“I am considering selling a piece of artwork that I purchased.
What do I need to know?“
Last month I wrote about coherent collecting, and mentioned the continual evolution of private collections. It’s fun to talk about how artwork joins a collection, but how artwork moves out of a collection is also worth addressing. Possibilities include everything from reselling, charity auction, gifting, to (yikes!) dumping. Anticipating questions about reselling, and curious myself since selling art is part of my work, I’ve looked into the topic.
Keep in mind that these thoughts are from the perspective of a living contemporary artist with a hopefully long career ahead, me. Other situations abound, and consulting with an art business professional, as I did in the early days of selling my work, is a good idea.
Bursting the Balloon – Selling Isn’t Easy
The pros will confirm: selling is work. In fact, it’s kind of a headache, and why buying art on speculation is usually unwise. I advise collectors who are approached by a potential buyer not to consider selling unless the offer is considerably more than they paid for the piece.
If you don’t have a buyer, of course there’s also the task of finding one. You can try to find a dealer to sell the work on consignment. If you want to sell it yourself, you’ll be competing with the pros (galleries, dealers, and artists) for the same audience. You’ll also have to take care of things like establishing a sale price, paying sales tax, paying applicable artist royalties, and providing buyer contact information to the artist (the artist’s legal right). Other considerations are protective packaging, delivery, repair, and cleaning.
Establishing a Price
People are often justifiably puzzled by art prices. For example, a painting can cost $5000 in a gallery, but a similar one sells for $10 on eBay. Or a painting that originally sold for $300 is worth $300,000 at auction. Why? How do you accurately price a piece of artwork?
When art is sold for the first time, that’s called the “primary market”. The “secondary market” is when art is resold. Prices are set by completely different parameters in each. The primary price is set by factors such as quality, artist’s sales track record, sales setting, content, media, size. Resale, or secondary market, prices are set by supply and demand, which is often cyclical for various artists or genres (as demonstrated on Antiques Roadshow). It usually takes many years (many resales) for an artist’s work to establish a secondary market.
For a deeper look, there’s a good blog article about how prices are set by McGowan Fine Art, a New Hampshire gallery/consultant, “ArtTip: Resale of Art”.
Remember too that the more information you can provide on the piece, the better. Provenance, the history of where the art has been and who has owned it, is important. As are any other materials such as artist’s bio, exhibit materials, or artist’s description of what inspired the piece or how it was made. Story is valuable.
Selling on consignment may be preferable to doing it yourself, though it will net you substantially less than the sale price of the artwork.
If you can find a dealer who is willing to take on the artwork you want to sell, be careful entering into a consignment contract. There are rarely guarantees. Typically you will receive 50% or less of the price paid by the buyer. That’s how it works when I sell through a gallery too, and I believe they earn every bit of their commission when they effectively promote and expose the work, and close the sale.
Another option would be to discuss consigning the piece with the artist. Considerations include demand for the work, condition, its place in the artist’s body of work, current inventory, and storage. Just as with a dealer, expect to pay the artist a significant commission for the sale, since he/she would be providing the same services as a dealer.
Art business consultant Alan Bamberger writes about the difficulties of reselling in more detail in his article “Contemporary Art is Often Difficult to Resell”.
Alternatives to Reselling
First ask yourself why the piece no longer belongs with you and you’re considering selling. Is it too large for your new condo? Have your tastes changed? Do you need money? Answering these questions will help determine the best way to pass the artwork on.
- Store It and Wait
If the piece no longer belongs in your collection, but you have access to storage, you may be wise to carefully protect it and hold on to it. Here’s another ArtBusiness.com article to consider: “Collectors Often Prefer Artists’ Earlier Works”.
- Trade It In
When the piece is just too big for a new house or apartment, and is still in great condition, talk to the artist. Many artists will consider the possibility of directly exchanging for another, smaller piece of equal or lesser value.
- Changing Hands without Money
When monetary reimbursement is not the goal, art can be given as a gift to a friend, charity auction or other charitable donation, or even returned to the artist’s collection. You should still inform the artist of transfer of ownership, with contact information, so that the provenance of the work, and future reselling, can be tracked.
Though the charity option does give you a tax write-off (which by the way, is not available to the artist), it tends to devalue the work, since the purchaser’s motive for acquiring the work is predominately based on the charity, not the artwork. So in the case of my work, I’d really like to talk with you further about your particular piece before you exercised that option.
With regard to my work at this point, the majority remains in the orginal purchasers’ collections. This is good news: they still love the work, I’m not old, have a long career ahead, and I’m definitely not dead. What it means for a seller though is that I haven’t yet got an established secondary, or “resale”, market. This makes it hard for a dealer or appraiser to easily price my work, which is why the art world uses the label “unknown artist”. So hang in there. Don’t buy on speculation. And for the record, my prices and sales keep going up.