The Primary vs Secondary Art Market
Jul 12, 2017
The art market is split up into the primary and secondary market. If an artwork comes straight out of an artist’s studio, by way of a gallery or a contemporary art fair, it’s most likely being offered for sale for the first time. This is the primary art market when the price for the piece is also established for the first time.
Galleries and collectors invest in and drive the growth of an artist in the primary market. In most cases, the artist is alive and their work is referred to as contemporary art. Galleries sell directly for the artist and collectors will often meet the artist in person through studio visits or exhibition previews prior to purchasing.
When market demand eventually grows for an artist’s work, the value of the art will increase resulting in higher prices in the primary market.
The greater the demand, the higher the price. The secondary market usually comes when an artist is highly established and sought after.
Once a piece has been acquired on the primary market and is being resold, it’s now part of the secondary market or second-hand market. Often prices in the secondary market will be more stable then those of emerging or mid-career artists but the objective of those involved in the sale is to try and achieve the highest price possible. A collector will purchase at a higher price with hopes that they will also be able to sell the work on if needed, possibly for more money.
Auction houses such as Christie’s and Sotheby’s seldom deal in the primary market as they are around to fuel the secondary market.
As are fixed-price, buy-sell online websites such as Ebay. While traditional and online auctions sell everything from Photography to Impressionist and Modern Art, Post-war and Contemporary Art Auctions are outperforming the others.
That said, low sale results on the secondary art market can be detrimental to an artist’s career and the value of future works. With innovative online tools now available, price data is easily accessible offering greater transparency in the market. Through sites such as artnet, users can access information from 1,500+ auctions with lots from 300,000+ artists to help determine the value of an artist’s work.
When an artist is at a high point in their career as reflected in these online price reports, there is no better time to sell.
Additional to auction houses, dealers can be found operating in both the primary and secondary markets. Dealers have relationships with collectors so it only makes sense that collectors would come to them to sell works whether it be to free up wall space, bring in a fresh look or maximize their profit.
If you are interested in building your art collection, get a good perspective on both the primary and secondary market and how they operate. Attend auctions, speak to gallerists, explore art fairs and research artists. For more information on buying and selling art, access our roster of expert-led videos!