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How Artists and Galleries
Can Protect Their Prices
and Markets for Their Art
There's hardly anything more dismaying for artists or galleries than finding out works of their art have been resold on secondary markets for fractions of what they originally sold for at retail. This usually happens at auctions, both online and at physical locations, but can happen on fixed-price secondary market websites as well. For those of you unfamiliar with the term "secondary market" (also known as the aftermarket or resale market), it refers to when art that was purchased new from galleries or directly from artists is put back onto the market and placed up for sale again, usually by individuals other than the artists or galleries that originally sold it. These resellers can be pretty much anyone-- private parties, galleries or dealers specializing in secondary market sales.
Back in the good old pre-Internet days when access to art prices and auction sales results was not that easy for the general public to come by, low secondary market sales didn't necessarily make much difference to an artist's retail selling prices because not that many people found out about them. But auction sales results have always been matters of public record, and these days with collectors becoming more sophisticated than ever, and price data being so readily available online to anyone who takes the time to look, weak aftermarket sales can really cramp an artist's or gallery's style.
So if you're an artist or gallery, is there any way to prevent secondary market sales from happening? Not really, but the good news is you no longer have to sit passively by and wait for them to happen either. Now both artists and galleries alike can be proactive and protect the markets for their art. This does involve a little time and possibly even occasional cash outlay, but the up front costs are well worth it in terms of benefits paid later. All you have to do is keep an eye on secondary marketplace to make sure that if any of your art comes up for sale, you're among the first to know about it rather than the last. This way, you can play an active role in determining the sale's outcome rather than have others determine it for you, but more about that later.
The main way to keep track of your art on secondary markets is to monitor upcoming sales at auctions and other resale venues, mainly by searching online. Major galleries and artists do this all the time; you might as well do it too. The sooner you get started, the better. This doesn't mean you have to contact every auction house on the planet and tell them to notify you if your art is coming up for sale. Certain websites simultaneously follow numerous auctions around the world and can do that job for you. Many even offer the option of bidding at those auctions from the comfort of your computer.
LiveAuctioneers (liveauctioneers.com), for example, is one of the best such websites. They follow over 3000 international auction houses and are especially good for keeping tabs on smaller local and regional firms. It's free to join; all have to do is sign up. Once you're signed up and signed in, go to your "dashboard" or personal account page and create what's called an "alert". You can create as many alerts as you want, but the main one you want to create is for your name (if you're an artist) or the names of artists you want to keep track of (if you're a collector or gallery). Every time a work of art comes up for sale at an auction followed by LiveAuctioneers that matches one of your alerts, you'll be automatically notified by email. It's just that easy. Then you can take a look the art, the auction, and decide what if anything you want to do about it.
Many auction houses, both online and at physical locations, also offer their own complimentary "alert" services on their websites to anyone interested. If their sales are not followed by larger multi-auction websites, you can register with them individually. Again, all you usually have to do is create an account and then follow instructions to create specific wants, searches or alerts. You'll be notified whenever any of your alerts are matched.
Other auction sites worth creating accounts and alerts on are eBay, ArtPrice.com and Invaluable, and large multi-dealer antiques/collectibles/art fixed-price resale sites like 1stdibs (1stdibs.com) and Ruby Lane (rubylane.com). The reason you do this is you never know where your art's going to come up for sale and the more sites you cover, the better. You can create accounts on major art websites as well, like ArtNet (artnet.com) for example, but your primary concern is monitoring minor or offbeat sales where your art can possibly sneak in and be offered at embarrassingly low prices. For many better known artists, work appearing on major art sites will probably be priced closer to retail by knowledgeable sellers, so you don't necessarily have to worried about that. It's the potentially low sales you have to be on the lookout for.
Lastly, do regular Google searches just to make sure you're not missing anything. Type in whatever artist's name you're looking for in quotes, whether it's yours (if you're an artist) or artists you represent (if you're a gallery or collector), along with keywords-- either one at a time or in combinations-- like artist, auction, price, wanted, for sale, or sold, and see what kinds of results come up. You might be surprised at what you find. Many artists are, particularly those who are doing these kinds of searches for the first time.
As previously mentioned, the overwhelming advantage to knowing what's coming up for sale before it sells is you can now play an active part in the sale. For one thing, you can bid on the art yourself. If the high bid is low enough, you buy the art back. If other people are actively bidding against you, bid up to whatever minimum dollar amount you decide is the maximum you're willing to pay for it and let someone else buy it. That way, it'll sell for at least your minimum price and no less. Another option is to have other fans or followers of your art do the bidding instead-- like your galleries or representatives (if you have them), your most loyal collectors, or anyone else in your inner circle you think may be interested. Notify them of the sale and hopefully they'll be interested in acquiring the art.
Whatever the circumstance, the more the art sells for, the better your overall market looks, and that's the object of the secondary market game-- to support your art's selling prices no matter where it comes up for sale or who buys it.
If you end up buying it, mark it up to whatever the going rate is and put it back up for sale yourself. Or if you happen to get lucky and are able to buy back a piece you regretted selling in the first place, add it back to your personal collection. Think of buy-backs as investing in yourself and the future of your art because that's exactly what you'll be doing.
At times you might decide to simply pass on the art and let it sell for whatever it sells for. This is not recommended unless the art has problems or issues that make it less desirable to collectors. The important part is that no matter what option you choose, you're in control of the outcome. Again, your hope here is that the art sells for a respectable percentage of what it originally sold for at retail, and the more the better. Solid secondary market selling prices are good for all of your art, no matter where it's selling or who's selling it, both now and well into the future.
Another advantage to being on top of your resale market is being able to explain particular sales rather than be taken by surprise, and having the ammo necessary to defend the outcomes as well as the final selling prices. Perhaps the explanation will be that you were thrilled to buy it back, and are lucky hardly anyone else saw it was for sale, or recognized its significance, or whatever. Or if it sells well, you can use that sale to justify or sometimes even raise your current asking prices. Or come up with your own response; just make sure you have a response if anybody asks. Being on top of your market instills confidence in your collectors.
What you never want to do is completely ignore your secondary market or let your art sell for whatever it sells for whenever it comes up for resale, especially at auctions. To repeat-- auction sales are matters of public record and it's not hard for potential buyers to track your past sales down. The last thing you want to do is let low sales results start piling up. One or two or even a handful won't necessarily impact your art's overall desirability that much, but more than that will begin to take a toll. If you care about maintaining your retail price structure and your art's perceived value in the marketplace, you'd better pay attention and you'd better do all you can to make sure you've got a grip on how those aftermarket sales turn out.
The better known you are (if you're an artist) or the better known the artists you represent (if you're a gallery), the more weak secondary market sales can hurt a career. Potential buyers and collectors may become reluctant to buy due to worries over how much they'll lose if they ever have to resell. Low secondary market sales tend not to excite buyers. Worse yet, a weak aftermarket can adversely impact an artist's chances of getting future gallery shows or representation. Galleries hate having to explain why auction prices are so much lower than retail prices, and if that becomes an issue, they'll often avoid getting involved with the art altogether.
Regardless of what type of action you take on your aftermarket sales, at least stay on top of them. Knowing about upcoming sales ahead of time gives you a huge advantage over artists or galleries that don't. Hopefully you'll be able to protect the market for art and keep your career moving in an onward and upward direction.
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(art by Ara Peterson)