Monday, June 15, 2009

The Re-Pricing Question : Part II

The collector whom I mentioned last week in the initial thread on this topic was kind enough to email me with some additional thoughts and clarifications on the topic. Please keep in mind that this is someone who has been buying art steadily for a few decades now and is unquestionably among the class of collector I would categorize as a true friend of emerging art.

In the last post I mentioned the...
collector who's been buying art for over 30 years, and seen a few cycles come and go, who said (I paraphrase) that collectors shouldn't be upset if the price of work by an artist they bought last year is lower this year. He noted, for comparison, that if the price of IBM stock was $50 last year and it's only $10 this year, there's no point in getting upset. You couldn't have bought it for less than $50 last year and you can snap it up for $10 this year. I asked this collector if he personally would be upset to learn that a comparable piece to that for which he paid a higher price just a few years ago could be had for much less now, and he said no...he would understand that that's the new price (he comes from the financial industry, though, which may give him a more objective point of view on such matters than other collectors).
Although not many join in the comment threads, I do know (because they tell me) that quite a few collectors read this blog, as has this one, who again was kind enough to email me with the following clarifications on the topic:
There were two pricing issues: reflection of the end of the art bubble and the integrity of dealer pricing.

As you know, with the recession, collectors have a lot less to spend, so how do you continue to collect? The answer is to either buy less or buy less expensively priced work (or both). This response by collectors has caused an economic dislocation for dealers with their mostly fixed overheads. This has resulted in layoffs, going green on mailers (a/k/a reducing expenses), and being much more flexible in pricing.

In the past 9 months we have been offered/accepted/asked for the few purchases we have made "discounts" ranging from 20%-45%. Many dealers just upon asking the price of a work of art immediately state that the price may be high and they have flexibility. Additionally we make our own judgments as to what the prices "should" be. At issue is what is the "real price" and how can a collector have confidence in the initial dealer pricing. Would it not be better if a dealer recognized that the world has changed and reflect this upfront rather than having the collector negotiate very hard or feel somehow they paid too much? [EW: emphasis mine.]

You should know however, we are starting to see some dealers recognize this reality. Additionally, there are some artist (very few) whose prices have held/increased as the demand still exceeds supply.
Evidence of the penultimate statement there ("we are starting to see some dealers recognize this reality") comes back in the reports from the art fairs in Basel last week. From The Art Newspaper:
With some buyers looking to haggle, dealers had to decide whether to negotiate or not. “I’m sticking to my guns,” said Steve Sacks of Bitforms Gallery, New York (G12). “People are coming here looking for a 20% to 30% discount, but I’ve already priced the works to take the economic climate into account,” he said.
And in another article on The Art Newspaper:
Zurich and London dealer Iwan Wirth of Hauser & Wirth (2.0/D1) also adjusted prices. “We don’t have 2007-2008 prices: it is a different atmosphere,” says Wirth. “The days when art was sold when it was still in packing crates in artists’ studios is over.”
As I noted in the first part of this topic, the thing I fear most for any artist who had managed to build a "market" for their work during the boom is the creeping perception among collectors that "maybe the work just wasn't that good" because they don't hear of anyone buying it anymore, when in fact the art simply stopped moving because no one trusted its prices. Despite speculation among artists that they can raise their prices and somehow fool collectors through that into thinking their work is still widely in demand, they should understand that collectors compare notes all the time. They visit each others' homes and see what they have recently acquired. They ask around and build networks so information flows back to them. In other words, they make it their business to learn what's really in demand, and so efforts to fool them can seriously backfire.

Add to that what the collector above noted (and I put in bold)...that collectors who feel they're having to work too hard to get a dealer to offer them the "right price" will simply stop trusting that dealer...and it really can end up costing the artist, the artist's dealer, and thus all the other artists in that gallery program if the perception spreads that the work there is being priced too high

When this topic comes up, someone is always insightful enough to mention that, under a certain price point, it's ridiculous to assume you should consider lowering your prices, even during a recession. I would agree with that. Because the question is one in which collectors want to know that the work is priced correctly (not that they're getting a steal, per se), work priced at the emerging art baseline (i.e., work priced at what you would expect any similar work by an unknown fine artist to be priced at) is OK to leave there IMO.

That doesn't mean it will automatically sell in a recession though. Competition for collectors' dollars is stiff. Indeed, much of the baseline-priced work that flew out the doors during the boom did so on speculation and impulse buying, both of which are casualties of the recession (and rightly so, but that's another thread...). What will sell at the emerging art baseline is only the most compelling work on the market...which means it's up to artists to keep quality high or, let's face it, to push themselves beyond what they've done so far and make their work even more amazing, and up to their dealers to do whatever it takes to get people in the door or to their booths at the fairs to see that more amazing work.

Labels: art market, recession


Anonymous Anonymous said...

I'm writing as a mid-level, mid-career artist. I've shown regularly, and my work has been selling well enough in the past dozen years that I've not had to have a "day job," just the occasional teaching or speaking job, which I consider part of my practice.

For me and artists like me, in terms of prices there's not much price to shave off. Fifty percent off $1 million is still a nice chunk of change, while that same percentage off $10,000, when it's then split between artist and dealer, is next to nothing for a month or more of worki.

I have opted to have no solo shows this year, because I cannot afford to work for Burger King wages. Strategically, I'm not sure what comes next. Smaller work? Smaller shows? Smaller venues? Larger work but fewer shows? Work on paper? Multiples? Commissions only? Retirement? I hate to bring the discussion down to nuts and bolts llike this, but there it is. Surely galleries who show artists like me are sweating over the same issues.

6/15/2009 10:58:00 AM  
Blogger N. Hyde said...

" priced at the emerging art baseline (i.e., work priced at what you would expect any similar work by an unknown fine artist to be priced at) is OK to leave there IMO."

Good news for me then. Thank you for these posts, Edward. I appreciate the wealth of knowledge and opinions expressed here.

6/15/2009 11:49:00 AM  
Blogger Edward_ said...

while that same percentage off $10,000, when it's then split between artist and dealer, is next to nothing for a month or more of work

I have conflicting responses to bear with me as I offer it all and you can choose what makes the most sense for you personally.

First, I think that you'll get unnecessarily upset if you start to think of making art as a quantifiable amount of work that should be rewarded with a reasonable hourly wage. Unlike painting a house (and you may need to lower your house painting rates to stay gainfully employed in a recession as well), your artwork isn't something anyone needs. It's a luxury item. As such, people will buy it if 1) they can afford to and 2) they simply have to have it. The first stipulation is king though, overriding the second every time.

It's better, IMO, to think of sales during a recession as long-term career building...continuing to place the work as far and wide as you can (through competitive pricing) to ensure that when the market swings up again you're still viewed as a relevant artist. I understand the impulse to feel that if it was worth $10,000 last year it should be worth $10,000 this year (you're working just as hard now as you were then)...but people in industries across the globe are taking pay cuts, when they're not being laid why is the art industry any different?

Of course, as the collector noted, there are still artists for whom demand exceeds supply and so their prices continue to climb even now...which is the essence of success here...making the most compelling work you can.

On the other hand (and in response to your second paragraph), yes, smaller work may be the way to go if you simply can't lower your prices on your usual-sized work. As the collector above noted, collectors are having to choose between buying less work or buying less expensive work right now. If they buy less work, well, then fewer artists will see any sales. If they buy less expensive work, you're smart to ensure something of yours falls into that category.

6/15/2009 12:19:00 PM  
Blogger marc said...

Thank you for your posts, Edward. i would like to hear your comments on the new Takashi Murakami sculpture, made in collaboration with Pharrell Williams. " The Simple Things". A glass-fiber, steel and acrylic head character Mr. Dob. In its mouth you find objects which are the essentials in Pharrell Williams’ EVERYDAY LIFE: A can of Pepsi, a cup cake, a sneaker and bottle of Johnsons baby lotion. These objects are encrusted with 26′000(00000000000 can control myself,some one plase call Hist..) diamonds and gems.

6/15/2009 09:55:00 PM  
Blogger zipthwung said...

The genteel way of thinking about art - as something you do for meaning, after work (If you have to) or as work (because you have to/want to) is the right livelihood (Confucius/(G/K)ung Fu Tsu) or the path of righteousness.

But I considered sellign work for the first time this year - the air seemed clearer, brighter -as if the clouds of the market had brough fresh rain, lining the hills and valleys with silver light.

I am at the end of my means - and that means selling. But what? and to Whom? I with a mere three or four paintings, none "a body of work" - and a cornucopia of oddments.

The post studio artist has no such worries - make the work on demand and on site. Bring only your shopping list aboutd your G5 jet, your your coach seat, depending.

What will my market bear? I am sellign to professionals - people who take home less than 5,000 a month before taxes - surely they can;t afford even a cut rate 10,000 painting?

Make art for the middle class! SO simple, and yet, the market is geared towards luxury, the museum ready, the history-in-the-making.

And I say unto you, look at humble Rousseau? what were his prices? Guagin? Lautrec? Van Gogh?

How did they live? Van Gogh famously lost an ear to a sword fight over an iphone, Gaughin contracted syphalus from an unhygenic call box. No, these people did not have 1000 dollar apartments on the roue morgue. they had only slabs for beds and slabs of fat and bread to eat. They lived on candy bars and cheap wine sweeetened with lead, which lead inevitably to madness. Ask Nero.

6/16/2009 09:12:00 AM  
Blogger Minnie Bhupathi said...

This comment has been removed by the author.

11/09/2009 03:27:00 PM  

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