I don't get no respect...
On a discussion forum today, someone posted to tell of a gallery that had sold some of his work then refused to pay him, saying they were going out of business. Lots of good suggestions were made to try to collect on the debt, including visiting the store in person. One option might be to contact a lawyer. Most of them will offer you a consult at little or no charge, and charge a hour's rate to write a letter for you. Sometimes stores seem to pay more attention if a lawyer gets into the action!
If a gallery goes bankrupt, part of the problem is that secured parties get paid before unsecured parties, and people who were owed money before you will eventually be paid before you. And if only ten cents on the dollar is recovered to pay off debt, then you will only be paid ten cents on the dollar for money owed to you. This is determined by law, not by what may or may not seem fair.
This is why it's important to listen to your gut when a store starts a habit of being late paying you. In times like these, it can be hard to determine when a otherwise responsible gallery is feeling the painful effects of the recession, or a troubled gallery is about to go under, or an unscrupulous buyer is simply jerking you around. In my humble experience, it's usually the former two, but when it's the latter, OUCH!! You can cut some slack for a usually great customer who's running a little behind. But you have to cut off a customer who starts off badly. I mean really bad. There's bad bookkeeping....and then there's really bad bookkeeping.
Play nice...or don't play at all
I've learned in my relatively short time in business that a business relationship that starts off bad--snarfy exchanges, defensiveness, late payment or wrangling about what is owed, unreasonable demands--never gets much better. Granted, there's a lot to be gained by learning to set your boundaries, establish good payment policies, setting your terms, and standing firm when someone tries to rattle your chain a bit. Some people will test you, find you can't be shaken too much, and will fall into line. But others are simply too wrapped up in their stuff to be very reasonable to deal with at all. Some accounts are worth a little bending. A good account can be worth a lot of bending. But know where your line in the sand is, and stick to it.
Also, no matter how careful we are, stuff happens. We will be taken in, we will get taken and we will lose artwork along the way. The trick is be aware and not let any single episode be the calamity that makes or breaks your business.
Lessons from "the blues"...
There's an old blues song by David Bromberg called "A Man Should Never Gamble (More Than He Can Stand to Lose)" (a hauntingly beautiful song, I might add) and it's a good rule to follow when dealing with consignment. Or in fact, any risk you take with your business. Take the risk—there is no growth without taking some risk--but be prepared to walk away if it doesn’t work out.
