Retail Gallery Prices May be More Than Art is Worth

Q: I bought two paintings at a small local auction by an artist who is still alive, but quite old and not painting anymore. A couple of galleries in a large nearby city sell paintings like mine for between $2000 and $2500. Since I didn't pay much for mine, I figured I'd sell them to one of the galleries for a quick profit. I called both dealers, but neither wanted them-- they both said they had plenty of paintings by the artist in stock already. They wouldn't even buy them for $250 each!! One dealer told me he would to take them on consignment, but that was it. How can a gallery sell art for several thousand dollars and not even want to pay a couple of hundred dollars to buy pieces back?

A: When an artist's retail prices are high like this, but his wholesale or secondary market prices are low, you can bet that the supply of work by the artist on the market at any given time is far greater than the demand, and that his art sells slowly when it does sell. If an artist has any secondary market whatsoever, dealers tend to buy back the art for reasonable percentages of retail if only to keep it off the market, prevent prices from falling, and protect the artist's retail price structure. In the case of your artist, the dealers don't seem to care one way or the other how much his paintings sell for outside their galleries-- not a good sign.

If you give your paintings to the gallery that offered to take them on consignment, that probably won't help either (it'll certainly help the gallery, though, by taking them off the market). Since the gallery already has plenty of paintings for sale, they're going to feature the ones they make the most money on first (like those they own outright), and save the ones they make the least money on (like yours) for later. At best, your paintings will be only two of probably at least several dozen pieces that any prospective buyer will be able to choose from. With those odds they could take years to sell.

Your best bet is to try selling them yourself, perhaps at a local auction, or consigned to an antique or collectibles shop or mall in your area. This way, you can price them well below what the galleries charge and use those high gallery prices as evidence of how much money someone can save by buying your paintings instead. If the artist has reasonably good name recognition outside of the area where you live, you might also consider selling them at a larger regional auction house or at an online auction. Whatever you do, keep your selling prices as low as possible.

In the art business, the younger and/or less experienced artists are, the weaker their secondary markets tend to be. Artists like this simply haven't been around long enough to develop substantial followings, or for people who've bought their art to be putting it back up for sale, thereby initiating secondary market transactions. Better known artists can also have depressed secondary markets when the market is flooded with their art and not that many people are interested in buying it-- such as appears to be the case with your artist.

The general lesson to be learned here is that retail art gallery prices are not necessarily indications what art is worth on the open market. Galleries can price their art however they wish, and are under no obligation to price it according to what it may or may not be worth on secondary markets. If a dealer feels like marking a work of art up ten or twenty times over its secondary market value, that's his or her prerogative. This is why you should always have some idea of what art sells for on secondary markets before paying retail at galleries or, as in your case, buying "cheaply" outside of the galleries only to find out later that you didn't get the great deal you thought you were getting.