Apart from passion, one of the main reasons for venturing into a certain business is to make money. A frequently asked question about the art industry is, do art galleries really make money? Of course, art galleries bring in an income depending on the management’s business plan. If you are thinking about opening one, you should familiarize yourself with ways within which art galleries make money. Being diverse is crucial as you cannot count on one line of earnings but rather, have few income streams. Now that you know art galleries make money, it is essential to know how this income is made.
The most notable and manageable ways that art galleries make cash are discussed below. Commission from sales is the main way that art galleries make money. This is a certain percentage of the total amount an art has been sold for that the gallery keeps, giving the rest to the artist. Different galleries propose different commissions depending on what is offered and the amount of work they are putting in to sell your art for the appropriate price. Average commission is usually at 30-50% but in some instances it has gone as high as 70% and as low as 10%.
Some factors dictate the amount of commission to be charged by the art gallery. For instance, the reputation of the gallery and the artist are considered. If the gallery is popular and trusted, it is right that they charge a higher rate compared to others. In addition, if the art gallery is catering for open night catering and marketing costs alone, they should make more money from art. The level of service that the gallery is offering to the artist determines how much they will make from the commission. This means the art gallery will make more cash based on the services provided to artists.
Another way art galleries make cash is by charging an exhibition fee to artists. This is money paid upfront to the art gallery by artists so their art can be displayed and taken care of, also for risks. Some art galleries do not charge an exhibition cost which reduces their cash flow. Setting up a shop plus a hotel at the art gallery is a great way of making money. Majority of galleries have adopted this method and can attest that it makes up to 40% of their total income. Selling cards, prints, ceramics, handmade jewelry, art books, etc, is a good way of making extra income. After browsing the gallery, many clients would appreciate having lunch or coffee.
Indeed, art galleries make a handsome amount of money when they are well strategized. There is no limit to how much they can make while at their peak. Commissions on sales are a guaranteed means to make money, as for each sale that you make, there is a cut for you. Charging upfront fees to artists and setting up a shop plus a hotel at the exhibit can help maximize your profits. Being aware of unique ways to make your art exhibit generate money for you is an added advantage.