Do you know exactly who is collecting art? What are their roles? How do they find the artwork they collect?
The answers to these simple questions provide insight into how the art world works—and into the journey a piece takes from the artist’s studio to the hands of a buyer.
The more you understand about the market, the better you will be at buying, selling, and collecting art.
Let’s begin with the primary market.
If you are unfamiliar, the primary art market refers to the first time an artwork is purchased. Usually, this is fresh from the studio or in a gallery for the first time. Price is determined by factors like material and labor costs, demand, prices of comparable artwork, as well as the reputation of the artist.
Some of these key players are:
Young or old, emerging or experienced, art collectors are looking to buy art to build their personal collections. They buy for a myriad of reasons, from aesthetic value to financial investment. See more discussion about who is buying art right now.
The interior design market is vast and the need for new art is endless. Many designers become repeat buyers when their style meshes well with an artist’s design aesthetic.
While less inclined to build an evocative collection purely for investment purposes, this portion of the art market still represents a significant segment of buyers. Individual sales are the new gallery representation when it comes to making or breaking an artist’s career. And, social media is making it easier and faster to connect with consumers online. Try finding consumers at art fairs, through interior designers, or using Artwork Archive's Discovery platform.
Next, let's look at the secondary art market.
On the other hand, the secondary art market focuses on reselling an artist’s work—a piece that has been purchased at least once before. Sellers will try to make a profit on the artwork, but prices can be affected by how much of the artist’s work is available and how quickly it sells. The more in demand and less attainable it is, the better.
Main players in this market are:
Auction houses accept art that they think has a good chance of selling—because they are trying to stay in business, too. Each sold piece brings them a commission.
Unless it’s a piece by a world-famous artist whose name alone beckons collectors, these sellers will review how well art has sold in previous auctions or galleries.
Artists with little auction experience may have their pieces sold for bargain prices, so auction houses can be sure to gain a profit.
Museum curators are always on the lookout for new artwork to display. Many times they are approached by the gallerists and dealers they know who have exciting possibilities. Curators must consider how critics, other curators, and museum goers will react to the pieces based on their studied knowledge of the arts. Find these players at community cultural events and speaking engagements for arts programs.
Then, there are those who play both markets.
Some main players in the collecting world have a hand in both the primary and secondary markets. They’ll buy directly from hot, emerging artists, but they don’t intend to hold onto the art for very long.
These players include:
Gallerists can display works straight out of an artist’s studio, or they can choose to bring in artwork from their own collections and other dealers. Experienced gallerists will have their own aesthetic, interests, and focus, and they’ll choose art that has a story and aesthetic that they can connect with—and sell. Then when a piece of art is sold, the gallery takes a commission on the sale.
Retailers who are involved in wholesale will buy an artwork directly from the artist (usually at half the retail value). Then, they put the piece up for sale in their own retail shop trying to make a profit. Artsy Shark’s Carolyn Edlund explains more about the process here.
Art dealers have to be on the cusp of what is exciting, new or collectible. They stay in tune with the changing trends and tastes of the art world. They buy from both markets—auction houses and artists alike. They then sell the works they acquire in their galleries or find collectors who are interested.
Last but not least, the job of an art consultant is to find the exact art their client is looking for while making sure that is also within their budget. They do so by maintaining relationships in the art world and using the discounts they receive to cover the fee for their services. Learn more about the role of an art advisor in What an Art Consultant Can Do for Your Collection.
Now that you know the main players…
Use this knowledge to your advantage. It’s clear that if you are interested in collecting art, there are many different opportunities to do so.
But, the art collecting world remains complex. While money values spike and dip, relationships with all the key players in each market will provide guidance.
Your role in all of this is keeping important contacts, schedules and paperwork organized.