What’s the Truth About Gallery Consignment?

by Rhianne Newlahnd.
(Sedona Arizona, USA)

Mermaid treasures- sterling silver, mother of pearl, peridot, amethyst, swarovski crystal,

Mermaid treasures- sterling silver, mother of pearl, peridot, amethyst, swarovski crystal,

I recently saw an article here about consignment. I was asked to show my jewelry in a gallery.

When I went to talk about the deal, I was told that they would triple the price of my goods , which means a $300 piece to me would sell for $900 dollars there and they would take $600!

Earth walk- Garnet, fossil, fine threads, sterling silver, bali silver, onyx,swarovski crystal

Earth walk- Garnet, fossil, fine threads, sterling silver, bali silver, onyx,swarovski crystal

I felt crushed as these are friends of mine. They say that is costs a lot to run that business. Also, he inferred that he would not like to see me selling for less than his prices on my own site.

Amethyst Dreams

Amethyst Dreams

So, what is that about? Some friend says that it is worth getting into a gallery because it gives you cache’ or a better reputation even if you end up not making much.

I get frustrated about all this, as I really want to start making a fair income with all that I do.

Mayan Travels sterling silver, bali silver, corral, fine threads..

Mayan Travels sterling silver, bali silver, corral, fine threads..

Rhianne Newlahnd
NewLahnd Studios

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  • Drake says:

    I’ve not been a gallery, nor any consignment shops, but I’ve been starting the process of researching the whole process, in ancipation of getting into some of them. So take what I say with a large grain of salt, and someone with more experience will be a better source of info.

    From what you are describing, I would run, not walk, the other direction. From what I’ve seen, galleries and shops tend to run one of three ways.

    Type A) You pay a monthly “rent” for space in the shop. Sometimes you are responsible for the setup and display, other times the shop has that responsibility. Some shops require you work there a few hours a month, some do not. You set the prices of your pieces. The shop is often not accountable for losses due to theft. The shop collects the payment and any applicable sales tax, then sends you a periodic check for the sales minus the sales tax and their commission. These types of shops typically take the smallest portion of your sales, because they are receiving a monthly payment regardless of sales, plus they bear very little risk in terms of items not selling.

    Type B) The typical consignment shop. Somewhat similar to Type A, but there is no monthly fee. The shop is typically responsible for all display and security of your pieces while they are in the shop. If something is stolen, they are responsible for paying you for the lost work. The Artist sets the price of all of the pieces of art. It is not uncommon for part of the contract to include a clause that prohibits you from selling your work elsewhere within a specific distance from the shop/gallery location. This may or may not include art shows that happen to be local. The shop collects payment and sales taxes on the pieces sold, then sends you a check periodically for the sales minus their commission. The share that the store keeps is generally considerably larger than the rent-based shops, typcially ranging 30-50% of the sales price. Because artist still shoulders the burden of risk on a piece not selling, the artist should be keeping more of the money than they would at a retail location. Well-known artists with desirable product can often negotiate a 70/30 split with the shop. 60/40 is more typical. If you really want to get into a particular shop you can go down to 50/50, but it is not recommended because they are basically getting wholesale pricing for commission goods. NEVER accept a commission rate that would allow the shop to give you less than the wholesale price of the piece. Your wholesale price is an absolute bottom floor of pricing, and should only be used when you are assuming none of the financial risk involved in the sale of the art.

    Type C) Retail Store. The store purchases your work at Wholesale price (typically 50% of your retail cost, but that depends on your individual pricing system). The store now owns your pieces and can do with them as they like. They incur all of the risk associated with the sale of the work. They also choose what price they wish to sell the piece for. An honest retail shop that believes you are pricing your work fairly should double the wholesale price to set their retail price. I’ve never heard of a retail shop prohibiting the artist from also selling work elsewhere, but I suppose it’s possible.

    It sounds to me like this gallery wants to basically get all the benefits of the different types of systems while putting the risk on you. They want to set the sale price of a piece that you created and that you still own. They want to set the commission price higher than I would accept at ANY of the three types of shops. And they want to dictate how you sell your pieces elsewhere. They can negotiate for one, maybe two, but certainly not all three.

    One thing I will say is that it IS considered bad form to sell the same/similar piece in different locations for different prices. It’s less important with retail shops, because they set their prices not you, but since your wholesale price is the same regardless of the type of shop you are selling in, these shops should be selling at roughly the same you would be selling the pieces for elsewhere (unless they are trying to bilk their customers, or you have severely underpriced your work, either of which is entirely possible).

  • Great info from Drake above – thank you for taking the time to share your research, Drake!

    And Rhianne – if you haven’t already seen my Jewelry Consignment Checklist and the rest of the JMJ section about Consigning and Wholesaling Jewelry – I encourage you to read those posts before you choose a shop / gallery.

    Also, as Drake mentioned, different shops / galleries have different ways of working with artists – so if one gallery isn’t a good fit for you, you can politely decline and research some other galleries.

    And one lesson I learned about selling jewelry through shops & galleries – don’t ignore how you feel when it comes to the places you sell your jewelry. If something doesn’t feel right for you, it pays to listen to your inner knowing. Your work is artistic and unique, and there are plenty of other places to sell your jewelry.

    Good luck, Rhianne, and let us know how it turns out for you! 🙂

  • This is great information I will use. Thanks for sharing your experience, knowledge and expertise.

  • Bobbie Rafferty says:

    Whether or not you decide to go with this particular gallery, this experience may be a cue for you to take a look at the prices you are charging, and consider whether you are underpricing yourself. I always price my pieces at a level that would allow for that 60/40 or 50/50 gallery split, even when I sell them myself at art shows. That way, I’m not undercutting my gallery representation, and I’m reflecting the true market value of my work. A gallery owner even said to me once that she got very frustrated when artists (jewelry artists particularly) undervaluing and underpricing their work when they bring it in for her to review.

    So while this gallery may not be a great fit for your work, they may have done you a favor by implying that you should reconsider your pricing to more accurately reflect your quality and artistry!

  • What good is a “better reputation” when you’re broke? They’re pricing your jewelry for you at a price that makes you uncomfortable.

    Rena is right on. Go with your gut. I went to a consignment shop, and something just didn’t feel right. I felt uncomfortable but couldn’t pin down the source. The owners were brash and refused to accept responsibility for theft, assuring me it didn’t happen. When I pressed them on this point (they can’t be everywhere), the wife ended up calling me a bitch. You can’t get much more unprofessional than that.

    I’m with Drake on this one: run away.

  • Barbara says:

    I agree with the above comment to run, not walk, in the opposite direction. But at the same time, sorta kinda, you might want to take a look at your own pricing. Maybe it is a little too low — in that particular marketplace.

    I’ve had good success with paying stores a 30% commission, which is the going rate in this area. Yes, it would be 40% to 50% in a larger city. I take the price I need for my work and add 50% always now to make the final selling price in every venue. The reason behind keeping your prices consistent is so you’re NOT cannibalising sales from a store that’s open 6 or 7 days a week, paying for advertising, staffing, etc. Doing this also gives me wiggle room for people who buy several items at a time or who are steady customers of mine and I want to give them a little discount (usually 10%-20%) in appreciation. And I do understand that cannibalising sales is the point many stores have made in asking me to not sell within the same town or area. How I get around that is when I’m represented in a local store, I design an exclusive line with their particular price point in mind just for them — and carry on selling other lines/price ranges at the market and in other stores without a problem. They love the idea of an exclusive line just for them and it’s a tremendous selling point.

    Another thing to consider is how to deal with a private custom design commission that originates through that store/gallery. If someone comes to me at the market or phones me up having seen something in that store and asking to have something custom made, I ALWAYS offer to run the sale through the store. Why? They did the work of advertising and representing me, therefore, they deserve to be reimbursed for their work. Most of the time, they refuse, but it impresses them to no end that I made the offer, and the benefit to me is it makes them a little more inclined to give my work premium showcase space in the store and/or they push my work a little bit more to customers.

    Barbara

  • Joey Barnes says:

    Great info that has been shared already, but I would add two things: 1) where on the store and how are they displaying your creations? Of they are in a corner or not out at all (yes, that happens), then your consignment won’t make any money. Make sure this is discussed up front. 2) how and when will they pay you? Make sure there is a good accounting method and prompt payment on a regular basis. And of they don’t, pull your stuff. Make sure this is in your signed contract with them. And speaking if a contract, have legal counsel review it. Whoever writes it will slant it to their advantage. Visit regularly so they know you are coming in to check your display and as a gentle reminder that you are a partner.

  • Rae says:

    Well, lots of good information has been shared here…especially Joey’s comments about checking up on your work actually being displayed and places well….been there and it stinks!

    I just want to say that your work is fabulous and shows some very creative thought in combining materials. It appears to take a lot of time and creativity plus contains some expensive beads. I would rethink my pricing in view of what they say about pricing. Consider labor time…even minimum wage unskilled labor is getting a boost…and overhead and profit when setting the wholesale price. If you feel your area doesn’t support higher prices for you, perhaps try a bigger city for outlets.

  • Tavette says:

    Drake has certainly done his homework – thanks so much for all that info.

    300% – that’s absolutely outrageous. Many years ago friends of ours opened a jewelry store (nothing handmade) and said jewelry gets priced at 300% of what they paid. That was so shocking to me I never forgot it.

    Individual artists who create one of a kind designs pour their heart & soul into what they make. For someone who merely puts the jewelry in their case and takes it out when someone asks to see it and then profits that much is beyond belief.

    It’s understandable they wouldn’t want you selling the same item within a certain distance of their store, but I would put a time limit on that arrangement, even if it is a variable (meaning after they’ve sold the last of that particular piece and you don’t plan to give them any more of it).

    To say they won’t be responsible if an item is stolen would be out of the question for me. An upscale consignment clothing boutique here (S. Fla.) does 50/50 as does an artists’ consignment (jewelry + other things).

  • A. Nicola says:

    Yeah, I feel 300% is ridiculous and unfair, and I second what Tavette says…we are the creators, we buy the materials…why should the seller profit THAT MUCH? This fear of dealing with outrageous shops/galleries has been hindering me from getting out there… still, it’s very helpful to read these concerns from other jewelers, so I know how to handle these issues when I do get the balls to approach retailers!

  • Nancy Bailey says:

    First of all, your jewelry is beautiful! We have our jewelry in a gallery and having been in a couple galleries over the years, the percentage that some of these galleries require is definitely not necessary. But of course, I guess it would depend on where the gallery is, big city vs. small town. We live in a small town but we get lots of tourists year-round. The gallery we are in only takes 25% commission and we work there 2 days a week. We feel that is very fair. Another gallery just a couple blocks away is taking 50% from what artists have told us. I hate to say this, but I think a lot of it boils down to greed and, in my opinion, hurts the artists. I’m sorry that happened to you, but there are good galleries out there with reasonable requirements. It just takes research and visiting them.

  • Julie says:

    I don’t think any of us like paying an average split of 60/40 (60 being you take) however, if you’re lucky to have a great gallery in an excellent location and you trust them then you need to consider this. What would it cost you to have a store to display your items? What would the insurance on your gallery cost you? What about packaging, tissue, bags or boxes, advertising your gallery, cleaning and maintaining displays, polishing up jewelry displays, paying taxes on the goods sold, filing paper work….need I go on?
    We need to take the entire picture and process into consideration. What’s your time worth? Also think about your own shows, the set up cost, the booth space fee, the time and effort, travel, on and on and on. Its something to think about.
    If you’re not comfortable then release a few pieces and see how they do. Don’t forget its the advertising you’re getting once the person buys and wears your piece as well.
    Good luck.

  • Barbara says:

    Why does it always have to be either/or? Trust me, I’ll take being in a store any day, especially one that likes my work and promotes it. The store wins, I win, the customer wins. The price of my jewellery is the same whether I sell it or a store sells it, but oh, man, the costs of doing shows and never knowing if I’ll even make my booth fee, let alone my gas? Phht. Amortised show after show after show, that’s way more than 30% or even 40%. I do shows because I like doing shows and I like actually meeting the people who buy (or at the very least stop to chat because they like my work — we all need pats on the back), because making jewellery is a very lonely profession. But once you factor in all the calculations and expenses, like Julie says above, it’s a no-brainer: stores and galleries rule. But — BUT — you gotta be smart. Go with your gut. If someone’s promises sound too good to be true, you know what to do.

  • Diana says:

    I have had my pieces in shops where percentages were 50/50; 60/40; 65/35, and my current favorite-70/30. Regardless of your decision regarding this shop – I always have a signed contract-that can avoid future problems and possibly hurt feelings – each party knows the rules & boundries. I have also agreed not to undersell the local shop where my pieces are sold. This has taken some hard thinking on my part – I have learned to look at my work in different ways – on most pieces I make what I need to make, on some maybe not so much – I think it averages out in the end. I’ve been in Sedona – not recently – and I know its $$$$, however, I think you would be getting the worst of the deal-look around some more if you really want the ‘shop exposure’- which isn’t a bad thing.

  • Cat says:

    I almost passed out when I saw their markup…300% is laughable. So they expect their artisans to pay for all their “expenses” the first month they’re open? lol…seriously. You are the artisan. We have so many venues open to us now that there are online shops, our own websites, etc., that we can reach – literally – the entire world. I’m afraid some “gallery” owners have no clue about this little bit of information. Why in the world would they hobble you in your own area with sales? Ridiculous.

    I have heard of a keystone markup, which is 100%, but never that much. That’s what jewelry stores mark their jewelry up (or more, up to 1000% I have heard) that they bought wholesale from some supplier (not artisan). These people must think they run the Louvre. And who on this planet, unless you’re filthy rich, has almost $1000 for a necklace? Your work is beautiful, but if you can get $1000 for it, forget the gallery…haha.

    I’ve always felt that 30% is a fair markdown, and that’s if they buy wholesale. I never do consignment. Ever. For two reasons. One – security. If they “lose” it or something happens to it, you’re out. Two – owners of a store, gallery, etc., will sell merchandise they have already shelled out for first. Stands to reason they will try to recoup money that’s already left their pockets. Stunning jewelry, such as yours, may be priced right out of most of their customers’ ranges, and they may already know this. It’s eye candy for the store to look prestigious.

    There’s no scenario where I would prostitute myself to these money grabbing owners. Your work is gorgeous, and you can sell it all by yourself, sister…tell these “friends” of yours that you have a wide following and don’t feel it’s right to limit yourself or your sales to their gallery. Seriously…forget running….drive as fast and as far from these people as possible! Start going to shows, get your pieces online and start advertising in your local newspaper publications. You can do this. And as far as reputation building? Personally, if I saw a necklace in a store for $900, I would think automatically that THIS artisan is out of my league. No sales there, right? I’m not alone, I’m sure. There are a lot more of us (the ones who think of the MANY pieces we could own for that amount) than there are of them (including the gallery owners who think the uber rich will suddenly grace their store and buy them out of all their magnificent stock). Appeal to the person who loves quality and is willing to pay for it (within reason)…not take out a second mortgage to own it.

  • Sue Shade says:

    Thanks for sharing this great information.

  • Alice Olsen says:

    I’ve had my jewelry in three different consignment shops through the years and have never come out a winner. All 3 shops have lost jewelry somehow or another. One of the 3 shops sold and didn’t inform me. They held a “bag” sale before they sold it and my jewelry was part of that sale. I didn’t receive compensation for this “sale”. I did get a letter from the new owner letting me know she was the new owner. I sent pictures of my jewelry that had not been returned but she didn’t have any of it in the shop. This shop was out of my state so I couldn’t see what was going on with the business. Another consignment business just closed and disappeared into the night…with my jewelry. The 3rd shop had “lost” 4 pieces of my jewelry. It took 2 yrs. to get compensated for it. She is a local business and did style shows in our community. I spread the word about her morals, her shows stopped and I received a check. So DO NOT sell by consignment I had agreements with all 3 businesses but the expense of going through the legal avenues to get compensation would have been more of a loss. The cost of my jewelry would not have paid for the fees.

  • Jean Megahan says:

    You jewelry is beautiful. From my experience they sure want the lions share. Most reputable galleries take 40-50% commission. And they are right to not want the prices to vary. It is tabu to have different prices. To quote several mentor of mine “one piece one price, period”. Having multiple prices confuses the collector and challenges the value of your art. I have also known artists that were asked to leave a gallery over that very thing. The word that they priced the same piece differently at each venue depending on commission and show fees spread like wildfire. It isn’t fair to the customer at all. There are other ways to sell your jewelry without paying them so much. It’s exciting to have your work shown in a gallery! But, it sometimes it isn’t all it’s cracked up to be. Many customers appreciate the buying experience they receive from getting it directly from you with great customer service. Even when they buy through the web. I like to make contact with them, send a photo of their piece before shipping and make sure to find out it arrived safe and sound and that they love it. You customers will love it and help spread the word for you.

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