Do You Understand the Impact of Discounts?

[Harriete E Berman]

Today's post on ASK Harriete is titled My Seasonal Stress Disorder: DISCOUNTS. It offers a short description of the issues and a link to another article about discounts by Jason Horejs.

I strongly disagree with the premise of discounts for one of a kind art or craft. Every holiday season, I whither like a dried up fall leaf as I watch the art and craft world try to compete in a shop till you drop world of consumer discounts.

 

Ten years ago I wrote a document about DISCOUNTS for the PROFESSIONAL GUIDELINES. The opinions in this document were reviewed,  evaluated, supported, and edited by Bruce Metcalf, Board Liaison and Contributing Editor; Suzanne Baizerman, curator; Tami Dean, production artist; Marilyn da Silva, artist; Lloyd Herman, curator; Cherry LeBrun, owner of DeNovo Gallery; Marc David Paisin, Attorney at Law; Dana Singer, Executive Director of SNAG; Lynda Watson, metalsmith; and Carol Webb, production artist.  

In this post on Crafthaus, I decided to post the introduction to the PROFESSIONAL GUIDELINES document DISCOUNTS.

This DISCOUNTS.document is a complement to the Professional Guidelines topics titled, Consignment Contract  and Exhibition Contract where discounts may discussed as a contractual issue between the gallery or exhibition sponsor and the artist.

 

I  Introduction

In our society, price establishes worth and value.  For better or worse, the common denominator in the marketplace is the dollar, and worth is measured by what people will pay.  It is the job of both the artist and the gallery to establish the value of the artist’s work (by virtue of its uniqueness, craftsmanship, reputation and quality), and remind people that this worth is reflected in its price.  The price confirms this value.  If the selling price is negotiable, then the discounted price will be the true value, not the retail price.  As a result, it’s in every artist’s interest to maintain close control over the selling prices of his or her work.

 

When a store decides to offer a discount on merchandise that they purchased wholesale, they are simply cutting their portion of the retail price.  In the retail business, discounting has several motives.  Among them are: to attract new customers by offering selected products at a loss; to get rid of products that have not sold well; or to eliminate old inventory to make space for new inventory.

 

But the art business is different than ordinary retail.  The selling of art functions at a different level, not in the least because most galleries do not own the work they sell. Generally, artwork is consigned to galleries, and the artist owns the work.  Nor is it very dignified to think of artworks as mere merchandise.  Consequently, discounting in these circumstances can have an immediate impact on the value of the work and the artist’s reputation.  Not all of it is good.

 

It has become increasingly common for galleries to offer discounts from their retail prices.  At one time, the practice of giving discounts applied only to major works of art, at prices of tens or even hundreds of thousands of dollars.  Discounts were rarely offered - except to very important collectors.  This is no longer the case.

Awareness about "collector's discounts" appears to be widespread.  Requests for discounts have increased dramatically, and the prices at which collectors request them have dropped.  Reducing the price up to 10% is not unusual; sometimes even greater discounts are requested.  In this atmosphere, no self-respecting collector wants to be the one that DIDN’T get a discount.  The net result is that retail prices are assumed to be negotiable, and galleries expect artists to share the financial impact.

 

READ THE  DISCOUNTS   document in the  PROFESSIONAL GUIDELINES to understand the impact of Discounts on your artwork, why it devalues your work and your reputation.

Share your opinion on discounts in the comments. What do you say when people ask for discounts?

© 2002, 2010 Harriete Estel Berman

Special acknowledgment is hereby given for the contributions of the Professional Guidelines Committee 2002; Bruce Metcalf, Board Liaison and Contributing Editor; Suzanne Baizerman, curator; Tami Dean, production artist; Marilyn da Silva, artist; Lloyd Herman, curator; Cherry LeBrun, owner of DeNovo Gallery; Marc David Paisin, Attorney at Law; Dana Singer, Executive Director of SNAG; Lynda Watson, metalsmith; and Carol Webb, production artist.