Sale or Return issues
SALE OR RETURN ISSUES.
Recently I received an email order from one of the art galleries that has been showing and selling my work for many years. There had been a change of their personnel and the back-room owner was now the person in front-of-house. He sent me a new ‘order’. It was for a range of prints, some in special bespoke format that only that gallery had had before, and they had chosen a collection of good selling images. I was happy to work quickly and make the order a priority.
After I had personally delivered the artwork, along with the trade-price invoice, I waited the usual one-month expecting to be paid. After another couple of weeks I sent the invoice again in case the first had been lost. Then, some weeks after the ‘order’ and delivery, I got a message saying that the new administrating owner ‘thought that all the work was on Sale or Return’.
That sounds like an old issue raising its unwelcome head once again.
OVERALL BACKGROUND TO SOR
One of the established trading practices for some artists and art galleries is to show artwork on a Sale or Return basis. The artist makes the art and gives it to the gallery to try to sell. If it sells the gallery takes the money and passes the agreed percentage to the artist.
The SOR system works well for exhibitions or promotions where there is a time deadline. Both parties know what to expect. At the end of the agreed period the gallery returns the artwork and pays the artist for all sales made during the period.
It also can work for new unknown artists as a way to introduce their work to a gallery that shows and sells a mixed range of artists work. The artist can get into more galleries who will introduce their work to collectors. There is no risk to the gallery because they are not paying up front for art that doesn’t sell.
We haven’t done SOR with galleries for some years. Here’s why.
1. Any ongoing SOR arrangements are usually consigned for exhibitions or special promotions only where there is an agreed purpose and time limit.
2. SOR is basically a good way for an artist to introduce themself to new galleries who have no experience of their quality, popularity, or profit potential. However there is no need if they already know you and your product.
3. Retail galleries can safely choose the option of ‘purchase’ when safeguarded with an agreed ‘exchange for replacement if not sold’ understanding.
4. Purchase orders can expect the best trade discount. But SOR justifies a higher trade price and often means a smaller profit margin for the gallery.
5. Retailers cut down paperwork and other tasks when they already own the product at point of sale. Whereas they incur extra paperwork if they want to use SOR basis for holding stock. More paperwork is less efficient and means more chance of error and delay.
6. SOR means sale or RETURN…Galleries have less incentive to ‘return’ unsold work after a promotion because returning
it takes time and costs money. This creates a bad relationship between artist supplier and gallery.
7. Galleries can hold stock of much more work on SOR because they are getting it free. So they will be tempted to store it in drawers or in back rooms just in case a potential collector asks for it. It won’t get shown.
8. All too often the gallery will be slow to inform the artist about any sale so that it doesn’t get invoiced and payment made. This worsens the bad relationship between artist supplier and gallery.
ADVICE TO NEW ARTISTS FROM AN OLD HAND.
Do you want to be in business with a retailer who expects to get your work on a SOR basis?
They will be less efficient. They will be reluctant to return work that doesn’t sell because of time and costs involved. They will be tempted to just store your work and not show it. They will be slow to tell you and pay you.
I must now go to the difficult process of re-arranging my relationship with the gallery that ‘thought their order would be on SOR’.
What have they sold? Am I going to get paid? Will they expect to return the unsold work now even though some of it was in an exclusive size and format especially created to their request? Is our previously prosperous business relationship over?