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The stories are there to be told and retold, the art Collector who bought the work of art from the Dealer at a fraction of its resale value today. How this dealer in collaboration that collector, negotiated a good deal with the artist directly and now, not twenty years later, the work is resold at auction for twenty-, thirty-, forty- times the original purchase price.

The Middle Market As these stories, and that is mostly what they are, circulate around the middle market we have the unfortunate circumstance that now everyday buyers want assurances, guarantees, that this work, or that work, will appreciate in value on a set schedule. Now what I hear from clients is, “I know the value now, but what will it be worth in ten years?”

Where once most people bought art simply for its beauty, now people want to buy art with the intent that eventually it will become a beneficial investment. Even marginally successful artists sell their works on the premise that they too will become an investment tool for the future. I have warned art buyers to be aware of the now infamous quote that “the work will appreciate in value and you will reap the benefit of the artists dedication to his/her craft.” I decline to name the American artist who sold works to galleries around the world and formulated one gigantic game on the market. Only to have the market over saturated with his work to the extent that no one, galleries or collectors, will ever see any appreciation in value.

All the Way to the Bank When and if a dealer, gallery or agent suggests that “they know for a fact the work will appreciate in value,” what they are referring to is how they will ‘appreciate’ your check all the way to the bank. According to the London Observer: “… the perceived backlash against contemporary art with headlines of record-breaking auction prices contradicting news of disillusioned critics, over-production particularly of prints or implied prints, the collapse of the middle market, and the growing difficulties faced by younger artists and their galleries. [

Emphasis mine] All the above have contributed to a climate of widespread suspicion, bolstered [in part] by splits between big name galleries and their star artists.” In other words, an honest evaluation of the massively inflated art market, combined with the cheap, tacky, tasteless, shabby, poor quality, and little value of much of what is being sold, may be undermining the contemporary myth that we live in an artistic golden age.

The Value of an Art Dealer With the advent of the worldwide web and the sheer quantity of online art sites selling art ranging from original paintings to prints, from sculpture to assemblage. The range and availability is endless and leads one would think that the value and importance of the hands-on art dealer would be in question. With all of the news about highly successful art auctions and art fairs, one might forget that the major part of the art business is still run and operated by a handful of high profile European and American art dealers.

You might want to ridicule the thought and say that the most important part of the art sales is the artists, but you would be wrong. Many established artists try to sell their art themselves, thinking that they do not need an dealer agent, but even a few of them are coming around to realize the value of art dealers. In the art business, like in most other businesses, there are the retail markets and there are the interdealer/wholesale markets. Auctions, which, in most countries, are only a small segment of the overall art market, are part of the larger wholesale market, which also includes the interdealer market, and is, in terms of dealings, a small but important segment of that component of the art market.

Moreover, in a certain sense, retail prices, in the art business, support wholesale prices, instead of the other way around, as it is in most other markets. Initial prices that artists are asking for their works prior to their ‘discovery’ by the market as investments, are determined more by what people are ultimately willing to pay for the art, and not by what artists might attempt to price it at.

About the Author

Lawrence Klepper

Lawrence Klepper

As an artist, Gallery Management Instructor, Gallery Director, Independent Curator, and Special Exhibitions Coordinator for City art museums, college art galleries, and commercial galleries in Califor...