It’s hard enough to determine ones own value as an artist, so figuring out how much working with a partner could be worth in the long run might stretch a lot of our minds a bit too far. Truth be told though, if you know where to look and what to keep in mind, it can actually be quite simple do to!

The point is to start with our value defined, because we will be delegating part of it to our partner (this could also be a gallery, agent or pretty much anyone willing to help us with sales, marketing or whatever else we need to further our art business).

So, for the sake of this post, let’s say I am currently selling my work for 1000€ a painting (the technical term is “1k a pop”). First I need to figure out what my main goal is: Is it to sell more for the same price? Or is it maybe to sell the same works, but for a higher price?

In either scenario, the value of any one transaction that a partner might provide for me will be equal to the amount that they sell, but I do have to keep in mind to deduct all of my production expenses fist!

Because were I to just say Jane (my imaginary business partner I just made up) gets 50% of all sales she makes for me, but at the 1000€ price point that my art is being sold at, I have to pay 400€ in expenses to actually make it, I would end up with a 50% cut of the sale, but only 10% of the profit! And 10% is just not going to get me fed and clothed in the long run.

So, I have to be careful to only think about splitting the profits with Jane, not the whole amount, so getting a good starting price for my work is imperative!

If my total expenses are low and I only really spend 50€ on materials when creating each painting, the profit margin (how much I actually take home as pure profit from any one sale) is going to be extremely high, but if I have to use certain costly materials, or if the work is framed (this usually pushes up the expenses quite high), I have to take all of the spending I did to create my work into consideration. The minimum what my price has to do, is to cover all of my expenses and leave enough for me to live my modest lifestyle.

If for example I sell my work for 1000€, but I do have high expenses with my work, I could bump up the price so that Jane sells my paintings for 1400€ — effectively making the profit margin much higher (if of course people are willing to actually pay so much, and Jane is a good salesperson), so as to compensate for the cut of the profit I need to provide for Jane.

And a very important, but quickly overlooked fact is that expenses occur on both sides! Jane might not have to buy canvases and paint, but she probably will have to take a lot of her time to produce a sale; driving around in her car, calling people on the phone, going for coffee and usually paying for the drinks herself … all expenses that she will have to take into consideration when deciding if she wants to work with me or not.

So, discussing both sides’ expenses with our potential partner and setting the price of any sale and consequently the margin of their cut accordingly should not be overlooked.

And we have to talk about risk, too. Until now, all that I have thought about when figuring out the value of Jane’s work was, well, her value (total value of the sale minus both of our expenses).

But what about the risks she is taking when trying to sell my work. Obviously we’re not talking about getting eaten by a bear or getting into a car accident (albeit the more you drive, the higher your chances are), but the risk of not making any sales in a certain period of time.

If I work on my paintings, there is little that isn’t under my control. Apart form my studio burning down, not a lot could prevent me from getting a painting finished if I start working on one and I have a vague idea of what I want to make.

But Jane’s job is unpredictable; she does control how good her sales skills are and how much time and effort she puts into making any particular sale happen, but she doesn’t control the customers; she has no idea how many might actually buy and she is taking all of the risk of not selling anything at all, too. 

The problem really is, if Jane’s content with being paid on the basis of her results, she will probably want to receive a large cut of the sale, just because almost all of the risk is on her side, or — what is more likely — Jane will want to get paid on different terms.

And we’ll discuss those terms tomorrow!