The secondary art market can be a competitive place for a private collector
When it comes time to sell a piece in your collection, you want to get top dollar for your investment. Prices vary widely across short periods of time, based on what's available and what other collectors desire.
Even more so than the primary market, prices in the secondary market are governed by supply and demand. Factors like timing of sale, convenience, region, condition, and type of art, are also important to consider before making your decision.
There isn’t one right answer that will guarantee huge returns, but where you sell your art matters.
In general, the fewer transactions that take place between you and the next owner, the better off you’ll be. That is, of course, if you know how to negotiate and take appropriate precautions to ensure payment.
If you’re going down this road, make sure to get your piece appraised and know how to read the appraisal. Depending on the value of your work, these transactions can be complex and high risk. There’s a reason auction houses and other art sales venues take a portion of a transaction. When the sale of your piece looks anything less than straightforward, consider letting a professional handle it.
If you’ve been building an online presence as an art collector, that can be an opportunity to reach a wide market and drive interest in a piece you’re selling.
Art dealers often sell in both the primary and the secondary market. An advantage of working with a dealer is that they have extensive knowledge and connections within the art world. If they don’t work specifically with your piece, chances are they’ll know someone who does.
Dealers are able to leverage their network to get high prices for fine art, especially if it fits within the interests of their clientele. It's a good idea to do some independent research to see what type of art a dealer typically works with before approaching them.
Keep in mind that they likely know the market very well and also need to turn a profit themselves, so a current independent appraisal is also a good idea in this setting.
Auction houses are one of the most common places to buy art on the secondary market. They have the potential to drive huge prices and bring experienced and well-heeled collectors together in one place.
One of the risks when selling your art at an auction is that it may not fetch the price you want. Although you can set a reserve, there’s no guarantee that a piece will sell. That being said, a bidding war on your piece can see it go for well over asking price.
Auction houses offer appraisals of art and can handle the acquisition and sale from start to finish, which means a lot less work for you.
Organizations such as museums and universities often maintain a permanent art collection and may have a staff member who oversees acquisitions. Keep in mind that people are often willing to donate art to these types of organizations, so they may not pay as high a price as more commercial options. They can, however, be a great place to sell your art where it will have a lasting educational legacy.
However, if you choose to donate to a non-profit institution, often times you will receive a significant tax deduction that could be just as financially beneficial as selling it.
Read up on what you need to know when donating your collection before jumping in with both feet.
Although galleries mostly work in the primary market, they have a stake in the secondary market as well. Galleries often maintain an inventory of pieces that are being resold, especially if they’re heavily invested in selling that specific artist. It's in their interest to control the demand of artists in their sphere of influence and avoid flooding the market. In order to keep demand high, they may be interested in acquiring a piece from your collection.
Stay involved with your local arts scene in order to know which galleries might be interested in your art. Like other established art institutions, galleries also have a network they can connect with that is typically wider than a private collector.
One thing is for sure
An organized inventory of your collection and supporting documents places you in a better position when you're ready to prepare your art for sale. If you're not working with an inventory system yet, Artwork Archive offers comprehensive services that help protect your investment from when you purchase it to the eventual sale or transfer of ownership.
Sign up for a free 14-day trial with Artwork Archive's inventory system, finish your paperwork, and download more artful insights in our e-book, Essential Guide to Collecting Art.