Consignment

Consignment is an arrangement in which an artist places work with a gallery, dealer, or other intermediary for the purpose of sale, while retaining legal ownership of the work until it sells. The gallery acts as agent, not owner. If the work sells, the sale proceeds are split according to the agreed terms. If it doesn't sell within the consignment period, the work returns to the artist. No sale, no payment — and throughout, the work belongs to the artist.

Why Consignment Matters in a Studio Practice

Understanding what art consignment actually is — and what it isn't — changes how you read every agreement a gallery puts in front of you. You are not selling your work to the gallery. You are authorizing them to sell it on your behalf. That distinction has real legal weight: consigned work cannot be seized by the gallery's creditors if the gallery fails, provided the ownership is properly documented. Artists who don't know this lose work to insolvent galleries every year.

Consignment is also the primary commercial relationship most independent artists will have with galleries. It governs what percentage of each sale you receive, when you're paid, whether your work can be discounted without your consent, where it can be shown, how long the gallery holds it, and what happens if it's damaged. None of those questions have acceptable answers unless the agreement addresses them specifically and in writing.

How Art Consignment Works

The Basic Structure

The artist delivers work to the gallery under a consignment agreement. The gallery exhibits and attempts to sell the work at the retail price established in the agreement. When a sale occurs, the gallery retains its commission and remits the artist's share, typically within 30 days of receiving payment from the collector. If the work hasn't sold by the end of the agreed consignment period, the gallery returns it — at whose expense the agreement should specify.

The gallery is not obligated to sell. A consignment agreement grants the gallery the right to attempt a sale, not a guarantee of one. Galleries that take work on consignment are, in the clearest terms, providing a sales service. The work staying with them for six months and not selling is a legitimate outcome, not a breach.

The Split

50/50 — splitting the retail price evenly between artist and gallery — is the industry standard for primary market gallery sales. Some well-established artists negotiate 60/40 in their favor; some galleries representing mid-career work that requires significant investment in promotion and art fair placement may reasonably ask for more. Anything above 50% going to the gallery warrants scrutiny unless the gallery is demonstrably carrying significant costs on the artist's behalf.

The split is calculated on the retail price, not on a net figure after expenses. If a work is priced at $4,000 and the gallery's commission is 50%, the artist receives $2,000. Galleries that propose calculating the split on a post-tax or post-expense figure are shifting their operating costs onto the artist. Know the difference before signing.

Discounts

A gallery may offer a collector a discount to facilitate a sale — typically 10 to 15% for strong collector relationships, more at art fairs. The agreement should specify who absorbs that discount. Two options appear most commonly: the discount comes entirely out of the gallery's commission (the artist receives their full share of the retail price), or the discount is split proportionally between the gallery and the artist. The second approach is common; the first is worth negotiating for. Either is acceptable if agreed in writing. What's not acceptable is a gallery discounting 20% and simply paying the artist less with no documented authorization.

Payment Timing

Thirty days after the sale completes — meaning after the gallery receives payment from the collector — is the professional standard. Some agreements specify the 15th of the month following the month of sale, which can extend that window considerably depending on when a sale closes. Specify the payment timeline exactly in the agreement, and build in an accounting requirement: the gallery should provide a written record of each sale, the price achieved, the commission retained, and the amount remitted.

What the Consignment Agreement Must Cover

An art consignment agreement is a contract. It should be drafted or reviewed before work leaves the studio. Verbal agreements and email exchanges don't provide adequate protection when a gallery closes, a work is damaged, or a dispute over payment arises.

The agreement should specify: an itemized list of each work being consigned (title, medium, dimensions, year, retail price); the gallery's commission percentage; the consignment period with specific start and end dates; the terms of payment after a sale; who sets the retail price and whether the gallery can offer discounts independently; insurance coverage and its terms; responsibility for shipping and transit costs in both directions; what happens to unsold work at the end of the period; and confirmation that title to the work remains with the artist until sale.

Copyright also belongs in the agreement. The gallery's right to photograph and reproduce work for promotional purposes is reasonable to grant; the terms under which those images can be used, for how long, and in what contexts should be stated. Copyright in the work itself remains with the artist.

Insurance: The Nail-to-Nail Standard

The gallery's insurance should cover the work from the moment it leaves the artist's studio until it either sells or is returned — a standard sometimes called "nail-to-nail" coverage. It should cover the work's full retail value, not its wholesale value or some internally determined figure. The gallery should carry the deductible on any claim. If a gallery cannot demonstrate insurance coverage at full retail value, the artist either needs to insure the work independently or reconsider the arrangement.

A critical clause to verify: in the event of loss or damage, does the agreement require the gallery to compensate the artist based on the retail price or the artist's share only? Some agreements quietly limit the gallery's liability to its own exposure. That leaves the artist absorbing the loss on their own work.

Protecting Against Gallery Insolvency

Work on consignment is the artist's property — not inventory that a gallery's creditors can claim. That protection exists under general commercial law and, in many US states, under specific consignment protection statutes that explicitly shield consigned artwork from a gallery's creditors. The protection is not automatic in every jurisdiction, and it is only as strong as the documentation behind it.

To strengthen that protection, artists can file a UCC-1 financing statement — a public notice of ownership interest in specific personal property — with the appropriate state office. This formally perfects the artist's security interest in the work and gives legal notice to any creditor that the work is not gallery property. Not every artist needs to do this for every consignment, but for significant works placed with a gallery whose financial stability is uncertain, it's a step worth taking. An art attorney can advise on whether and how to file for a given situation.

Common Variations in Consignment Arrangements

One-Off vs. Ongoing Representation

A single-show consignment places specific works with a gallery for one exhibition or a defined period, after which all unsold work is returned and the relationship concludes. Ongoing representation typically involves a standing consignment arrangement — the gallery holds an agreed number of works indefinitely, with the inventory rotating as pieces sell and new work enters. Both are legitimate; the agreement structure differs. For ongoing arrangements, specify how often the inventory list is updated, who initiates rotation, and how quickly the gallery must respond to a request to remove a work.

Exclusivity

Consignment agreements sometimes include exclusivity clauses that restrict the artist from selling or exhibiting through other galleries in a defined geographic area during the consignment period. The geographic scope matters: a regional exclusivity clause that covers a metropolitan area where the gallery actively operates is reasonable. One that covers an entire country while the gallery is showing work in one city is not. Exclusivity should reflect the gallery's genuine ability to serve collectors in the area it claims.

Studio sales — works sold directly from the artist's studio to collectors who did not encounter the work through the gallery — are a common point of conflict. The agreement should state explicitly whether such sales require the gallery to receive a commission or not, and if so, under what conditions.

Auction House Consignment

Secondary market consignment through auction houses operates differently from primary gallery consignment. The auction house charges a seller's fee — typically a percentage of the hammer price — rather than receiving a fixed commission split. Seller's fees, buyer's premiums, marketing charges, and minimum reserve requirements all require separate negotiation. Auction consignment contracts are not the same document as gallery consignment agreements, and the rights and protections they provide differ significantly.

Common Mistakes

Sending work to a gallery without a signed agreement is the most consequential error. The relationship may feel cordial and established — it doesn't matter. Without a written agreement, you have no enforceable terms on payment timing, insurance coverage, discount authorization, or return of unsold work.

Agreeing verbally to a price change or discount without putting it in writing. Verbal modifications to written agreements are difficult to prove and easy to dispute. If a collector wants a discount that falls outside the agreement's terms, document the decision before the sale closes.

Not specifying what happens to unsold work at the end of the consignment period. Work that isn't addressed in the agreement tends to stay at the gallery indefinitely. Include a specific return date and a provision for what happens if the gallery fails to return work within a stated timeframe.

Failing to document the condition of work before it leaves the studio. A condition report — ideally signed by both parties — establishes the state of the work at the time of delivery. Without it, disputes over damage are unresolvable.

Assuming the gallery's insurance is adequate without confirming it. Ask for the gallery's certificate of insurance. Verify that it covers your work at full retail value and that consigned artwork is explicitly included in the policy.