It may sound counterintuitive in a tough economy, but now may be the perfect time to jump in and open an art gallery.
The recession has taken its toll on some of the best retail locations in the country, and landlords are ready to grab any rental opportunity that will fill space and advance the demographic quality of a storefront area property. Opening an art gallery has never been easier, or more profitable.
You will be selling to those customers who were least likely to be hurt by the recent economic turbulence. The risk is lower than ever, and costs are the lowest they’ve been in twenty years. Wait a few years and all that great vacant retail space will be gone.
The old definition of an art gallery is gone – most galleries today are very unique and welcoming shopping experiences. Art critics are a vanishing species and the walls of ego, elitism and arrogance associated with the art market of the past have crumbled into the pages of history.
Today’s artist and today’s gallery owner are savvy partners in the cultivation of collectors and the promotion and sale of artwork. They are also the foundation of the growing cultural tourism movement, where visitors come to experience places, activities and art that authentically represent the past and present of cultures other than their own. These customers appreciate contemporary design. They are eager to learn about the lives of artists, and enjoy an “edu-tainment experience”.
Location, Location, Location. The best locations for new art galleries are near other successful upscale businesses who share their audience. If you locate your art gallery near a five star restaurant, your best business might happen between 6 and 10 p.m. every evening. If your gallery is near the top salon or spa in the area, you might be able to close on both Sunday and Monday. High traffic locations require less advertising only if the demographics of the walk-bys match your store profile.
Many resort areas have great traffic on the weekends and overflow with visitors on both Friday and Monday. Decide whether you want a seasonal business, or one that’s open all year long. There are several locations where a short season can be profitable – but one year of bad weather can put you under!
Destination locations have become very popular, and will grow in popularity due to online marketing tools that provide directions directly to their door… even down a long dirt road. Many destination store locations are also property owners, not just renters. Look for properties that can be converted from residential to retail. You will save big on startup costs if your rent goes to a long term investment.
Purchase an Established Business or Start a New Art Gallery? Many baby boomer business owners are looking to sell their businesses in the near future. Do you want to purchase a business with a slow or fast transition? How much will you pay for inventory? How much for good will? Opening a new gallery means that you have to develop a new concept and a new brand. Taking over an established business provides for a smooth transition while you learn more about the legacy customer base, and consider how you might change or add to that base of business.
Know Your Customer. Who buys art? Actually, it’s a very small fraction of the population. They are most likely college-educated adults, with a worldly point of view who have expectations their parents never had. It’s a competitive marketplace, and this customer is well prepared. They have learned a lot about design. Online access to artists, trends and value is at their fingertips.
This is the first generation to understand and demand good design. Now entering their 40’s, they are approaching the peak of their careers and earning potential. Collecting art and fine craft has become a passion which is fulfilling in ways that their jobs don’t address.
Consignment vs Purchase
While a business plan based on consignment offers an attractive cash flow perspective, most of the work that is available on consignment will turn slowly or attract only a very narrow audience. Artists that demand a purchase component, are generally sought after by more galleries than they can supply. It’s likely that the work turns fast enough to justify the upfront investment.
Destination Locations vs High Traffic
Some of the best galleries in the USA are actually located at the end of a long dirt path where working studios and an enthusiastic gallery team create the feeling of unique adventure. This format really requires the retailer or dealer to have a well-thought-out online marketing plan.
Art Gallery Business Models
There are literally dozens of different types of galleries, and even more that are hybrid styles. When opening your own gallery, don’t try to be everything to everyone. Pursue what you are authentically passionate about. It’s impossible to design an art gallery for the mass-market.
Some typical models of galleries today:
1. The Legacy Gallery: Canvas & Bronze
The traditional business plan for an art gallery is oil painting and sculpture, but the back office is where all the action really happens. These galleries are not relying on walk-in traffic to cover their expenses and provide a tidy profit. They rely on strong relationships with a list of art collectors gathered over the years. Many of these collectors have never visited the gallery – they were discovered at art fairs. Running this type of business requires real diligence for gently and discreetly digging up the needs of collectors and then providing the treasure.
2. The Production Gallery: 2D Prints, 3D Fine Craft & Art Jewelry
This business model is one of the top choices for resort locations where tourists are looking for small items that can fit in a suitcase. Many galleries of this type never produce special events or solo shows. Price points can vary from $20 gifts to $20,000 sculptures and jewelry.
Art glass and jewelry are the top sellers. If you don’t want to put away jewelry each evening, or you can’t stand the idea of polishing silver or dusting glass, this isn’t the business for you. Successful galleries in this model average $600 per square foot in sales in a space of about 2,000 square feet. The owner is usually on site – not in a back office, but remaining out front and recognizable. If you love meeting new people all day long, this is the model for you.
3. Art Furnishings Gallery
You’ll need lots of space to show art furniture. These are some of the most welcoming and exciting galleries in the country. Most of the work is shown in vignettes where furniture, lighting, quilts, accessories and even contemporary paintings work together to create a living space. Many of these galleries also have separate areas for selling jewelry.
4. American Arts & Craft Era Gallery
These galleries pay homage to the turn of the century arts and craft movement and the environmentalist movement. They often specialize in unique pottery, woodturning and accessories in earth tones and spiritual appeal. They carry soft goods include handwoven scarves, wall hangings and rugs. You’ll also find lots of narrative art objects like poetic ceramic plaques here.
5. Frame Shops in Transition
Although framers have always made most of their income framing items that customers bring in, (rather than selling prints or originals) the mass influx of pre-framed wall decor from China appearing in big box stores has decimated this type of retailer. To stay afloat, frame shops expand their offering to include interior and tabletop items such as handmade raku and other ceramics, tapestries, sculpture and even sports memorabilia to cross-sell to customers.
6. Native American Art Gallery
Native art galleries are everywhere, but some specialize in authentic works and others are just gift shops selling “native style”. Ethics aside, there’s all too much competition in the “native style” sector. Focus on creating a space that exudes trust and authenticity. Good lighting, gallery object spacing and pedestals are a must.
The more authentic the gallery, the better the storytellers in the business. Share the cultural connection and you’ll find a well-educated and well-heeled customer that wants to build a long term relationship trusting YOU to bring them the best. Join the respected professional collecting and dealers associations such as the Indian Arts & Craft Association.
7. Imported Gift and Handmade Combination
Many stores carry a small selection of handmade and a large selection of imported items. Some imported lines complement handcrafted lines, others don’t. A well-established store has likely figured out how to highlight the handmade separating it from the imports.
8. Jewelry Stores
Many jewelry stores are struggling due to their narrow focus on gold and diamonds. A simple modification of the floor plan, removing some cases and creating an attractive gift or object area up front can pull a struggling store into profit. Use dramatic window displays to show off all the new product categories. And redesign those windows monthly!
Many times, artists themselves have opened retail galleries and spaces, highlighting their own work as well as that of other artists. Have you dreamed of opening your own gallery? Have you done it? Please share your experience.