Why Original Art Cost So Much
Jan 21, 2020
Appreciation for original art is by no means dead! In fact, awareness of its intrinsic value is growing along with sales. The internet and social media have contributed greatly to this rise. Art is more accessible than ever.
The Cost Of Materials
Artists spend a surprising amount of money on supplies: paper, canvas, wood, marble, metals, or whatever medium they work with. The cost of materials is definitely something that the artist considers when pricing art. Another factor is time. How long does it take to create a piece? One painting can take hours, days, weeks. What is the worth of an artists time? Should they make more than minimum wage? An artist with an established reputation typically makes more than someone who is just starting out. People tend to pay more for work by known artists. They pay more for known deceased artists, too – just check out some of the old masters!
Cost Of Living
The cost of making a work of art is only one factor that goes into the price of a piece. Have you ever wondered why a small painting costs more than a large one? What about the cost of living - residence, food, utilities, transportation, health care, costs related to raising a family, etc. All of these costs must figure into the price of an artwork, too, especially if they are a full-time artist. How many works of art will an artist make in a year, and how many can they sell in a year? How large are the works?
If you find a piece of art in a gallery you must add in commissions to the price of that piece: many galleries take a 50% commission - or more - to sell an artist's work. Many art fairs and fundraising events take a commission from the artist. So if you've calculated the cost so far, double it for the commission. And, consider this: the price so far is only covering an artist's costs. But a successful business needs to make a profit.
Supply And Demand
With plenty of demand for artwork, it is the supply side of the equation that often leads to outrageously expensive prices for art. Scarcity plays a huge role. Many of the most famous artists in history are no longer living. Picasso and Monet aren't producing any more art. That makes their surviving pieces extremely valuable.
But what about living artists? There are plenty of current pieces by living artists that are selling for extremely high prices. What drives up the price of these works? Supply and demand still play a role. Demand still exists and, even though the artist is still alive, he or she can only produce so much art. It often takes lots of time to produce a single piece of artwork.
Another factor that affects the price of art: its uniqueness! Even if an artist is still living, he or she is highly unlikely to create multiple copies of the same piece of artwork. To the extent that a particular piece is in high demand, there is only ONE available. This tends to drive the price up. Art professionals also play a role in pricing. Artists, dealers, gallery owners, and museum curators help to create demand for artworks by promoting artists and their works. These professionals help to determine which art is good and which artists might be the next Picasso or Van Gogh. In this way, they help to set the values of artworks expected to appreciate in value over time.
Ever wonder why is art SO expensive in galleries? The market for fine art is heavily “curated.” Galleries use their position as the pipeline of new artwork to establish a certain level of price stability in the fine art market. They want "their" artists to succeed and the price of their artwork to increase.
So in addition to introducing artists to the right people and getting them studio time, galleries refuse to drop the price of any artwork. They have their own reputation for dealing work at a certain price point; to protect the prestige of the gallery and "their" artists. They will drop an artist whose work fails to sell rather than reduce the price. So within the gallery, at least, the price of a painting never drops. Instead artists whose work doesn’t sell just fade away.
Galleries are equally worried about a piece by one of their artists quickly selling at a high price - especially it they won’t receive a commission for the sale - since any downward trend in price later on tarnishes an artist’s brand. So gallerists maintain control over prices by dealing with trusted clients who only sell through the gallery and at its prices. They do this by offering loyal collectors preferred access to their best offerings and galleries may stop selling to collectors who resell their inventory on the secondary market.
Galleries and dealers act as tastemakers, deciding which art is good and therefore expensive. The end result is to turn artists into brands, which introduces enough certainty for the market to function. Is this system rigged? One might say that.
Auction houses are a threat to this system because they weaken galleries’ control over prices and commissions. Auctions play an important role in driving up the price point for artists’ work but gallerists dislike seeing art at the whims of the market. When artwork does hit the secondary market, galleries attend the auction and, if necessary, bid on their artist’s work to make sure its price does not fall.
Although they submit artwork to the forces of supply and demand, auction houses intervene to ensure that the market is gentle. To reassure sellers, Christie’s and Sotheby’s commonly guarantee that they will not sell a work below a minimum “reserve price.” Sensitive to the brand damage caused by a painting failing to sell, when no one bids above the reserve price, auctioneers may pretend to spot a high bid in the back, slam their hammer down, and yell “Sold!”.
Another common auction house tactic is to “bid off the chandelier” by calling out a few nonexistent bids to start the bidding. Auction houses also prime markets by showcasing works of an artist up for sale at exhibits around the world - seemingly grasping the power of mere exposure. Even more deceptively, collectors can find themselves being bid up by someone who, in exchange for agreeing in advance to pay a set amount for a work, is promised a cut of anything that exceeds that price.” This inflates prices through false competition.
Original artwork doesn't have to be out-of-reach - it can be surprisingly accessible. Small studios, stores, co-op galleries, traveling art shows, local fairs and even online sites offer one-of-a-kind pieces at affordable prices. These unexpected and sometimes unconventional avenues connect emerging artists with novice collectors and casual buyers. Often artists are on site or just a phone call away. Here, the cost to buyers is also lower because there are little to no commissions involved.
A young artist often has no idea, and no training, in the business of art. Putting a price tag on the work that they have put their heart and soul into is one of the hardest things to do. Ultimately, the question becomes “how much would it take for that artist to part with it?”
The art market is the largest unregulated market in the world. There are very few rules. People can behave in extraordinary ways. You should not blame the artist! It is the gallery, promoter, critic, and buyer, all of whom are more willing to uphold these pillars of pretension so that their investments can maintain power. When the art world buys and sells paintings for extravagant amounts of money, those paintings can’t be simple. Expensive art demands justification for its price tag. This benefits artists whose work sells for hundreds of thousands or millions of dollars. But it comes at the cost of alienating the public from the art world.
So, the next time you see art and you’re interested in it, think about these aspects of the object itself, all the aspects that went into creating it. And be proud to wear your “I Buy Art” button when you do make the decision to purchase an original work of art. Your support means more to the artist than you will ever know. It builds a strong arts community, right here at home. You support a local business. And you invest in something beautiful.