Business Development · Business Strategy

How to decide on pricing structure and profit share with artists?


March 27th, 2021

I want to start an art subscription business for commercial spaces - hotels, offices, residences.

I'd like to know how to decide on pricing structure - inclusive of installation.

What kind of commission structure is fair to the artists? What about right of ownership?

Paul Garcia marketing exec & business advisor

March 28th, 2021

It is too easy for artists to self-promote online these days. And a majority would probably not be interested in an art rental arrangement or interested in seeking commercial clients. Artists generally do not include installation services. They deliver a finished product and the buyer installs, unless you're using an interior designer to install.

The concept of fairness has a lot to do with whether the artist is even interested in considering a broker/dealer relationship. There are a lot of standards for the gallery business on how much the dealer gets for facilitating a sale, but the dealer also has a lot of expenses that go into finding those sales. What's "fair" is likely determined a lot by the effort you as the dealer go through to make sales.

My suggestion, if you can afford it, is to create your own art warehouse and be your own broker/dealer where your clients are interior designers and probably real estate agents. For example, if you rent to interior designers working for real estate agents staging homes for sale, you have a steady existing business that is always temporary, and the designer no longer needs to warehouse the artwork the way they warehouse the furniture. You have two middlemen and your profits might be lower, and you also run into the cost of shipping. So you'd want to try it out locally rather than nationally before choosing multiple cities in which to warehouse art.

There are probably some other business models that would work. But what I encourage you to do is validate your marketing strategy. Right now you're swinging around an idea, and instead you need to find product-market fit and determine exactly who is willing to pay what under which circumstances. This will determine if you even have a business.

Good luck.