Dealer Discounts

Daniel Grant has an interesting article in the Huffington Post about dealer discounts.  This article should be of interest to both dealers and appraisers in keeping up with current pricing trends.  The article states most dealers/gallerists have not reduced their prices (although some have), but have increased the level of discounts.  In the past a 5%-10% discount off of the listed prices was a good rule of thumb.  Now, it is not unusual to see 20%, or even higher.

This is something appraisers should be aware of and keep in mind when using retail dealer pricing.

Grant reports

Technically, most art dealers are not lowering their prices ("that's bargain-basement mentality," Manhattan art dealer June Kelly said); rather, they are increasing their level of discounts. ("If someone rally wants a piece is ready to write a check," Kelly stated, "I'll try to satisfy them by taking a little extra off.") A number of galleries have long been willing to drop prices 10 or 15 percent when a collector purchases more than one item at a time, and San Francisco's ArtZone 461 Gallery, which started to accept credit cards within the past year, recently began offering an additional five percent discount for those paying in cash. Even so, some gallery owners speak openly of cutting prices. Rolland Augustine, co-owner of New York's Luhring Augustine gallery and the president of the Art Dealers Association of America, said that "I've told my colleagues that lowering prices is a perfectly acceptable thing to do. Look, I have 18 people here working for me and 15 artists that the gallery represents, so I need to perpetuate cash flow for all of them to get paid."
In whatever form it takes, dropping the actual price a buyer pays has the potential of raising tensions between dealers and collectors and between dealers and the artists who have consigned their work to the gallery. Augustine claimed that his 15 artists are "extremely flexible" with regard to prices, while Gray stated that "different artists respond differently." Some artists that the Richard Gray gallery represents are resistant to lowering their prices and prefer to hold onto their work, awaiting an economic recovery, while others more eager to make price adjustments in order to generate sales. Robert Fishko, director of New York's Forum Gallery, said that a number of his "artists have contacted me to ask what they can do to support the gallery," reflecting a willingness to take less than they might have a year earlier.

To read the full Huffington Post article, click HERE.

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