Category: Art Marketing

The Artist as Market Maker - Damien Hirst

8/12/2017

I've always maintained that Damien Hirst's real talent lay in marketing and selling. For me he is a classic example of an artist whose ability to work out how to market his art - and to manipulate the art market for his benefit - considerably outweighed his talent as an artist.

RECOMMENDED READ:
The False Narrative of Damien Hirst's Rise and Fall
by Felix Salmon in the New Yorker (6th December 2017)

This article is a "must read" because it highlights how Hirst has fundamentally challenged the notion of:

how art is sold
the role of the art gallery
the relationship between artist, art gallery and art collector
how much the artist gets when his or her art is sold to a collector

With the 2008 auction, Hirst moved out of the world of commodities, which are bought and sold speculatively with a profit motive, and moved into the world of luxury goods, which are bought to be consumed and enjoyed. Which is exactly what art should be!

It also focuses on the fact that by moving art sales to "direct sales" between artist and art collector, a considerable amount of art market data has moved out of the reach of those who purport to know about 'value'. All they know about now is the amounts which are in the public domain because of art sold at auction. That's not always where the important sales are done any more.

After (his 2008 auction sale) Hirst started selling his work directly to collectors, at scale, and stopped playing by the established gallery-system rules. Hirst’s galleries were furious, but there was nothing they could do about it. Freed from gallery constraints, Hirst could make the work he wanted to make, and sell it at whatever price his collectors were willing to pay.

Hirst is obviously an artist operating at the very high end of the market. He's ripped up the rule book and started to reinvent the art market.

After partnering with an auction house in 2008 to create a gigantic sale of his work, in 2017 he partnered with a Francois Pinault (the French luxury goods billionaire) and took over two museums to create an enormous thematic show and made the Venice Biennale an explicit commercial venue for buying art.

Hirst says that sales from his latest show, in Venice, reached a jaw-dropping three hundred and thirty million dollars as of early November.

One has to ask to what extent artists operating further down the food chain can do the same thing:

make what they want,
sell it where they want - and
dictate their own prices?

To my mind it's perfectly possible - but only if artists hone their marketing and selling skills as well as those related to creating art and partner with the right people and platforms.

We've already seen it to some extent with the achievements of those who have created a credible art business by selling direct to collectors online.

Now we need to see whether artists start partnering with venues to sell their art in new ways - just like Damien Hirst...

Like I said - it's a recommended read for those who acknowledge that marketing has a lot to do with how value is created in the art market.

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Want to set up an online art gallery with ecommerce?

28/4/2017

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I got an email this morning asking questions about the tax aspects of setting up an online art gallery and ecommerce which involved artists and paying customers who might be located anywhere in the world

Below you can read:

the email I got and the "short sharp" response I sent below.
a checklist for anybody thinking about setting up an ecommerce facility to sell art

What are the tax implications of selling art online?

This is the email. I've numbered the questions to make them more accessible online in a blog post

Dear Katherine,

Firstly, I owe you my sincerest gratitude for all the information you have presented on this website. It has answered many questions I had and for that I am grateful.

I am on the verge of launching an e-commerce online gallery and I was hoping you could answer a few questions for me. This my first time dealing with anything to do with e-commerce and selling online so there is still a lot I don’t understand.

1) Some of the artists who I represent do not reside within the UK or the EU, and there is no guarantee that any paying customer would reside within the UK or EU either. How would this affect me regarding tax?

2) When this business takes off, I plan on becoming location independent. How will this affect my tax status as I won’t be living within the UK but my business will be registered in Britain?

3) How would it work when it comes to putting an address on my invoice if I’m only in the same location for a limited amount of time?

Thank you again,
Kind regards,

Mr Gallery Man ( a pseudonym)

It generated a very "to the point" response from me!

Dear Mr Gallery Man

If you are setting up a business you need professional (i.e. paid) tax advice from an expert to make sure that:
- you are aware of all your legal responsibilities tax wise
- where you live and where you operate are tax efficient given who you expect your customers to be
- you get to keep your house because the tax man doesn't come looking for the tax that you have avoided - with penalties and a possible prison sentence
This is serious. You need proper advice. That's not going to come from me.

The next point I'd make is that I have seen any number of people have the bright idea of setting up an online art gallery operating through ecommerce in the last 10 years. I'd say round about 95-99% of them no longer exist.

I think you need to do more research about the marketplace and what sort of investment you need to make in time and effort - and contacts / social media following - to make it work.

My one piece of advice for you is if you have never run a business before and if you have never been involved in the art market before, run away fast before you waste an awful lot of money for no return.

Regards

CHECKLIST:
How not to get stung when setting up ecommerce!

Do thorough research first. You should never be starting any business where you don't fully understand the full implications. Those that do go out of business very fast. How anybody could be contemplating starting an ecommerce business without what understanding what they are getting into is beyond me!
Get professional tax advice if you plan to set up a business. You're an amateur. You haven't got a clue what you don't know about tax. Tax experts exist for a reason. Paying for tax advice is a legitimate business expense which is deductible against tax - so long and only if it is related to the business and not your personal income. If you can't afford the tax advice you definitely can't afford to set up in business involving ecommerce.
Understand the competition - you need to research and understand the business model adopted by your competitors. Those who are still in business after few years either know what they're doing, have good advisers, are prepared to keep going even if they're not making much money - and/ir the tax man has not yet caught up with them. Take a look at how where they are located and how they deal with local taxes on transactions for people living in different countries. Don't assume that what they are doing is correct, however it gives you a basis for an intelligent discussion with a tax expert!
There is no escaping tax liability - make sure you don't get landed with an enormous tax bill! - Governments have woken up to the fact that they are losing out massively on tax revenues through the amount of business which is now transacted online. Tax authorities are now paying a lot more attention to online businesses. You should assume that anything you are doing which evades payment of tax (whether deliberate or inadvertent) will result in a tax bill plus penalties plus a possible prison sentence. They are getting very serious about this.
Understand the differences in tax treatment of private sales vs sales via art dealers and galleries. What quite a few people don't understand is that private sales - between an sole trader artist and a paying customer are very different from sales via third parties. There's also a difference between a third party which hosts a site that enables artists to make contact with paying customers and those where the artist is represented by a gallery and sells art via the dealer/gallery online. The differences largely relate to thresholds for payments of additional taxes; liability for additional taxes unrelated to thresholds and whether they way the ecommerce is configured is deemed to be an evasion of tax.
Understand why Tax gets much more complicated when transactions are online. You have to make sure you observe the tax regime for where you live, where your business is located - and also where your paying customer lives. For example, with respect to the pursuit of lost income from tax on online transactions for digital services, the EU changed the treatment for all digital transactions in 2015. Now VAT is payable based on the place where the customer lives NOT where the artist or the business is located - and there is no minimum threshold for registration in another country (a total nightmare!). They're also not at all keen on people trying to get round this by saying they won't do business with anybody outside the country where they live - and were threatening penalties for this last time I read up on this!

EU VAT rule change
From 1 January 2015, the rules around the European Union (EU) VAT place of supply of services will change. This will affect the sales of digital services (broadcasting, telecommunications and e-services) from a business to a consumer (private individuals and non-business entities for example, public authorities or charitable bodies). The place of taxation will be determined by the location of the consumer.
VAT: businesses supplying digital services to private consumers

Bottom line, if you are

operating as a sole trader as an artist or art tutor involving ecommerce
or you are hosting an online gallery with ecommerce facilities for selling art for artists you represent and/or other artists,

you need to be very careful that you have sought professional advice and checked out all relevant tax aspects for your particular set-up - which you have explained very clearly to your tax adviser. (NB Only telling them what you think is relevant isn't a helpful approach since you don't know what you don' know!)

Just because somebody says they operate in a particular way doesn't make that right or legal - unless they can produce the letter from their tax advisors explaining what they can and cannot do!

BTW I'm NOT a professional tax expert. You should make sure you also read the note below about what this site does not do.

You can learn a lot from authoritative tax sites online - but they don't have all the answers!

More information about tax and vat for artists

You can read more information on this website on the following pages in the Money and Tax section

Tax Tips for Artists
VAT for Artists

The information I collect, collate and organise on this website largely relates to information accessible to anybody from authoritative sites - either formal government tax authorities or professional tax advisers. Plus some common sense advice from me about how to organise your tax affairs.

What this site does not do

This site does NOT provide:

Definitive answers on all matters relating to tax records for where you live.
"Professional advice" available from somebody with a tax qualification and current expertise of tax affairs anywhere in the world.

I recommend that you pay a professional for tax advice IF:

your tax affairs are complicated
you have a specific tax query which you can't find an answer to from official information available online.

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Don't be conned by SEO companies!

3/2/2017

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I regularly get approaches from people representing SEO companies who promise that they can help improve the performance of my website.

I normally send them straight to the spam folder. However they're sneaky and use forms on your website.

This is one such - which came in via a form response on Art Business Info for Artists this morning

Name
Alan Sehwag
Email
[email protected]

Comment
Hi there,

I recently spent some time doing a site review of www.artbusinessinfo.com. (Yes, I do random site reviews for a living.)

Based on what I saw,there are a few things you could implement pretty quickly that would help boost your Google rankings, traffic, social media & conversion. I noticed, few technical errors that are effecting your website’s performance too.

We'll start counting & will keep fixing all bugs, provide you a clean safe website.We are also into website design, development and can redesign your website.

Not sure what your initiatives are in this area, but is this something that’s on your radar?

Alan.
(323) 617-3981

This is the reply I've just sent to Alan.

Dear Alan

I'm assuming this is for free and that your pricing page http://www.ngrwebteam.com/seo-pricing didn't just slip your mind - or the Federal Regulations relating to spamming people who have not given their consent to be approached? You sure you don't want me to remind you?

I also do reviews of those that say they help artists. I'll be sure to remember the name of your company.

Regards
Katherine

Katherine Tyrrell
Making A Mark on Art

Making A Mark is a top art blog - #3 in the UK and #7 in the world
c. 3.8 million+ visitors and 10.5 million+ pageviews and counting.....
Follow Making A Mark on Facebook | Twitter | YouTube | Amazon
My Book on Facebook: Katherine Tyrrell: 365 Tips for Drawing and Sketching
Website: Art Business - for Artists + Blog + Facebook Page
Website: Botanical Art & Artists + Blog + Facebook Page

If you get approaches like this:

You shouldn't be. This is spam. It also breaches the rules of marketing online.
They typically all say the same generic things irrespective of what the issues are with your website. That's because they are selling their services to make money for themselves.
They typically haven't got a clue about the target market for your website. They are selling cookie cutter solutions - not something specific to marketing art by artists.
Check the website to find the pricing page. Alan forgot to mention that help from his company STARTS at $400 per month! The more difficult it is to find the pricing the more suspicious you should get. That includes any omission to mention prices in any approach to you.

The enormous prices for services from NGR

You most certainly don't need to be spending a lot of money. Most artists simply don't need help from professional companies if they are prepared to learn the basics for themselves. It's not difficult.

Personally I'd recommend avoiding SEO companies who in my book are the equivalent of snake oil salesmen!

Try and see how far you can get on your own through studying the basics of what helps with marketing your art online. Unless you've got a BIG pot of money to sink into creating a brand and marketing it and expert who gets results for ARTISTS!

One simple way to improve your website performance

I've always found the Google Webmaster Guidelines is a good place to start because you need to ensure your website is compliant with Google if you are to get a good ranking and turn up in search enquiries.

Work your way through these before you ever contemplate looking around for more help.

What's your best tip for fellow artists?

Please share your best tip for improving the performance of your website.

Mine relates to being very careful how you title pages and construct URLs for individual pages on your website.

be aware of the keywords associated with search queries
be very accurate as to content (Google likes this!)
try not to be the same as everybody else!

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Be smart about Vanity Art Galleries

15/1/2017

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The Vanity Gallery is a new page on my website.

Take a look If you'd like to know which artists vanity galleries tend to target and how they operate.
Plus how to be smart if one of them contacts you or you need to check a gallery out.

I've extracted all the information relating to Vanity Galleries from my Alternative Options for Exhibitions page and created a page which is entirely focused on the characteristics and risks associated with Vanity Galleries.

It covers:

What is a Vanity Gallery? Plus reasons to avoid them.
What's NOT a Vanity Gallery - legitimate options where artists 'pay to display'
How to recognise a Vanity Gallery
PLUS How You can be Smart about Vanity Art Galleries - Checklists of questions to ask covering Target audience, marketing, gallery artists and exhibitions, financials and paperwork - including consignment contracts.

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Publicity for art competitions & open art exhibitions

1/10/2016

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I have a NEW page for those who want to know more about how to get publicity for:

art competitions
juried open exhibitions

It's about a Making A Mark Guide I wrote following on a from an article I wrote back in 2013. The lessons do not change with time!

This Making A Mark Guide provides a CHECKLIST of various action points - plus notes - associated with:

managing who organises the marketing
making the most of the opportunities for free publicity
obtaining, sizing and processing images for publication
information that needs to be published for artists and exhibition visitors
organising an informative press release and press preview
making the most of the presentation of prizes

As such it also covers

how best to help those who generate publicity
how being incompetent and disorganised lets down the competition, the exhibition, the sponsors, the organisation, and the artists

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Art Business Info: NEWS

The Artist as Market Maker - Damien Hirst

Want to set up an online art gallery with ecommerce?

What are the tax implications of selling art online?

CHECKLIST:
How not to get stung when setting up ecommerce!

More information about tax and vat for artists

What this site does not do

Don't be conned by SEO companies!

One simple way to improve your website performance

What's your best tip for fellow artists?

Be smart about Vanity Art Galleries

Publicity for art competitions & open art exhibitions

Art Business Info. News for Artists

Visitors so far

GET Art Business Info. NEWS by Email

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Art Business Info: NEWS

The Artist as Market Maker - Damien Hirst

Want to set up an online art gallery with ecommerce?

What are the tax implications of selling art online?​

CHECKLIST: ​How not to get stung when setting up ecommerce!​

More information about tax and vat for artists​

What this site does not do

Don't be conned by SEO companies!

One simple way to improve your website performance

What's your best tip for fellow artists?

Be smart about Vanity Art Galleries

Publicity for art competitions & open art exhibitions

Art Business Info. News for Artists

Visitors so far

GET Art Business Info. NEWS by Email

Author

Archives

Categories

What are the tax implications of selling art online?

CHECKLIST:
How not to get stung when setting up ecommerce!

More information about tax and vat for artists