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Art Pricing

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 discounted “sales” do not exist, there is no reason to wait. 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.

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