Through Art Market & You, Art From Us provides you Analysis, Opinion and Factual Reports regarding the current on-goings of the Global Art Market. In this article, we explore various level of the Art Market.
Our Director Divvya Nirula presents reports from the international art market. With the view to assist our collectors, investors, and all lovers of art.
Defining the Market
As auction season approaches, a fresh generation of art collectors gear up to make their first purchase. Thus, to make it easier for our young collectors, we present a breakdown of the art world. And how it functions.
The art market is where buyers and sellers come together to trade. However, in modern times, the ‘market’ may or may not refer to a physical space. The market players remain the same while their roles may change based on the environment. Primarily, we can divide the art market into three broad categories.
The 3 Levels of the Market
The Primary Market – the primary market consists artists who sell their works directly through their studios. A work being sold for the very first time, generally by the artist herself, is said to be sold on the primary market. These works are typically by recent works by living artists. On the primary market, the artist may even choose to deal with her collectors directly, instead of through an agent or gallery.
The Secondary Market – Sales made following the initial sale of the artwork take place on the secondary art market. These works are not being sold directly out of the artist’s studio. They are merely changing hands and being placed into new collections. Such sales may either take place between two individual collectors, or between gallery and collector etc. Ideally, the price/ value of the work should have increased by the time it reaches the secondary market. This would signify an upward trajectory for the artist’s market.
The Tertiary Market – The tertiary market refers to sales made through auction. Such transactions involve an auction (agent), a seller (client) and a buyer. Auction houses charge a fee for selling the work, which may be charged either to the buyer or the seller, based on pre-determined terms and conditions. Further, the auction house values the work and sets a base price range (reserve price), which is the minimum price at which the seller is willing to sell the work.
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