BlogJanuary 21, 2017

Straight Talk: Commissions and the Financial Efficiency of Alan Klinkhoff Gallery

This is straight talk about commissions. Merriam-Webster dictionary defines a commission as “a fee paid to an agent or employee for transacting a piece of business or performing a service; especially: a percentage of the money received from a total paid to the agent responsible for the business”. If you recognized a trustworthy option for the same total sale value and the total commission is 8% ( = private treaty sale with Alan Klinkhoff Gallery)? If you give Alan Klinkhoff Gallery for sale on a consignment basis a painting that we sell and invoice for a total amount of $5,000,000 plus taxes, upon sale and settlement we’ll remit to you payment of more than $4,600,000. A national auctioneer recently advertising fees implied that invoicing a total amount of $5,000,000 the consignor should expect to receive approximately $4,200,000 and conceivably less according to standard terms of sale.

Example:

 

 

Invoice Total

Seller Receives

Commission

Auction House

$5,000,000

$4,200,000

$800,000

Alan Klinkhoff Gallery

$5,000,000

$4,600,000

$400,000

    Alan Klinkhoff Gallery Efficiency

$400,000

 

 

The seller is clearly better served receiving $400,000 more from Alan Klinkhoff Gallery. How is the buyer better served from Alan Klinkhoff Gallery?

Financial efficiency is the answer.
Looking at the example above, the buyer has $400,000 greater “value”. He is purchasing a work of art that he has reason to believe, exclusive of sales taxes, has a residual value of 92% of his purchase price as opposed to 80%, or even less, if acquired under standard terms at auction. For both the buyer and seller of high value art work, or quite frankly many “goods”, the favoured venue is the trustworthy one which is also the most financially efficient.

Alan Klinkhoff Gallery offers efficiency, that is value, and the quality one traditionally expects from the Klinkhoff vetted selection of artwork.

 

Owners of extremely valuable fine art take note, we recently sold a work of even greater value and at a total commission/fees of less than 5%. Admittedly these mega dollar sales are neither commonplace in private treaty galleries like Alan Klinkhoff Gallery nor at auction. We speculate that at levels of $25,000, $50,000 and even $500,000 the financial efficiency for both seller and buyer is consistently greater with a private treaty sale agreement with Alan Klinkhoff Gallery compared to the auction alternative. Alan Klinkhoff Gallery is in preparation of a highly important exhibition and sale on April 1 celebrating Canada’s 150th.

 

Craig, Jonathan and Alan Klinkhoff invite sellers of important Canadian art for a confidential consultation.  
Click here to read more.  

 

*Example used for illustration purposes only.

 

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