Profit Margin of an Art Gallery
The profit an art gallery can make is variable. Bloomberg reports that the average profit margin for this kind of business is 6.5 percent. Obviously, the amount of profit is tied to the amount of art sold and the price of that art.
Factors Affecting Gallery Profitability
Expenses such as rent, utilities, insurance, and employee salaries can have a significant impact on the profit margin of an art gallery. Keeping these expenses under control through careful budgeting and planning can improve the gallery’s profitability. The volume of sales is also a crucial factor in determining the profit margin of an art gallery.
Gallery Revenue Model
One immediate way to make your business more profitable is to negotiate a higher cut of art sales. While a 50/50 split is more of the industry norm, some argue that a 70/30 split in favor of the gallery is more equitable: after all, the gallery is typically paying for the marketing, production, transport, and insurance of the art.