|It is an established rule of commerce that
old inventory inevitably gets discounted
or marked down to hasten its sale. Art galleries
operate differently. Their old, unsold works
sitting in storage instead are likely to
be marked up as time goes on. There are several
reasons for this: |
- First, a policy of raising prices and never
reducing them helps reinforce expectations
among customers that art always appreciates
in value and hence is a good investment.
- Second, this policy encourages indecisive
customers to buy now. Since
do not exist, there is no reason
Instead, waiting can result
in paying more.
- Third, if the work is by a living artist,
the gallery probably has no
money tied up
in inventory. Galleries take
art on consignment,
paying the artist only after
a sale is made.
- Fourth, galleries are patient businesses
with long sales cycles. It is a part of their
culture to wait to get their price. Even
artists who sell through their own studios
can be just as patient.
Some artists may offer their works through
two or more galleries. These galleries may
be in different regions of the country and/or
near areas where the artist spends significant
amounts of time painting each year. When
an artist has multiple galleries acting as
his or her selling agents, works that fail
to sell in one venue may be transferred to
another. Odds are, however, that the price
will be unchanged.
As a general rule, for-profit galleries keep
50% of the sales price. Even if the artist
also sells either directly or through a nonprofit
gallery that takes a much smaller slice of
the sales price, expect to pay the same for
a given work wherever you find it. You probably
will not see a price reduction if the artist
shifts a work between sales channels.