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Buying and selling in the art market

Updated: Apr 3, 2019


The art ecosystem can be an unfamiliar world to those who do not understand the history, rules, or players in the field. To get started as a collector, it is important to understand how each of these players - art professionals and institutions alike - are involved in the process of buying and selling art. Museums, curators, gallerists, dealers, consultants, and even collectors play unique roles that influence artworks’ availability, pricing, and placement. Once you understand the roles of these different art players, you will be able to navigate your way as an art collector with greater confidence.


Artworks on offer in the Primary Market can be sourced through commercial galleries, art fairs, or in some instances directly from the artist. Artworks on offer in the Secondary Market can be purchased through auction houses or in private dealings with dealers and consultants. To help you become familiar with the market, I have explained the role of galleries, art fairs, and art auctions below.


Galleries


Traditionally, galleries scout talented artists with potential and promote their works through exhibitions. Exhibitions often run from 2 weeks up to 2 months and they are planned many months in advance. It is common practice for artists to work directly with the gallery or indirectly through an independent curator to develop the exhibition theme, selection of art and layout.


Frictional, Ben Loong & Zulkifli Lee duo exhibition, Pearl Lam Galleries Singapore

Over the years, the role of galleries has widened and become more complex. A gallerist wears many hats - they support artists by promoting, dealing, and managing their career. The relationship is typically one which entails creative collaboration, encouragement and critique. Galleries usually work with a stable of artists and often in exclusive working relationships. Depending on the gallery and their respective contracts, a single gallery may represent an artist locally, regionally, or internationally. In many ways, galleries manage the art market in their region through their programs.


Ultimately, galleries have two main roles. They build the credentials of artists through exhibitions, publications, art fairs and so on. At the same time, galleries manage the availability, pricing, and placement of artworks in both private homes and public institutions.


In addition to physical gallery spaces, improved technology and the increasing use of social media has facilitated with the emergence of online galleries and exhibitions in recent years. These new trends are shaping how galleries operate and are encouraging alternative ways for collectors to view, buy and sell art.


Fairs

Unlike galleries which are permanent exhibition spaces, art fairs are generally ticketed events that occur over a limited number of days. Art fairs could be described as ‘trade shows’ for the arts, through which exhibiting artists and galleries gain great exposure. The proliferation of fairs all over the world says that fairs have been considerable forces in the context of buying and selling art. The Art Market 2018 report found that galleries attend, on average, five fairs a year and almost half of all gallery sales occur through art fairs[1].

Participating galleries pay a fee for a space at the fair where they showcase selected artists. A gallery may display a temporary solo show or group exhibition. As artworks are sold at the fair, galleries may put up new pieces by the artists. Fairs are great for galleries to explore new markets in new countries. For example, a Melbourne based gallery may exhibit in Hong Kong to expose an emerging Australian artist to international buyers.


Art021 Shanghai Contemporary Art Fair

Art fairs have evolved in recent years also - from being a place for trade, to a platform to show recent trends in art collecting, and educating buyers through art talks and curated exhibitions. Art Basel Hong Kong, for example, has a “Discoveries” section dedicated to solo projects made specifically for the fair by new talents. Art Basel in Basel, Switzerland, similarly has a “Parcours” section that commissions artists to make site-specific artworks in the city, often curated by a well-known curator.


Art fairs present the perfect opportunity to potential buyers and the public to visit several galleries at once, saving them an immense amount of time. At fairs, you can often have the chance to meet multiple gallery owners and sometimes even the artists. If you are interested in attending any art fair, you should research online for the list of exhibiting galleries and their participating artists. The fair will likely publish the list of works exhibited by the galleries online, a few weeks in advance, so that you can browse the works and contact the galleries for purchase even before the fair is open.


Auctions

Art auction houses traditionally play the role of selling ‘second-hand’ artworks - sourced from collectors or private institutions. Each sale at an auction house is generally done thematically, for example - Asian Contemporary Art, Post-War & Contemporary Art and so on. A few days prior to the auction, these auction houses will conduct exclusive viewings where people can preview the works. This is a great opportunity to see the works in person and enquire about an artwork’s provenance, history and condition.



You can find rare artworks at an auction which you may be able to get a very reasonable price, depending on the popularity of the work. To buy at an auction, you or your representative must register with the respective auction house. If you are unable to attend the auction, you may arrange for phone or written bids. Auction houses charge a buyers’ premium, which will be paid on top of the artwork price. Each artwork has a reserve price and estimate: the reserve price is the minimum amount needed for the work to be sold and the estimate is the range that the auction house predicts the work will sell for. If the reserve price is not met, the work will not be sold. Should such a situation arise, you or your consultant could approach the auction house to request for a private sale.


Collectors may choose to sell through private dealings, while others will explore auctions. Confidentially can always be maintained in either space. One of the main factors for deciding how to sell is the artworks’ popularity in the market. If the work is highly sought after, an auction may be more suitable to drive up the resale price. Alternatively, private dealings may be more suitable as they are flexible in terms of timing and the seller has more control over the future placement and ownership of the work. These decisions are best made with the assistance and knowledge of an expert in the industry. Auction house specialists, valuers, and art consultants can assist you in advising on an artwork’s value, the levels of market interest, and the most suitable avenue for buying and selling any artwork.


Now that you have a better understanding about buying and selling art, I hope you are more confident in starting your collection. Before you go wild with buying artworks, remember to find your collection focus - you can read more about building a meaningful collection through my recent article here.


Next week, I will be in Singapore to attend Singapore Art Week 2019 and the inaugural edition of S.E.A Focus . You can follow me on social media to stay updated throughout my trip.


[1] https://www.artbasel.com/news/global-art-market-reaches-usd-63-7-billion-in-2017--with-dealers-taking-the-lion-s-share

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