making the art gallery business a riskier investment regardless of the boom the market for contemporary art has had in the past few years.
 
According to a survey of several New York art galleries, the biggest “boogie man” in any art dealer’s wallet is the price of rent. When asked about money, most gallery owners talk about the huge share that rent has in their investment. Although prices vary, some of them reported that it can take up to 33% of their monthly budget! And if you’re thinking it might not be a lot in theory, consider that these gallery’s monthly costs can range from $80,000 to $100,000 dollars. Many art dealers are choosing to relocate their galleries out of the flood zones, thus lowering both rent and storage fees. If we take Chelsea for example, with its average rent cost of $100-$150 per square foot, and Lower East Side with $80-$100, you can see how the cost differential can be quite significant.
 
Another huge aspect and a “necessary evil” when it comes to gallery expenses are art fairs. Based on Clare McAndrew’s “The Role of Art & Antique Dealers: An Added Value,” an average gallery makes up to 28% of its total sales outside its home market. No one can deny how important art fairs are for the gallery’s reputation and its financial survival, and though you’re likely to come out on top, expenses to cover all the necessities can be substantial. The cost of flights, additional shipping, accommodations, booths and other associated costs all make up the price of fairs, and when you’re on the giving side of the cash flow, it piles up into a (not-so)elegant sum.

 

running a gallery

Art fairs, the “necessary evil” of gallery’s expenses (Frieze London Art Fair 2014)

 

Balancing the Scales

So, you’ve bought your canvas, you’ve got your paints and you’re holding your brushes, but for this to be pretty picture you’ll have to juggle a few more business concepts. Yes, with so many bills to cover and so many risks to take, most of us would call this course “scary” at the least, but this is where the “lucrative” part of this field steps in. We’ve mentioned all these bills, all these expenses, yet contemporary art market makes tens of billions of dollars in profit each year. How?
 
The truth is, market works in a much different way when it comes to art than it does for most other industries. Galleries have the leading role in not only setting the prices of art, but practically manipulating them. The very nature of art is such that constructing efficient, comparable prices on a market of any size is impossible, leaving the whole art industry to follow the concepts of what’s more “beautiful” and more “worthy” based on the approval of a handful of galleries, collectors and museums. The simple fact that perception and value are subjective, and one painting can be seen as good by one person, yet horrifying by the next, makes this whole “value game” possible; and given the intrinsic value of a painting is paint and canvas, there’s a good chance you’ll be able to tiptoe your way past the bills, and earn some extra dollars for yourself.
 
That being said, its not very efficient nor fashionable to skyrocket the prices of paintings in a gallery just to be able to cover the bills. In other industries, the price of goods is directly connected to the price of commodities needed for production. But a painting of an emerging artist cannot be priced like the one of a successful mid-aged artist simply because the gallery’s rent has gone up. Exquisite art collectors are well educated consumers, and forcing a price on a young artist’s work will do the gallery more harm than good.

 

scales

Balancing between business and art makes for a good gallery

 

The True Value of Your Business

Ultimately, what it really costs to run a gallery depends on your goals, ideas, resourcefulness and own sense of value. If you’re a true art lover, being able to represent art as you see it over-weighs being a few digits behind once all the calculations and number crunching is done. Whether you run a gallery because you appreciate art or simply for its monetary aspect, you are bound to clash with the unpredictable environments of both worlds.

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