The "secondary market" in art refers to the resale market where art, initially purchased from galleries or directly from artists, is subsequently sold by owners other than the original artists or galleries. It's also known as the aftermarket or resale market.
Understanding the Secondary Art Market
The secondary market contrasts with the primary art market, where art is sold for the first time. In the primary market, artists and galleries directly benefit from the sale. In the secondary market, however, the original artist or gallery typically doesn't receive any direct financial benefit from the transaction (although increased prices on the secondary market can enhance an artist's overall reputation and therefore future primary market sales).
Key Characteristics of the Secondary Art Market:
- Resale of Artworks: It involves the resale of artworks previously sold in the primary market.
- Different Sellers: The sellers are usually private collectors, estates, or dealers who acquired the art from previous owners.
- Auction Houses & Dealers: Major players in the secondary market include auction houses like Sotheby's and Christie's, as well as established art dealers specializing in reselling artworks.
- Price Discovery: The secondary market plays a crucial role in price discovery, reflecting the perceived value of an artwork based on demand, provenance, and other factors. High prices achieved at auction can significantly influence an artist's market value.
- Market Trends: The secondary market provides insights into prevailing trends and the performance of specific artists or art movements.
- Liquidity: It offers a way for collectors to liquidate their art holdings.
Example:
Imagine an artist sells a painting through a gallery for $10,000 (primary market). Years later, the collector who bought that painting decides to sell it at an auction. If the painting sells for $50,000 at the auction (secondary market), the artist typically doesn't receive any portion of that $50,000.
Impact on the Art World
The secondary market's activity, prices, and trends profoundly influence the entire art world, affecting artist reputations, collector behavior, and the overall perception of art as an investment.
