In 1967 there was only Art Cologne. Widely considered the world’s first art fair, the event was launched by German dealers seeking to reinvigorate a stalling market for modern and contemporary art. Over the next 45 years, a diverse population of dealer consortiums, private companies, and individual promoters followed, mounting the hundreds of art fairs that now compete for the eyes and the wallets of the collecting public year-round.

“They are part of the business plan now,” says San Francisco dealer Anthony Meier of the fairs. Participating in any fewer than four such events a year, he says, “would be like not advertising or not having three phone lines. It’s critical to operating a business.” Preoccupied with chasing new revenue, however, galleries can sometimes miscalculate or overlook expenses that come with attending multiple art fairs each season. The increasingly event-driven marketplace has become both a professional obligation and a financial risk.

According to a 2011 study titled “The Role of Art & Antique Dealers: An Added Value,” dealers make approximately 28 percent of their total sales outside the primary country where their business is located. That figure, gathered from a survey of 45 members of CINOA, an international association of art and antiques dealers, includes sales to collectors overseas as well as participation in art fairs. But the two dozen galleries that provided detailed figures for this article painted an even more striking picture. Most reported that art fairs alone account for an average of 60 percent — and as much as 90 percent — of their total business.

Participation in art fairs doesn’t come cheap, however. A single booth at a premier event can cost more than $75,000, all of which must be paid up front. “If you have four fairs going on more or less at the same time, and each one costs between $40,000 and $50,000, you have a lot of money out there,” notes Richard Arregui, a director at Miami’s Fredric Snitzer Gallery.

Several established dealers report an annual fair budget of $300,000 to $400,000. “You could have quite a retail space for that amount of money,” says Sandra Hindman, owner of the medieval book specialist gallery Les Enluminures, which participates in TEFAF in Maastricht, Masterpiece in London, and New York’s Winter Antiques Show, among others. “The fact that dealers are shelling out so much for art fairs of course indicates that this is where they see the market going.”

Booth prices themselves can vary considerably. Fairs with convention-center-size venues, like Art Basel Miami Beach (ABMB), bill on the basis of booth size: That fair charged $590 per square meter in 2011, which comes to $48,970 for an 83-square-meter booth. Other fairs with less space offer tiered pricing: ADAA’s The Art Show, for example, which occupies the Park Avenue Armory in New York, charges $21,000 for a small booth and $26,000 for a large one.

Organizers say they consider the fair’s duration, the cost of renting the venue, and the cost of booth construction when determining what to charge dealers. “The pricing is really based on our costs, and the price of the venue is the most important factor,” says Paul Morris, former vice president of art fairs at MMPI, the real-estate consortium that oversees five art fairs including Volta in Basel and the Armory Show in Manhattan. “Surprisingly, it’s cheaper to do business in Basel, Switzerland, than in New York.”

According to longtime fair organizer Sanford Smith, production costs also play an important role; he would be able to charge 20 percent less for booths if he didn’t use union labor, he says. Still, he notes, “the union carpenters and electricians are highly skilled craftsmen” who were able to construct New York’s Pavilion of Art and Design fair in the Park Avenue Armory last year in a record 36 hours “with a quality that surpassed that of its London counterpart.”

Of course, the true cost for a gallery to exhibit at an art fair involves much more than the price of a booth. “They make you pay for everything,” complains one dealer. “If you add a light at Art Basel, they say, ‘Credit card, please.’” Most gallerists report spending an extra $10,000 at fairs like ABMB and the Armory Show to build extra walls, install proper lighting and extra outlets, and access Internet service.

Then there are the quirky or unanticipated costs. One San Francisco gallery spent $1,500 on a technology specialist to help install projectors in its booth at Frieze Art Fair in London. Renting furniture for a booth at Art Basel in Switzerland cost another American gallery $1,900 — a pittance compared with the $7,000 it spent on dining. According to several dealers, Maastricht requires first-time exhibitors to pay a $25,000 “initiation fee” to the European Fine Art Foundation, which organizes the fair. But who can say no? Notes Sperone Westwater’s David Leiber, “Financially, it is more expensive than the average visitor might imagine, but you feel very excluded if you don’t have the opportunity to participate.”