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Attorney JD Harriman is skeptical of some sales techniques in the art market.
“There is very little real information and data on pricing,” he told CNBC via video call. Galleries “rarely” display prices for art, he said.
“When (galleries) get a new artist, they don’t publish the price, they look at how much their customers will pay for it,” said Harriman, a partner at Foundation Law Group.
He told CNBC: “If an artist sells a work for $50,000 and they keep it secret, they can sell it to the next artist for a higher price, say $100,000. works for interested buyers.
Or, if a piece of art doesn’t sell, the gallery may want to discount it — but, again, this is confidential to avoid coloring the artist’s work, Harriman said.
Unlike company stock, there is no need to submit details of the art’s value or ownership. And, just like real estate, people in the industry sometimes equate the value of art with what the market is willing to pay.
CNBC contacted a dozen art galleries in New York City and an equal number in London to request price lists for their current exhibitions. (Galleries contacted do not publish prices online.) Nine New York galleries responded with price information, while London galleries did not disclose theirs.
Paul Hewitt, director general of the London Art Dealers Association, said in an email to CNBC that the organization encourages its members to display prices. “Increasing public confidence in the responsible art trade is the founding aim of the London Art Dealers Association,” he said.
As an artist, price cuts are the worst thing you can do
Gosia Lapusa Malawska
269-year-old muse curator
Harriman, who represents photographers and art consultancies, said galleries that don’t display prices may wait for market makers or reputable people to show interest in a work to keep its value high. “Collectors will also pay exorbitant prices for parts of their collections by artists they have not yet purchased in order to keep the value of their own collections high,” he said.
Collectors themselves are unlikely to publicly disclose the value of the art they own, just as they may not discuss their stock market holdings or net worth.
As with any type of market, players use strategies to maximize sales, Harriman said. “Everyone wants to make money. Is this illegal? Is this just immoral? Is this just shady? I don’t know,” he said.
“The same thing happens when you go to buy a used car (sellers urge:) ‘Last chance, you better buy today.’ “One time only. “You get this with every sale,” he said.
Why Galleries Don’t Share Prices
London gallerist Lucca Hue-Williams said one of the reasons galleries don’t publish prices is because they want to protect the artists they represent. “From an artistic perspective, the delivery of price tends to spark speculation and some frenzy,” she told CNBC by phone.
“We don’t want speculators to come in and compare prices and see how much their work will sell for,” Hugh-Williams said. Her gallery, Albion Jeune, sells work by emerging artists who may be well-known in their home country but are less well-known in the UK.
Hugh Williams aims to nurture their careers. “I really spend a lot of time getting to know the clients to make sure… that they’re going to be involved in the artist’s career for a long time, that they’re really going to value the work, and that they, for example, might come back to us and lend the work to future clients. Museum exhibition,” she said.
There is not actually a highly liquid global market, leading to the perception and reality of “black box” pricing.
Tonyjan
CEO of Qiuqiu Capital
For artists early in their careers, the decision about how to price their work is not straightforward. Artist and curator Gosia Łapsa-Malawska says new artists often ask her how much they want and may choose not to display prices during an exhibition because they prefer to negotiate. . “As an artist, lowering your prices is the worst thing you can do. I always advise emerging artists: If you start at a certain level, you can only go up,” she told CNBC by phone.
On the other hand, not displaying the price can turn off potential buyers because they may be afraid to ask how much the art costs, Lapusa-Marasca said. She is a curator at London’s The Muse gallery 269, which posts prices online.
She said psychological and emotional factors come into play when buying and selling art, such as whether a gallery chooses to hang a work in a physical gallery with a price displayed underneath it. “Sometimes, price is like a barrier,” Lapusa-Maravska said. “Well, that’s not for me. I’m not allowed to like that piece,” is how buyers feel when they see the price, she added.
a mysterious market
For Tony Tjan, an art collector and CEO of venture capital firm Cue Ball Capital, the value of art is defined in a similar way to other collectibles. “Popularity, scarcity, certification…whether it organically captures the zeitgeist” are all factors, he told CNBC by phone. Experts may be able to advise on a piece’s value, he added.
But Charlotte Black, founder of Artclear, said the cost of expertise could deter people from buying art.
“Verifiable data on art is difficult and costly to find and requires advice and assurance from experts you can trust, which makes this market quite exclusive,” she told CNBC via email.
Black hopes Artclear will bring more people into the art market, just as stock trading platforms open financial markets to retail investors. “This will bring greater confidence to the digital market and reduce the cost of fulfilling transactions,” she said.
British artist Shantell Martin is a favorite of art collector Tony Tjan, who says he enjoys getting to know artists and buying or commissioning works directly from them.
Brian Bader | Getty Images
When asked if the art market could be described as mysterious, Black said, “It’s a mystery to a lot of people – unless you’re an expert or know someone or pay someone to advise you… it’s difficult. Be sure about what you are buying, and in this case, the best advice is to only buy things you like.
Tjan, who also co-founded nail salon chain MiniLuxe, agrees. “For me at least, value should be driven by what it means to you,” he said. Is the pricing mysterious? “Yeah, yeah. I mean it’s art, right?” he said.
Tjan told CNBC in a follow-up email: “While there is more online information to aid discovery and assessment, there is not actually a highly liquid global market, which leads to perceptions of ‘black box’ pricing and Reality. “
Tjan said he prefers to buy works directly from the artist. “While I don’t mind buying at auction, it always makes more sense to develop a relationship with the artist and buy or commission work directly from them,” he said.
Make art affordable
On May 16, 2024, a visitor took photos at the Hong Kong Affordable Art Fair.
Ben Marans | Sopa Images | Light Rocket | Getty Images
Collector and industry expert Will Ramsay said prices are not always transparent because upscale parts of the art world want to create a feeling of exclusivity. “I’ve been to some high-end stores and events, but there are no obvious prices on luxury goods, whether it’s clothes, watches, wine, jewelry or cars. The art market is no exception,” he told CNBC via email.
Ramsay is the founder of the Affordable Art Fair, which started in London’s Battersea area 25 years ago and is now held in a dozen cities around the world, where prices are listed alongside the artworks. The Battersea event runs until Sunday, with prices ranging from £50 (£65) to £7,500 ($9,787).
“Our goal is to democratize and make art buying inclusive, educate people and give them the confidence to start or grow their own collection,” he said.
