1.1 Commercial galleries and retail outlets

A successful relationship between a practitioner and a commercial gallery is mutually beneficial. The primary role of practitioners is to be creators of original works of art. Forging a relationship with a gallery enables practitioners to gain expert assistance to develop their professional reputation, reach their audience and have their work purchased or commissioned.

 

This can best be achieved through full gallery representation, where the commercial gallery actively manages the practitioner’s career development in the expectation of a long-term relationship with the practitioner.

 

It should be noted that the most common selling arrangement between visual practitioners and their representing galleries is that of consignment, where the gallery is not the owner of the work that is selling but sells the work as the agent of the practitioner.

 

In many instances the relationship between the practitioner and the commercial gallery does not fall under the concept of full gallery representation, for example the gallery may be offering a more limited relationship or range of services to the practitioner. This may be preferable for the practitioner and/or gallery and may be a prelude to full gallery representation or not.

 

It is strongly recommended that all galleries and practitioners negotiate and confirm in writing the nature and terms of the agreement that they have. Practitioners may be reluctant to insist on written agreements if not provided or offered by the gallery. Creating an agreement or documented written correspondence of decisions makes clear the terms of the relationship and can avoid misunderstandings which can lead to a dispute in the future.

 

Contracts and agreements

  • The agreement should list the expectations of both parties. To provide reasonable certainty, the commercial terms of the relationship should be confirmed in writing, whether by a letter of agreement or a formal contract. If there is to be any change to these terms, the practitioner and the gallery should discuss, agree and document it in writing as a variation to the agreement.   

 

Consignment

  • When delivering works to the gallery, the practitioner should supply the gallery with a full descriptive list of works, including a description of the condition of the works. The gallery should check with consignment list against the works delivered to the gallery. The gallery should sign it and return a copy to the practitioner as a receipt. If the practitioner does not prepare the consignment list described above, it should be prepared by the gallery promptly upon taking possession of the works and signed copy provided to the practitioner.   

 

Duration of relationship

  • Full representation relationships are generally expected to be long-term. If negotiated for a fixed period this should be agreed in writing between the practitioner and the gallery. The professional relationship can be terminated by either party giving reasonable notice. The gallery and practitioner should jointly agree on what constitutes reasonable notice in the circumstances. This should be agreed in advance and form part of the contract.   
  • The parties should assess their commercial relationship from time to time. This assessment should take place at lease as regularly as when the results of each exhibition are reviewed.   

 

Services to the practitioner

While the principal service performed by the gallery is selling the practitioner’s work – so that both the practitioner and the gallery earn a living through the sale of art – full gallery representation usually includes the services listed below. The value of these services, and the basis for commission in full representation, lies in their ongoing nature. This is intended to be an indicator of the core services a gallery providing full gallery representation may offer; it is not exhaustive. A gallery should be providing the below services to consider the relationship full representation and to negotiate for commission on all sales of a practitioner’s work including commissions, prizes and awards.

  • Staging regular in-house exhibitions, producing catalogues and invitations
  • Archive and curriculum vitae maintenance
  • Maintaining visual material for promotional purposes
  • Media archive maintenance/records of promotional activities/post show summaries of media outcomes and promotional material
  • Pursing ongoing sales and exhibition opportunities outside the gallery in the public and private sector (e.g. in museums, public galleries, festivals, survey shows, biennales)
  • Pursing commissioning opportunities and advocating for the practitioner’s interests
  • Cultivating collectors and corporate clients
  • Monitoring the practitioner’s interests and legal rights
  • Collaborating with the practitioner on competition, grant and commission submissions
  • Pursuing critical writing and publishing opportunities for the practitioner
  • Recording of all works left on consignment, location of all works sold and on loan

 

Frequency of shows

  • The gallery and practitioner should jointly agree on the frequency of exhibitions. A practitioner fully represented by a gallery should expect an exhibition at least once every two years unless a different timeframe is negotiated.   

 

Territory of representation

  • The gallery and the practitioner should jointly determine the area of representation: regional, state wide, national or international. The gallery should not insist upon a sphere of representation that exceeds its true territory of operations. The gallery should be prepared to substantiate any claim for exclusivity beyond its city/state location. 
  • Terms of exclusivity should be negotiated between the practitioner and gallery and clarified in the contract or agreement. This includes duration, geography and representation relationships with other galleries, partner galleries, consultants etc.   

 

Pricing

  • The practitioner and the gallery should jointly agree upon the retail price of the artwork. All prices quoted by the gallery should be inclusive of GST.   

 

Gallery commission

  • The partnership between the gallery and the practitioner establishes commission as payment by the practitioner for the gallery’s intensive ongoing work and representation in the development of the practitioner’s career, reputation and livelihood. As such it should be recognised as an agent’s fee, earned by the gallery in return for the type of ongoing services listed above.   

 

Terms

  • The gallery and the practitioner should jointly negotiate the appropriate amount of commission paid to the gallery based on the level of service supplied by the gallery. Commission for full representation should not usually exceed 40 percent of the GST exclusive retail price of the artwork.   
  • The gallery and practitioner should jointly agree on the rate of commission to be paid on different types of transactions. For example, sales made direct from the studio, acquisitive prizes and awards received by the practitioner, and commission fees for projects. Rates may be between 10 and 30 percent. On the sale of artworks with high manufacture costs, for example sculpture, the commission is calculated after reasonable intrinsic costs such as additional labour or out of studio foundry and fabrication expenses are refunded to the practitioner in full.   
  • The practitioner should discuss with the gallery any changes to ordinary commission arrangements prior to the relevant event including any interstate gallery representation.   
  • Occasionally galleries and purchasers refuse to deal with each other, resulting in the practitioner being pressured to bypass the gallery to retain the sale. When this occurs, the gallery is nevertheless entitled to expect its full commission.
  • Where other agencies or galleries has been involved in the sale of the work, the total commission should remain the same. By prior agreement the total commission should be split between the managing parties, so the practitioner receives their full share of the retail value. For example, where a practitioner sells work through exhibiting as a finalist in an art prize, and the prize organiser charges 20 percent commission, the two managing parties would receive an agreed share of the 20 percent and the practitioner would receive the remaining 80 percent.   

 

Donations

  • Should a practitioner wish to provide a work for a fundraising event the gallery and the practitioner should come to agreement about the gifting of pricing and commission arrangements.   
  • The gallery and practitioner should jointly agree on a reserve price for the retail value of the work to ensure that the value of the practitioner’s work is not undermined.   
  • The gallery should respect any longstanding arrangements practitioners may have with fundraising events and the practitioner should ensure the gallery is informed about these at the start of their relationship.   
  • Asking galleries to forgo commission is in effect a request for donation of a percentage of an earned fee. It cannot be assumed that a gallery is always going to be able to donate in this way, but when it does the donation should be acknowledged on a par with other project contributions.   

 

Commissioning of an artwork

  • Due to the practitioner’s greater involvement with the client on commissioned portraits, site specific artwork etc. a lower than standard gallery commission rate may apply. This rate and the roles and responsibilities of all the parties involved (i.e. documentation, supervision, insurance cover, client liaison, transport, framing and installation costs) should be negotiated prior to commencement of the project. Gallery commission paid on project commissions should be based on the practitioner’s profit, not the full value of the commission.


Payment and sales

  • The sale should be evidenced in writing. It should include all terms of the sale.
  • Payment to the practitioner should occur within 30 days of the sale or payment being received by the gallery, whichever is sooner.
  • Except where the sale is to a public institution, a minimum deposit of 25 percent for works under $1,000 and 10 to 15 percent for more expensive works should be paid by the client to hold the work for purchase. The holding period should be limited to 30 days. If the sale does not proceed, the deposit should be forfeited by the gallery’s client, and the pro rata standard gallery commission should be deducted from the deposit amount with the practitioner receiving the balance of the deposit.
  • The gallery should obtain the approval of the practitioner before proceeding with payment by instalments. Maximum time for the instalment payments to be completely paid off should be three months. Instalment payments should be made in regular stages (for example 30-30-40 percent) with commission paid on each instalment. The practitioner should receive each instalment payment within 30 days of the payment being received by the gallery. If the instalment sale is not completed within 90 days, the gallery should pay the practitioner the full retail price less the relevant commission.
  • Credit extended should be entirely at the gallery’s own risk. The gallery and the practitioner should jointly agree whether or not written notice is required before the gallery extends credit to the purchaser.
  • On request the gallery should keep the practitioner apprised of the progress of purchases, what is on reserve, and any instalment payments due or received.
  • The gallery should provide a statement of account to the practitioner every 90 days and on request verbally. This accounting should include a list of sales during the period, the sale price, commission payable, and details of all expenses payable by the practitioner, and should be accompanied by the payment of any amounts owing to the practitioner.
  • The gallery should provide the practitioner with details of purchasers on request. It is a breach of the representation relationship for the practitioner to use this information to seek direct sales without the payment of commission.
  • It is recommended that the proceeds of a sale, minus the gallery’s commission should be lodged in an account separate from the gallery’s funds. Payments to the practitioner should be disbursed from this account. The funds in the account should not be used for any other purpose. If the gallery does not maintain separate accounts, it must disclose this in writing to its practitioners.
  • The gallery may agree to ‘reserve’ a work for a client and undertake to call that client before selling to someone else. This is distinct from holding a work against a commitment to buy. In the case of public institutions or trusted clients, a work may be reserved for an agreed period until approval is secured from a Board of Trustees or a client’s partner.


Discounts

  • The gallery has an obligation to the practitioner to represent the work as fully as possible and to the best advantage and not to undermine the value of the work. Selling as a discount is discouraged. If a gallery does give discounts, it should have a policy on discounting which should be clearly understood and agreed to in writing by all parties.


Prizes and awards

  • The gallery should send on any information it receives regarding prizes, art awards or acquisitive exhibitions that it considers of interest to its practitioners.   
  • The practitioner should notify the gallery of their interest in entering prizes, awards or acquisitive exhibitions after receiving entry forms directly from any institution. In such cases the practitioner should ensure that the gallery will be credited in documentation, catalogues, wall labels and opening speeches. Where the gallery has donated commission to the event it should be acknowledged on a par with donors of an equivalent cash value.   
  • The terms of participation and commission rates for these events should be based on discussion and agreement between the practitioner, the gallery and the host organisation. The practitioner and gallery should jointly agree on an approach to prizes where the host is seeking to charge a secondary rate of commission that will impact on the prior agreement on commission between practitioner and gallery, insisting on all works selected being for sale.   
  • Generally, if the value of an acquired work is less than the value of the prize, where gallery commission applies, it should be calculated only on the value of the work. In the case where the practitioner is judged to be the recipient of the non-acquisitive award or prize.   
  • Where works entered in a prize are sold to a private buyer or host organisation, they are subject to the rate of commission negotiated between practitioner and gallery.   


Record keeping

  • At the end of each financial year the gallery should undertake a stocktake and send to each practitioner a list of their works held on consignment, a list of sales made throughout the year, and make payment of any amounts owing to the practitioner. Individual stocktake statements should be issued more frequently for practitioners with a substantial turnover of stock.   


Exhibition arrangements and costs

  • Costs borne by the practitioner or gallery can vary greatly. The rate of commission should be adjusted accordingly to reflect the costs devolved to the practitioner.   
  • The gallery and the practitioner should agree in advance on who will pay for what exhibition costs (for example, transport, promotion, documentation, framing, printing, postage, food and drink, advertising). It is common practice for the practitioner to be charged for the cost of transport to the gallery and the gallery to pay for any return transport costs.   
  • The gallery should make clear the nature of the exhibition (solo or group show) and costs should be allocated accordingly in a fair and equitable manner.   
  • The party that pays for any photographic documentation should own that material. This refers only to the ownership of the documentation material itself and not the copyright embodied in it. Prior to use these images should be selected and/or approved by both the practitioner and the gallery.   
  • The practitioner and the gallery should discuss and agree who is to pay the cost of framing and whether commission is to be calculated on the framed or unframed price. In most cases the practitioner is responsible for the cost of framing their work for the purpose of presenting and selling the work. In the case of unique items (as opposed to editions) the gallery commission is applied to the achieved process including the frame unless otherwise agreed. In the case of the editions the practitioner’s receipted framing costs should be refunded to the practitioner from the sale of the work and the commission calculated on the unframed selling price.   


Tax

  • Practitioners must supply the gallery with the Australian Business Number (ABN) and advise the gallery whether or not they are registered for Goods and Services Tax (GST).   
  • Both galleries and practitioners should educate themselves about the implications of the tax system for their practice and regularly update their knowledge by consulting with their relevant professional organisations, their tax agent and the Australian Taxation Office.   
  • The decision whether to register for an ABN and GST should be made by the practitioner and their tax agent. Galleries may recommend, but should not insist, on GST registration by their practitioners.   
  • When entering an agreement where work is sold on consignment and both practitioner and gallery are ABN and GST registered both parties should clarify which one will issue the tax invoice to the buyer. If the gallery wants to issue the tax invoice when it should agree to provide the practitioner with a copy of the tax invoice in a timely manner.   


 

Copyright

  • The practitioner’s copyright may be managed by the practitioner, the gallery or by Copyright Agency, the Australian visual arts copyright collecting agency. This should be discussed and agreed by the parties.   
  • The gallery should get express permission, preferably in writing, before reproducing a work, even for promotional reasons, and should not necessarily expect that the practitioner will give permission without charge.   
  • The gallery should not be expected to pay copyright fees for the reproduction of the practitioner’s work where the purpose of the reproduction is to sell the original of the work on the practitioner’s behalf (such as invitations, catalogues, advertising and publicity purposes); where the gallery is an a direct and continuing relationship with the practitioner; and where the relationship is nurturing of the practitioner’s career rather than purely financial.   
  • All commercial uses of art work by the gallery should be negotiated separately and attract a licence fee – for example, for the production of merchandise such as postcards or t-shirts. 
  • The gallery should not encourage or unduly influence the practitioner to assign or licence their copyright.

 

Moral rights

  • The gallery must not require the practitioner to consent to something that would infringe their moral rights.
  • The gallery must not alter the work or do anything that would compromise the integrity of the work or permit anyone else to do so while the work is in the gallery’s care.
  • The gallery must correctly and clearly attribute the work to its creator.
  • The gallery should consult with the practitioner regarding the presentation and installation of the work.
  • The gallery and the practitioner should agree on appropriate signage if the work requires a public warning regarding its content.

 

Media and promotion

  • The gallery and the practitioner should discuss and agree in writing the best promotional strategy for work, including frequency and timing of exhibitions and whether work should be available for selected view prior to an exhibition being scheduled.   
  • The promotional activities undertaken by the gallery on the practitioner’s behalf should be clearly documented and regularly brought to the practitioner’s attention.   
  • At the conclusion of an exhibition, the gallery should present the practitioner with a media package containing copies of advertisements, invitations, press releases, reviews and other relevant materials relating to the promotion of the exhibition.   

 

Duty of care

  • The gallery should exercise diligence and care when handling, storing, displaying and packing the work, and undertake to supply suitable insurance, display, security, lighting, fire prevention and environmental controls.   
  • Should a work be damaged while entrusted to the care of the gallery, the practitioner should be consulted in the first instance and given first option to repair the work or approve the chosen conservator. The gallery should cover the cost of repair.   


Insurance

  • Galleries should carry an insurance policy that comprehensively protects works in their care, custody and control both in the gallery and in transit. If there is a justifiable reason why they do not, they should inform the practitioner in writing.   
  • The agreement should clearly detail the types of insurance provided by the gallery for the work in transit and/or in the gallery (for example, theft, accidental damage, malicious damage, public liability).   
  • The agreement should also detail what process will be followed where work is damaged during transit to the gallery including notification of the practitioner.   
  • In the event of any breakages, theft or damage to the work in the gallery’s care, the practitioner should be paid regardless of the gallery’s level of insurance or the time taken to settle the claim.   

 

Additional obligations of the practitioner

  • The practitioner should supply the gallery with a list of suggested invitees for exhibition openings, including a list of those who have previously bought their work.   
  • The practitioner should deliver (and in some cases collect) the agreed work to the gallery in good order at the agreed time.
  • The practitioner should provide accurate biographical and contact information to the gallery.
  • The practitioner represented by a gallery should not undermine or compromise their relationship with the gallery by attempting to establish an independent business relationship with clients or by disclosing the client list to any other party.   
  • Where a gallery has significantly supported and assisted an practitioner to access international markets, the practitioner should ensure through their contract and discussion/negotiation that the originating gallery is acknowledged through a percentage fee of any sales generated over an agreed specific time period. While the amount in dollar terms may be low, it is an acknowledgement of the risk and support that the gallery has undertaken in promoting and exporting the work of the practitioner overseas.   
  • The practitioner should respect health and safety parameters enforced by the gallery and recognise their responsibility to protect those who work near or are viewing their work.   
  • When the practitioner received directly an invitation to exhibit work in another place the practitioner should disclose and discuss this with the gallery.   
  • The practitioner should credit the gallery when their work is exhibited in any other venue (except where that exhibition is initiated by one of the practitioner’s other galleries).   
  • If the practitioner is going to be uncontactable for an extended period of time (for example on a residency) then the practitioner should make their gallery aware of the situation and leave instruction for the gallery should they have any administrative enquiries come through during this period where the practitioner’s agreement is required (for example licensing requests and media interest).    


Mediation over breaches of contract

  • Mediation should be sought in the case of disputes over breaches of contract before legal action is commenced.

1.1.2 Single or one-off exhibitions

In some circumstances, practitioners may organise a single or one-off exhibition with a gallery where there is no commitment to a continuing relationship. Such circumstances include, for example, a practitioner who organises a one-off exhibition in a different city or region that lies outside their normal area of representation, or when a gallery agrees to take on a practitioner for one show only. This may be in order to test the market for their work, prior to any offer of full representation being made. Both parties need to be absolutely clear and have a written agreement on matters such as the duration of the relationship, level of services provided, and commission charged to avoid possible confusion about the nature of the representation down the track.

 

In a one-off exhibition, the costs to the practitioner can vary greatly. Practitioners are usually responsible for transport costs, framing, promotional and private view costs and, depending on the arrangement, display costs. The commission paid to the gallery should be proportionate to the financial input from the practitioner.

 

  • There should be a written contract or agreement.
  • The gallery and the practitioner should consult and jointly determine who pays for any costs.
  • The gallery and the practitioner should jointly agree upon the appropriate amount of commission paid to the gallery and it should be proportional to the level of service supplied by the gallery.   
  • Commission for a single exhibition should be less than the 40 percent for full representation.

1.1.3 Multiple sales outlets

A practitioner who does not have an exclusive relationship with a representing gallery may exhibit in several different venues more or less simultaneously in a given area, sometimes in the same city. For those craft and design practitioners whose works have a low commercial value, it may be best to look instead for galleries/retail outlets by suburb and where exclusivity is important to the gallery/retail outlet, to consider offering exclusive products. In lieu of any contractual obligations, outlets and practitioners should apply principles of co-operation and common sense to resolving potential problems such as over-exposure of work and pricing differentials. 

 

The question of territory should also be discussed with the practitioner’s dealer/agent to ensure there is no difference in expectations. Artists may seek representation in different states and territories and should check their contract/agreement to ensure this action is accepted by their gallery. 

 

  • The practitioner and the gallery/retail outlet should discuss the placement and/or exhibition of their work in other venues and co-operate in managing the exposure of the work and pricing differentials. 
  • The practitioner should keep track of their work through up to date consignment lists. The gallery/retail outlet and the practitioner should mutually agree how to handle work on consignment that is not selling. 
  • Practitioners should refer clients who approach them directly back to their gallery/retail outlet.

1.1.4 Selling online

Many practitioners, art galleries, virtual galleries, and retail outlets sell work online. Craft and design practitioners in particular may have their own website or sell work via online marketplaces such as Etsy, Big Cartel and Madeit. Practitioners should not undercut their gallery/retail outlet by selling directly online without having a negotiated agreement. Similarly, a gallery/outlet should not undersell the maker by placing items on sale/ at a discount without prior agreement. See further 1.4.1 Managing Impact on Representation/Retail Relationships below.

 

Online sales

  • Works sold by a gallery/retail outlet online may be subject to the same arrangements as works sold through the physical gallery/retail outlet, including in relation to commissions.   
  • Galleries/retail outlets or practitioners who sell work online should check:
    • What additional fees are involved, if any
    • How secure the website is against copyright infringements and protocols for enforcement against infringement
    • Any representational or definitional issues e.g. ‘handmade’, ‘ethical’, ‘Australian made’
    • That the work is properly attributed and interpreted
  • Practitioners with websites should notify their gallery and provide links to their gallery’s website and vice versa.
  • Practitioners and galleries should remove such links when the relationship between the parties has ceased.
  • Practitioners selling online through marketplaces or their own website will also need to consider Australian and international Consumer Law, such as safety regulations. See Australian Consumer and Competition Commission (ACCC).   


Intellectual property

  • The gallery or the owner of the website should discuss with the practitioner whether people visiting the site should be able to download copies of the work or alternatively deal with the work in a way that requires permission. Either way, the gallery or website owner should obtain relevant written permissions. 
  • Practitioners who become aware of products infringing their copyright being sold online, for example a t-shirt bearing an image of their artwork, can apply to the website for it to be removed from sale following that website’s infringement procedure. The practitioner may wish to specify details, such as the pixel resolution preferred for the uploaded image. For example, a low pixel resolution may provide some protection from use of unauthorised copying. In such a case, the gallery should agree with the practitioner to clearly indicate on the site the purposes for which the work may be downloaded.

1.1.5 Tax considerations when selling on consignment

When entering an agreement to put work on consignment with a sales outlet or other business the practitioner should be sure to clarify with them:

  • the ABN and GST status of the practitioner;
  • the ABN and GST status of the gallery, agent, retail outlet or other business;
  • if both are GST registered, who will issue Tax Invoices to the buyer. Only one Tax Invoice can be issued per sale. If the sales outlet or other business issues the Tax Invoice, a copy should be forwarded to the practitioner in a timely manner.

 

Where the practitioner is GST registered, GST must be charged on the sale price of the work irrespective of the sales outlet’s or other business’ GST status.

 

Conversely, if the practitioner is not GST registered, then GST cannot be charged on the sale of the work, even if the sales outlet or other business is GST registered. GST will still be charged to the practitioner on the commission fee if the gallery is GST registered.

 

It should be noted that a number of different tax arrangements have been made by galleries, agents, retail outlets and other businesses involved in the sale of art and craft under Tax Office ‘private ruling’ provisions. Practitioners should be very clear about the practices of any businesses with which they deal.

 

The decision whether to register for an ABN and GST should be made by the practitioner and their tax adviser. The sales outlet may recommend, but should not insist on GST registration.


Both sales outlets and practitioners should educate themselves about the implications of the tax system for their practice, and regularly update their knowledge by consulting with their relevant professional organisations, their tax adviser and the Australian Tax Office.

1.1.6 Work bought outright by galleries/retail outlets

An alternative for the gallery/outlet to taking the practitioner’s work on consignment is to buy it outright for resale. This has the advantage of being a simpler transaction for both the outlet and practitioner, involving only a contract and an understanding of standard terms of payment. The question of responsibility for display costs, insurance, and return of work is clear-cut in an arrangement where the work is bought outright.  

 

When galleries and retail outlets purchase work outright, they usually add mark-up to the practitioner’s wholesale price to arrive at the retail price of the work. The practitioner may not have any say in the level of mark up, and therefore what the retail price will be. There may also be resale royalty implications when a work is first bought by a gallery for later resale.

 

Contracts and agreements

  • A contract of sale should be drawn up which confirms the gallery/retail outlet’s copyright and moral rights obligations to the practitioner and stipulates any other conditions or information such as display information, practitioner access and a resale clause.   
  • The contract or agreement should also outline the Resale Royalty implications for the practitioner who may be entitled to a 5% royalty on the second commercial sale of work/s sold for more than $1,000 after June 2010. For more information on the Resale Royalty Scheme and to register, visit the Copyright Agency.  

 

Product development

  • In some instances, a retail outlet may develop a product in collaboration with the practitioner, provide insight into market demands and trends and act as a partner in the development of the product. While this is not necessarily a commission in the traditional sense of producing for a particular person or organisation, the standards relating to commissioning of art, craft and design can be applied to this kind of product development. 
  • The recommendations in Chapter 4: Special Purpose Commissioning should be observed for product development between a retailer and the practitioner.   
  • Where the retailer is involved in product development with the practitioner, the retailer should purchase the stock outright once it is developed to an agreed outcome.   


Pricing

  • Pricing, including wholesale/retail, visual concept fees, trading terms should be negotiated between the practitioner and the gallery/retail outlet when developing the contract for the product/s.   
  • The practitioner should set a wholesale price and advise on a recommended retail price for the work. 
  • The practitioner should discriminate honestly between production line, limited edition and ‘one-off’ works and price or recommend on pricing of work accordingly. 
  • The practitioner may offer the gallery a two-tier pricing system for taking work on consignment and for buying work outright. The mark up on works bought outright may be higher than the fee that would have been received by the outlet under a commission arrangement. This increased return to the outlet recognises that the outlet has taken on the risk of the sale. 


Mark up or commission

  • The practitioner and the gallery/retail outlet should agree on variations in the amount of the mark-up or commission according to the scale of the order and the wholesale value of the work.   
  • Where other agencies or galleries have been involved in the sale of a work, the total of the mark-up or commission should remain the same. By prior agreement, the total commission should be split appropriately between the managing parties, so the practitioner receives their full wholesale price as agreed. 

 

Discounts

  • Selling at a discount is to be discouraged. Gallery/retail policy on discounting should be clearly understood and agreed to by all parties.  

 

Payment and sales

  • The practitioner should establish a credit reference for the gallery/retail outlet to ensure it is reputable and that the practitioner will be paid for work bought outright.   
  • Payment by the gallery/retail outlet to the practitioner should be made within 30 days or less as negotiated.
  • If the practitioner is GST registered they will charge GST on the wholesale price of the work. If the gallery, agent, retail outlet or other business is also GST registered, they will charge GST on the retail price of the work. In both cases the GST component is collected and forwarded to the ATO.    


Insurance

  • Insurance for the work in transit to and from the gallery/retail outlet needs to be negotiated and agreed. Once received, the work is the gallery’s/retail outlet’s responsibility to insure.   

 

Personal Properties Security Act (PPSA) 

  • The PPSA offers artists some limited protection to artists if a gallery, in which they have work on consignment, goes into administration or closes through the Personal Properties Security Register (PPSR). It is recommended artist’s register each of their works on the PPSR that each gallery that represents them has.