You will find since the broad secondary art market includes costly work by contemporary masters to relatively inexpensive four-color offset lithographs, the terminology is used differently depending on circumstances.
To address what constitutes the secondary fine art market, you must first know what makes the primary art market. The answer, as with many things in the broad art market, is complicated. Since the overall secondary art market includes high-priced work by contemporary masters to relatively inexpensive four-color offset lithographs, you will find the terminology is used differently depending on circumstances.
The essence of a primary sale is the first transaction where art is sold, in most cases. However, complexities arise when you study the distribution chain.
It is simple when an artist and collector make a deal. The situation is less clear when an artist makes a wholesale sale to a gallery that then offers the work at full retail. In this instance, the retail transaction made by the gallery is considered the primary market transaction. Of course, there are other methods of the first sale to consider.
Defining a secondary market sale
A secondary market sale occurs when the original buyer decides to put the work for sale a second time. Whereas collectors most often initiate selling the artwork, there are cases when a gallery will put pieces directly into the secondary market. This situation is usually not good because it means the gallery has too much inventory and too little demand for the work. No gallery will sell through the secondary market when it has buyers for pieces in the primary market.
The secondary art market venues range from the toniest auction houses and private dealers to established brokers and galleries down to eBay. In November 2009, The Economist ran a piece titled “New or Secondhand?” that accurately depicted the upper end of the market. The information and concepts in the article do not apply to most readers here. Alan Bamberger has a helpful illustrative article, “Retail Gallery Prices May be More Than Art is Worth,” on his ArtBusiness.com Website.
The art print market is divided.
For our purposes, we are here to discuss the secondary art market as it pertains to the art print market that includes selling reproductions as prints. In the art business, there is a bifurcation in the print market. There are those fine art prints made in a time-honored fashion that is limited by the nature of their creation. These would include etchings, woodcuts, aquatints, engravings, serigraphs, stone lithographs, and so forth. See Wikipedia for more details: http://en.wikipedia.org/wiki/Printmaking.
The other component of the print market primarily consists of reproductions of original art. Some would call this the decorative art market, while others reserve that term for the open edition and poster market. How you describe it has much to do with what end of the market you derive your income as anything.
If you are an artist, dealer, or collector involved with etchings, your view of a giclée is likely to be a decorative reproduction. On the other hand, you may disagree with calling your work decorative art if you make your living selling giclees or some other form of fine art reproductions. Unfortunately, you can only control how you market your work.
Different processes create different perspectives.
Suppose you study the work and promotional information offered over the years by artists and galleries at ArtExpo New York. In that case, I doubt you would find one exhibitor characterizing their work as decorative art – especially those who sell limited editions. It is entirely natural they would use descriptions designed to help sell their work.
The International Fine Print Dealers Association (IFPDA) also holds an annual show in Manhattan. You will find this small but significant group of dealers generally eschews representing much of the work found at shows such as ArtExpo New York. As Kathryn Markel does on her Website, most will contend that the work found there is “wall decor.”
While not stating wall decor is necessarily a bad thing, dealers, such as Kathryn Markel, would not encourage buyers to participate in paying the set prices for much of the higher-priced work at ArtExpo. Their reasons are the works primarily are reproductions and that much of it these days is digital art. And, there you have the bifurcation in the art print market.
The diminishing secondary art market.
There is an active market for many artists whose work is found at shows such as ArtExpo New York when it comes to the secondary market. You will also find many other artists whose work has transcended the “wall decor” mentality. In other words, it is a mixed bag.
Arguably, the best example of a secondary market player is Art Brokerage. It carries a vast selection of work from a wide range of artists, including many ArtExpo exhibitors over the years and many others who have never set foot inside it.
There is an implication that art reaching the secondary market will have appreciated, having become more collectible along the way. For some artists, this is accurate, but for the few who enjoy seeing their art selling well above initial prices, finding an active secondary market for most is not a reality, especially in their lifetime. It is one of the reasons I have argued for not having limited editions of fine art digital reproductions.
There is a bit of a problem here.
In today’s market, if an artist is productive and continues to put new editions in the marketplace, it tends to lower the resale of earlier pieces. Although in the boom years of limited editions prints, this dynamic was not always the case and is not now for select artists. Suppose artists combat lowered prices on the secondary market with smaller editions, say 200 or less. In that case, they cap their income for that work and need to either generate higher and higher prices for their new artwork or put more editions in the pipeline to maintain a steady income; both actions have consequences.
Should artists be paid a resale royalty?
When it comes to the secondary market, artists do not participate in inflated prices. Only California has droit de suite laws where artists have legally ensured a cut of the proceeds when resold in the state. The legislation is known as the California Resale Royalty Act. This type of law is more common in European Union countries. I doubt they will ever move beyond the borders of California.
Until the past few years, you could go to the back of Art Business News or Art World News and find several pages of small ads from dealers in the secondary art market. In a very telling sign of the times, those publications are today much smaller in overall ad pages, and secondary market ads have nearly vanished. Coincidentally, in another meaningful sign, if you research art prints, mainly giclée prints on the sites of secondary market art brokers, you will find many pieces being offered well below their original price.
In the art business, more than the secondary market is hurting.
Another factor in the market that has diminished with trade magazine ad pages is secondary art market Websites offering works while having very little inventory. Attorney, Joshua Kaufman, a longtime columnist for Art Business News, wrote, “The Online Secondary Market: Resource or Parasite?” It is an informative piece detailing the business methods of some rogue operators that were harming the marketplace. It also warned that much of the way they were operating was illegal.
While we like to think it was the industry policing itself that drove many shady characters out of the market, it eroded market and economic conditions that took away their incentive. The industry remains to see whether the market will return to a point where artists using the giclée medium will see an active market with rising prices for their work on the secondary market.
Where is the print market headed?
I estimate it will be challenging for the market to bring us back to the old days of a booming profitable secondary art market for several reasons. First, most artists working in multiple these days are using the giclée or digital printing format. I do not believe the public clamors for limited edition giclées. I think it would rather pay a little less and get to enjoy the art as an open edition. This evidence supports the notion that some longtime publishers in the giclée market are moving away from creating limited editions in this market. Lastly, once there is a widespread established pattern of digital prints not increasing in value, it will be tough to reverse such a trend.
Selling fine art may be a market with a beautiful creative product, but it is also a business that follows trends. If the movement grows stronger to open editions, it will depress the secondary market for fine art print reproductions. That is not all bad. I think it will force selling art for its enjoyment rather than the implied notion it will increase in value. Buyers of giclees found before the current economic crunch they could not recover close to the sale price of prints they bought when they tried to take them back to galleries, sell them on eBay, or through an art broker. Things indeed have not improved in recent years.
How should an artist thinking about getting into the print market proceed?
I think giclees are an excellent medium to help sell more work. Rather than looking to maximize the sale of a limited edition, I suggest keeping the edition open. There is no reason you cannot number the pieces using an open numbering convention of your choosing. If the artist’s work does become collectible, then the lower numbers will likely have some higher than retail secondary market value.
For those who feel a need for limited editions, I would consider producing a small edition of 200 or less hand-embellished by the artist. If it clearly states lower-priced open edition pieces will accompany the edition, there would not be a conflict with buyers. Indeed, the late artist, Terry Redlin, was able for decades to sell both open and limited editions of the same images without creating a problem for his self-publishing company or the dealers who carried his work. I am guessing and would suggest that in such a situation, the limited edition has exclusive dimensions.