Price floors and ceilings

Robert Genn

October 26, 2007



You don't need an economics degree to understand the pricing
strategies of art galleries. One of my former dealers--no
longer in the business--noticed that a very high percentage of
gallery visitors just came in and went out. Painting sales were
so infrequent he had to do something about it. Thinking price
was the problem, he introduced a lot of cheaper items into the
gallery--ceramics, souvenirs, knick knacks. The number of sales
rose but total dollar values declined. The few "anxious
wallets" who did come in simply satisfied their need with less
expensive items. This situation is called "Collapsing Floor
Syndrome."

On the other hand there are galleries that test the high end.
This generally involves "name" and "dead" artists as well as
"investment" art. Dealers may even compete with one another to
see who can get the highest prices. Supply and demand play a
part in this environment, but it has to be said it's good for
living artists to be associated with the high-end artists.
Simply stated, this implies that someday your work will also be
worth more. The downside for artists who work with high-end
galleries is that a gallery may lose interest in the promotion
of less expensive work. This situation is called the "Sky-High
Ceiling Syndrome."

There's lots of gallery talk these days about "price points."
This generally implies a range of prices in a given gallery to
suit all wallets. Many clients come into galleries with an idea
of how much they want to spend, and it's the gallery's job to
show them something in their chosen range. The variation in
gallery capability in this matter is astonishing. Just as some
artists have no business selling their stuff, some galleries
show little or no natural talent as to how art placement works.
This situation is called the "Haven't Got a Clue Syndrome."

From an artist's point of view, it's probably best when an
artist's work is in the middle range of a gallery's price
points--neither falling through the floor nor pushing at the
ceiling. Beginning artists are better off at the lower end,
while mature ones can be nearer the top. It's all to do with
provenance and confidence. Ignorance of this understanding can
be detrimental to galleries as well as artists. Perception of
quality aside, proper pricing in a gallery and consistency
across your stable of galleries is vital to your continuing to
thrive.

Best regards,

Robert

PS: "Artists live in an imperfect world where affairs of the
heart must sometimes be compromised with business." (Sara Genn)

Esoterica: What has this got to do with the joy of making art?
For those of us who also choose to make our living out of our
joy--everything. Without a significant cash flow, an artist
simply cannot travel, grow, learn and maintain the day-to-day
peace of mind to continue. It's a good idea for those of us at
the creative end to re-examine gallery relationships from time
to time and favour those who meet our current needs. Loyalty
works both ways in all seasons, of course, but an understanding
of basic economics and the wisdom to make small commercial
decisions have a lot to do with keeping happy.