The Art Business — Part 02: How Consignment and Contracts Work

There is a point in an artist’s career when a painting leaving the studio is no longer simply a painting leaving the studio. It might be heading to a gallery, an art fair, a shop, an exhibition, or a collector. Someone else may now be responsible for showing it, promoting it, transporting it, and eventually selling it.

That is where the business side of an art practice becomes impossible to ignore.

Two words come up again and again: consignment and contract. They can sound intimidating, especially when you are more comfortable talking about materials, ideas and exhibitions than percentages and legal terms. But understanding them is not about becoming an art lawyer. It is about knowing what happens to your work once it leaves your hands.

A good agreement should not make a relationship with a gallery feel less trusting. It should make the expectations clearer for everyone involved.

What Exactly Is Consignment?

When an artist consigns work to a gallery, the gallery takes possession of the work with the purpose of exhibiting and selling it. The artist is generally still the owner until the work is sold, while the gallery acts as the party responsible for presenting and selling it under the agreed terms.

This is different from a gallery purchasing the work outright. The arrangement benefits both sides. A gallery can represent and display work without having to purchase every piece in its inventory, while the artist gains access to the gallery’s audience, exhibition space and sales network. Galleries commonly use consignment because it allows them to hold inventory without tying up as much capital in purchasing it.

But handing over a painting and saying “you can sell this for me” is not enough. The important part is deciding exactly what selling this for me means.

The Contract Should Answer the Basic Questions

A consignment agreement is essentially the written record of what both sides have agreed to.

At minimum, you should know which works are being consigned, their agreed prices, how long the gallery can hold them, what commission the gallery receives, when you will be paid and what happens to unsold work. More detailed agreements may also cover shipping, insurance, framing, marketing, photography, discounts and exclusivity.

Before signing, you should be able to answer a simple question: What happens to my work from the day I deliver it until the day it is sold or returned? If the answer is unclear, the agreement needs more discussion.

This is particularly important because artists sometimes rely on conversations rather than written terms. A friendly relationship with a gallerist is valuable, but memories can differ and circumstances can change. Artist-support organisations consistently recommend written agreements because they give both parties something concrete to refer back to if a disagreement arises.

Understand the Commission, Not Just the Percentage

The gallery’s commission is usually one of the first things artists discuss. A gallery might retain 40%, 50% or another agreed percentage of the sale price. There is no single commission that applies to every gallery or market, so the important thing is not simply whether the percentage sounds fair. It is understanding exactly how the calculation works.

For example, if a painting is priced at $2,000 and the gallery receives 40%, your share would normally be $1,200. But what happens if the gallery sells it for $1,800 after giving the collector a discount?

That question matters. Your agreement should establish who can authorise discounts and how a discount affects each party’s share. Artsy specifically recommends discussing this point because discounts are common in gallery sales and can otherwise create confusion about the amount the artist ultimately receives.

Do not be embarrassed to ask for an example calculation. If you understand the numbers before signing, there is much less chance of an unpleasant surprise later.

When Will You Actually Get Paid?

A painting being sold does not necessarily mean the artist receives their money immediately.

Your agreement should specify the payment schedule and the circumstances under which payment is made. Some gallery agreements establish regular payment periods, while others tie payment to the gallery receiving funds from the buyer. What matters is that the arrangement is clearly stated rather than left at “we’ll pay you when it comes through.”

This is one of the areas where vague agreements can become particularly difficult for artists. Delayed artist payments have been a recurring issue in the art market, making payment terms an important part of any professional relationship.

Ask:

When does the payment clock start? How long does the gallery have to pay me? Will I receive a statement showing the sale and deductions?

You are not being difficult by asking these questions. You are running a business.

What Happens If Your Work Is Damaged?

Once a painting leaves your studio, it may be handled by several people before it reaches its final destination. It might be transported, unpacked, installed, stored and moved again. Your agreement should therefore address responsibility for loss or damage.

Who insures the work while it is at the gallery? What happens during transport? What happens if a piece is stolen or damaged? Is the value used for insurance the same as its retail price? These are not dramatic hypothetical questions. They are practical ones.

Artist-gallery guidance recommends addressing insurance, transportation and responsibility for the work explicitly rather than assuming the gallery will automatically cover everything.

It is also wise to photograph each work before handing it over and keep a record of its condition. Your inventory should include the title, medium, dimensions, year, price and the date it was delivered. The more valuable your work becomes, the more important this documentation becomes.

Shipping, Framing and Other Costs

The gallery’s commission is not necessarily the only financial consideration.

Depending on the agreement, someone may have to pay for framing, packaging, shipping, installation, storage, photography or promotional materials. These costs can be significant, particularly when work is travelling to an art fair or an exhibition in another city.

Do not assume that “the gallery takes 50%” means there are no other deductions.

Ask directly:

Which expenses are my responsibility? Which expenses does the gallery cover? Can expenses be deducted from my share of a sale?

These details may feel small when you are excited about an exhibition. They feel considerably less small when you receive the final payment.

Consignment Is Not the Same as Representation

This distinction is especially important for emerging artists. You can consign work to a gallery without giving that gallery exclusive control over your entire career.

A consignment agreement might cover five paintings for one exhibition. A representation agreement may cover your broader relationship with the gallery and could include restrictions on selling or exhibiting elsewhere.

This is where artists need to read exclusivity clauses carefully. Does the gallery have exclusive rights in one city? One country? A particular market? For a specific period? Does the agreement cover all of your work or only the pieces supplied through that gallery?

Never assume that exclusive representation means something narrow simply because that is how it was discussed verbally. If exclusivity is part of the agreement, understand exactly what you are giving up in return for it.

Your Prices Need to Be Clear Too

A contract should also establish the agreed selling price of each work. This matters because artists and galleries need consistency. If your painting is listed at $2,000 in one place and suddenly offered for $1,300 somewhere else, it can create confusion for collectors and undermine your pricing structure.

If prices can be changed, determine who has authority to change them and how you will be informed. The same applies to discounts.

Artists should not discover after a sale that a price was reduced without their knowledge or that the reduction came entirely out of their share. Your pricing is part of your professional practice. Treat it accordingly.

Keep Copyright Separate From the Sale

Selling a physical artwork does not automatically mean giving away every right connected to it. An artist may still retain copyright in the image of the work even after the physical piece is sold, depending on the applicable law and the terms of the agreement.

This is particularly relevant when galleries want to reproduce images of your work for catalogues, websites, social media, advertising or other promotional purposes. Usually, some permission to reproduce the work for legitimate promotion will be useful and expected. But artists should understand what they are agreeing to.

If a contract contains unusually broad copyright or reproduction rights, stop and examine the clause carefully. The physical artwork and the intellectual property surrounding it are not necessarily the same thing.

Your Inventory Is Your Safety Net

Once you begin working with galleries, exhibitions and collectors, memory is not enough. Keep a simple inventory of every work that leaves your studio.

Record:

• Title and year
• Medium and dimensions
• Selling price
• Gallery commission
• Date delivered
• Location
• Consignment period
• Sale or return date
• Payment received

Keep copies of signed agreements, invoices, delivery receipts and photographs. This is especially important if you work with more than one gallery. A professional inventory lets you know where every piece is and prevents accidental double-selling or confusion over availability. It also gives you a much clearer picture of your own business.

The Red Flags Artists Should Not Ignore

Most gallery relationships will not turn into a disaster, but there are warning signs worth taking seriously. Be cautious if you are pressured to sign immediately. Be cautious if important financial terms are only verbal. Be cautious if the contract gives the gallery extremely broad exclusivity without clearly explaining its limits. Be cautious if the gallery can change prices or offer discounts without consulting you. Be cautious if responsibility for lost or damaged work is unclear.

And be particularly cautious if you are being asked to pay substantial fees without a clear explanation of what you are receiving in return. A gallery should be able to explain its business model and expectations. You should be able to ask questions without feeling that you are somehow being ungrateful for the opportunity. A professional opportunity should still be a professional agreement.

You Are Allowed to Negotiate

Perhaps the biggest misconception artists have about contracts is that the document arrives and their only choices are to sign or walk away.

Contracts can be discussed. You can ask for clarification. You can request changes. You can ask why a particular clause exists. You can suggest a shorter consignment period, clarify payment terms or negotiate how certain costs are handled. That does not mean every gallery will agree to every request. It simply means you should know what you are agreeing to.

And if an agreement is particularly complex, especially one involving long-term representation, significant financial value, international sales or unusual legal restrictions,  getting advice from a lawyer familiar with art or contract law can be money well spent. Artist contract resources likewise recommend professional advice when the circumstances are beyond a straightforward agreement.

If raising prices of your art with time is something you struggle with as an artist, read Part 01 of our Art Business Series, Raising Your Prices Without Losing Buyers, for a detailed practical guide on how to gradually and meaningfully increase your art prices with your growing practice.

The Goal Is Clarity, Not Suspicion

Contracts can seem like the least artistic part of being an artist. They involve percentages instead of colour, deadlines instead of ideas, and signatures instead of studio time. But they are also what allow creative relationships to function without unnecessary uncertainty.

Consignment can be a valuable way to place your work in front of collectors and build relationships with galleries. A well-written contract can protect that opportunity by making the practical details clear from the beginning. The goal is not to enter every gallery relationship expecting something to go wrong.

It is to make sure that if something does go wrong, everyone already knows what was agreed. Your art deserves to be taken seriously in the studio, in the exhibition space and in the business conversation that happens around it.

So before you hand over the next painting, take a moment to read the agreement.

Know the price. Know the percentage. Know who is responsible for the work. Know when you will be paid. Know what you are giving permission for. And know when the agreement ends.

The more confidently you understand those things, the easier it becomes to say yes to the right opportunities, and no to the ones that do not make sense for your practice.

Editor’s Note:

Last week to submit to our open call: 101 Art Book – Faces Edition is here. The deadline is September 10, 2026. We can not wait to see what Faces mean to you, apply to the open call now and be part of an international art book with Faces at its heart!