Artwork can be reasonably cheap to some, but is art with a price tag of seemingly endless zeros really worth it?
Art pricing is, reportedly, affected by the time dedicated to creating the piece. But the biggest factor in the price of art is rarely about the quality or effort. It can be as simple as branding. To compare, most consumers gladly put in a few more dollars for a brand of hair product, that has maintained its brand identity, than a cheaper generic version. Hence, no reputation equals no branding.
That’s where art dealers play a role. They promote, educate and assist artists to gain respected status and eventually fame and success. The backing of an industry giant like Charles Saatchi or Larry Gagosian can yield the most expensive paintings almost instantaneously.
How does pricing work?
When you’re perusing through an art gallery, with or without the intention of purchasing, perhaps you question: Why do people buy art pieces in spite of the hefty price tag?
Let’s be real. There is almost nothing in this world today that is priced at its intrinsic value. The high-end shampoo you paid 10 dollars extra for probably has the same formula as that drugstore brand one.
Pricing is based on supply and demand, meaning current market value determines the price. Each artwork is bought, sold and priced within individual marketplaces. That in itself is a true work of art.
Scarcity is another important factor. How many Van Goghs can you find in the world? When it comes to dead artists, scarcity dramatically determines pricing.
Any specific artwork is unique. Many artists and dealers put in effort to create value – the perception that the art has, present or future potential equals buy-able value.
Michelle Gaugy, [Gaugy Gallery in New Mexico, USA] explained that the services of art dealers getting the artist’s work to receive reviews in magazines, be exhibited in museums, or placed into well-known collections gives the artist’s work third-party blessings. She used the analogy of having your significant other approved by the family before he proposes – it doesn’t really mean this person won’t do you wrong, but it gives a certain reassurance.
So, is it worth spending millions?
For today’s art consumers, buying art gives access to a fun lifestyle – Art fairs, and auctions around the world hold stunning and modern parties where art sets the tone. In some countries like China or India, art buying is considered first and foremost for investment, rather than a lifestyle.
The art market rebounded quickly after the last recession, faster than traditional investments. In times of high and rising inflation, art has performed historically well across all market sectors. All you need to do is be nifty about it.
Find the right opportunities to buy, hold, and sell or trade the work on the market at the right time.
Bottom line, art can be a sound investment. Whether you have millions to buy ‘that’ Van Gogh or a few hundred to back an emerging artist. Who knows, with good branding and a fair wind, it might one day be worth millions! We can all hope.
Start investing in authentic art pieces created by under-discovered artists – visit The Yellow Brick Road Gallery to see our talented and exceptionally creative artists.
