Rest In Peace… friends of mine just closed their gallery. It was a sad day watching them close the doors, return the artworks to their artists and let their creditors and landlord know that they were not going to get paid for a while.
What went wrong? I’m only guessing of course. This gallery was less than a year old, was based in a prominent art market with substantial art buying traffic.
Why did they fail? It’s never one thing, it’s always many things.
1. Unrealistic Expectations: They opened the doors thinking that their quality inventory, their contacts and location would make them successful. They had just enough capital to get them through about six months time. I think they expected too much too soon. One needs to play the what-if game when opening a new business… what if the market is off? What if it takes us 2x or 3x longer to succeed? What if the economy tanks? Etc. Bottom line: If you don’t have a banker willing to fund you for the ups and downs or if your capital is insufficient… you’re at risk.
2. Promotion: A new business is disadvantaged. The best way to overcome it is to promote like mad. You must tell the world you exist, keep telling them for about three years very consistently, and you must find unique reasons they should do business with you. What do you offer that is different? In the case of this gallery they had a USP (unique selling proposition) BUT…. they bought ads when they could afford them and therefore they were inconsistent. But ads are only part of the picture. You need openings, events, PR, mailings, emailing, etc. You have to assume a heavy presence until established.
3. Location: No amount of money can overcome a poor location. If your rent is 2x, 3x, 4x higher for a better location… probably even 10x…it’s worth it. Nothing is better than traffic and visibility. These people were off of a major street with high traffic. Maybe 1 in 50 people walking by the street glanced down and decided to make the effort to go inside.
4. Being there: If promoting… you need to be there when the phone rings. In this case I know of many days they were not open (to save money). No one was answering the phones or returning calls. The web site was not updated frequently AND they did not respond to emails generated from the web site. They did not seem to understand how important a website is in today’s world of art marketing.
5. Not using artists: They had high profile artists but I did not see the gallery leveraging the contacts of these artists to alert people of the new gallery handling their work. Use every tool you have.
6. Pricing: This may sound unnatural… I think their prices were too low. The artists were high quality but the prices were so low that I feel it sent the signal that the work was not quality. Their argument was that the work was lower priced than the rest of the market, which should give them an advantage. I think it backfired.
7. Margin: If you’ve got a lot of overhead…. lets say its $50,000 a month. You can sell 5 paintings at 10,000 or 10 at $5,000 or 20 at $2,500 or 50 at $1,000! How realistic is it to sell high volume unless you have high traffic. I’d rather have a mix but try to have at least 5 expensive paintings a month. But, that’s just me. And it depends on the market and the demographics visiting the market? It also depends on your mindset. You have to believe you can sell expensive paintings to sell them. Belief is everything.
I hate seeing good friends go out of business. These people are good folks and they worked very hard. They may have done all of these things and maybe I missed it. Sadly, I doubt it.