When a gallery wants to mount an exhibition of an artist’s work, the artist typically consigns their work to the dealer, or one gallery can consign work to another. “Nearly all artwork that enters the gallery is on consignment,” Denny said. Alternatively, galleries can purchase artwork with the intention of reselling it. That’s a riskier proposition, however, which leaves the gallery more financially vulnerable.
Denny was candid about the Wild West nature of artists’ consignments to galleries. “Like so many things in the art world, terms are often agreed to verbally or informally (i.e., via email) first,” she said. Contracts sometimes follow.
Galleries work on consignment, instead of outright purchase, to aid their cash flows. “We have millions of dollars in inventory at the gallery, and if we had to acquire this work by purchase, it would not be possible to hold this much inventory,” said Denny. “Working on consignment also gives us the option to return unsold works to the artist.”
Denny noted that consignment agreements with artists typically outline pricing, gallery commission, dates of consignment, payment schedules, exclusivity (whether a consigning artist may show with other galleries), and which party is responsible for costs associated with artwork production, framing, packaging, photography, shipping, travel, insurance, and marketing. Mounting a small gallery show is much pricier and more complicated than it appears to viewers wandering in off the street. It’s a gallery’s job to make it look easy, but artists may also shoulder some of the financial burden.
Artists are often vulnerable when they consign works to galleries. Horror stories abound
about gallerists holding artists’ works hostage or paying them late. While collectors’ consignments at auction may feature multi-million dollar stakes, artists’ consignments at galleries are no less important: It’s the artists, after all, who transform burlap, oil, and stretcher bars into meaningful, valuable objects in the first place.