Selling Artwork in a Weak Economy
In response to the ongoing global economic and health situations, it's probably a good time to dust off some facts and prepare for what may be challenging times to come. Depending on the severity of a recession, economic slowdown, or other circumstances that may negatively impact commerce, in combination with the length of the boom that preceded it, recovery can take anywhere from months to years. Rest assured that all will be well and things will get better, but for now, this appears to be the rather abrupt end of one of the longest economic expansions in US history-- over ten years.
Recently, our confidence that the good life will continue uninterrupted has been shaken. The current global crisis has begun to affect the way we live our lives, people are starting to hunker down, and survival strategies are making a move to the fore. Possible complications of this new reality include a decrease in world trade, economic slowdowns, job loss, shortages, and the risk that we're headed for some kind of global recession, if not worse. So considering where we are at the moment, it seems like a good time to see how things might play out in the world of art...
We've been in an art bull market for years. In fact, it's one of the longest sustained bull markets I've seen, possibly the longest, especially when it comes to contemporary art (and I've been monitoring the art world for 40 years now). Those of us who've been around for a while know that every time recession happens, the art world is impacted in basically the same way. In other words, learning from the past is a great way to prepare for the future. So let's go back in history for a moment, take a look at what happens, why it happens, and what artists and galleries can do to survive turbulent times. Making contingency plans for a not-so-rosy future is always a good idea.
Among other things, what happens during art bull markets like this is that younger artists and gallery owners who've never experienced a downturn before come to believe that art prices just keep going up and up forever and ever. They can't wait to raise their prices from month to month, show to show, or for any reason whatsoever. Why? Because life is good and people keep buying art. Why do they keep buying it? Because they see prices going up and up over and over and again, and actually believe their art is going up in value right along with those prices. But that's not how the art world works. The art you own is only worth what you can sell it for, not what you see it priced at in rarified retail settings like galleries or for sale directly from artists.
The first casualties of a weak economy are usually those artists and galleries that have raised their prices the fastest and the most, and for the flimsiest of reasons simply because times were good and they could get away wit it. As the art market begins to cool and adjust to deteriorating conditions however, the buying pool shrinks, remaining buyers get more picky about what they buy, and the supply and demand curve gradually shifts from a sellers' to a buyers' market. Sales slow, supply piles up, galleries and artists start to take hits on their cash flows, and the downward pressure on prices begins to affect how business gets done.
The art with the most inflated prices will collapse in value the most. And on down the inflation chart, with artists and galleries that have been reasonable in their price increases being impacted the least. But everyone will take a hit as the new reality sets in. The good news is that some art lovers will keep buying, especially those who would rather buy art than eat. But they tend to be relatively scarce, knowledgeable, understand value, and know a good deal when they see it... and a bad one when they smell it. The moral of the story? Pricing as high as possible may yield short term benefits, but usually results in longer term pain, while pricing sensibly regardless of economic frenzy levels is much more likely to keep you financially afloat in challenging times.
In any recession, money gets tougher to come by, discretionary spending decreases, "consumer confidence" goes down, and even people who aren't that impacted by a soft economy are more hesitant to spend than before. As you might guess, none of this is good for the art market. Facts are that selling artwork isn't easy even in a healthy economy, and when things go south, it can seem downright impossible. But confronting adversity is a fact of life, especially for artists, and any artist who expects to be successful must continually adjust to all kinds of adversities in order to survive. What kinds of adjustments might play to the upside when times get tough? First, we'll talk money, and then add a few words about expanding markets.
The number one consideration for any artist in the thick of riding out a slow market and selling less artwork is to get flexible fast, particularly with respect to prices, especially with respect to adjusting them in an increasingly affordable direction. Typically, when I mention lowering prices, I'm met with looks of shock and dismay from whomever I'm talking to-- dealers, artists, or anyone else involved in any aspect of selling-- like art prices can't ever go down; they must always go up. "Lower prices?" they shriek. "No way!"
I find this response rather intriguing because the exact same people who rail on the commerciality of the art world suddenly flip to the money side, and preservation of prices, when they're the ones who might be affected. All that elevated talk about art and living an art-filled life evaporate as the conversation turns to money, and as much of it as possible.
But the facts are that artwork is a commodity just like any other, and just like any other, prices fluctuate. They do not always go up; sometimes they go down. They tend to go up when money flows freely, demand is strong, and supply gets tight; they generally go down when money dries up and studios, back rooms, and storage areas begin to bulge with unsold works.
Take a lesson from the business world. Companies know what they have to do to survive, and if that means lowering prices, they do it. Tough times call for tough measures. By lowering prices, at some point the prospect of owning their products at significant discounts becomes too attractive for consumers to pass up. The same holds true for art. At certain price points, artworks become too attractive to pass up as well.
If price drops become necessary, please don't equate lowering them with the quality of your art or "worth" as an artist. Keeping them too high for too long in the face of adversity can significantly compromise your ability to survive a bumpy economic ride. The good news is that your art stays exactly the same no matter how much or how little you sell it for. If you have a painting priced at $2000, for example, and you lower the price to $1200, it's still the same painting, and you're still the same artist.
"But how do I explain lower prices to people who bought me at the top?" you ask. This may be a challenge, but for most artists, it's not that much different than explaining lower real estate prices, lower stock prices, or any other prices that have fallen as a result of a weak economy. And just because your artwork is more affordable today does not mean it won't go right back up in price tomorrow.
If anyone asks (and they rarely do), tell them you're responding to collectors who continue to love your art just as much as they did back when they had more money to spend on it, and that you're doing whatever's necessary to keep them in the game. Tell them this is a window of opportunity, a special offer, a moment in the course of your art career when ownership becomes more affordable, and it won't last forever. There's never been a better time to buy your artwork than right now and there may never be again. How about those for reasons?
Galleries can take similar approaches. Reductions are temporary. We understand that times are tough; we understand that you love art, and so in response, we're reducing prices-- for a limited time-- to keep your collection growing. We've worked out interim agreements with our artists to make their art more affordable. We realize that money isn't flowing quite as freely as it was a year or two ago; we realize that you still want to buy art, and we're responding to that.
Once you understand and accept the fact that art prices fluctuate according to supply, demand, and economic conditions-- that they always have and they always will-- your artistic life gets easier. Take it from me-- an art appraiser who's studied the market for decades and watched prices ebb and flow. You can't expect your prices to stay the same or continue to rise indefinitely when everyone around you has less money to spend. And when people have less, they only spend when it's for a really good reason. So be prepared to lower your asking prices, significantly if necessary, in order to provide that really good reason and in so doing, keep your art career afloat and alive.
MORE PRICE-RELATED SUGGESTIONS:
* If you have gallery representation and sales have slowed, speak with owners about the current situation and about ways to possibly turn the sales slump around, including lowering prices. Outcomes often improve when everyone works together.
* Before you lower prices on more expensive work, try offering more affordable options for buyers like artwork under $500, for example, or even under $200. Don't make the mistake of focusing all your attention on larger sales while ignoring smaller ones. A steady stream of small sales can easily add up to a livable income.
* Sell on the installment plan. Ten buyers paying you $50 a week or a couple of hundred dollars a month on installment plans means you're making $2000 per month.
* Rent your art. If you can rent twenty works of art for $30 each per month, that's $600 per month that you wouldn't otherwise have if the art sat in your studio gathering dust. You can also rent with an option to buy. Confine the rental pieces to those you're less likely to sell outright. You don't want to tie up salable works that can potentially generate significant dollar amounts in short periods of time.
* Barter your artwork. Successful artists trade art for everything from medical, dental, and legal services to meals, pots, pans, furnishings, other artists' artwork, and just about anything else you can think of. For example, offer to hang your artwork at restaurants or coffee shops in trade for monthly food allowances, or at hotels or bed and breakfasts in exchange for rooms, or at retail stores where you shop. Keep an eye out for people selling furniture or household items and offer to trade artwork for whatever you might need. In other words, suggest your art as trade for goods or services whenever and wherever you can.
* Explore part cash/part trade options even if someone wants to buy your artwork outright. Unless you ask, you never know when a buyer might have something to trade that you really need. The great advantage to trading is that, assuming you can use whatever you're trading for, you almost always come out ahead financially (as does the person you're trading with).
A FEW WORDS ABOUT EXPANDING YOUR MARKET
Thanks in large part to social media and art fairs, art markets have steadily evolved in scope from local and regional to national and international. The global nature of today's art trade allows artists to present themselves and their art to far greater audiences than ever before with minimal investments or efforts on their parts. While the economy in your country may be weak, the economies in other countries may be doing just fine. It's not a bad idea to keep track of where these places are, and to show your work if opportunities present themselves.
This doesn't mean you take random shots in the dark or trot out the same art the same way no matter what the circumstances. Understand who or where you believe your art might have appeal, think your presentations through, and introduce your work to potential fans, followers, buyers or galleries in ways they can understand and appreciate. You know what's in it for you to expand your audience; don't forget to talk about what's in it for them. Making your art relevant to whatever situations you are offering it in will yield positive results if you give people good reasons to act.
As for America, there once was a time in our history not too long ago when we walked on water, and whatever we did, stood for, or produced was automatically deemed worthwhile and the envy of everyone else on the planet. This is no longer the case. To be specific, American art is no longer internationally sought after simply because it's American art. If anything, the opposite has increasingly come to pass. Sadly, our ongoing politics have done us no favors with respect to our standing in the rest of the world, so it's up to you as an artist to show that we still belong, we're still relevant, we still want to reach out regardless of what our country does, and that our art continues to embody values that are meaningful not only to us, but to everybody everywhere. In fact, if anybody can help get us back on track, it's our artists.
We know what the problems are; we know what we have to do to make things better. If your art, statement, message, perspective or inspirations can somehow communicate that Americans want to reach out, repair relationships, and bring people together, then you stand a fighting chance of moving some merchandise to broader audiences and continuing to pay your bills. I realize this is a relatively unconventional line of thought, but clawing our way back into the good graces of our fellow human beings is not exactly a bad idea. And using your artwork as a vehicle to convey sentiments, open dialogues, make friends, establish networks, and build bridges, with the ultimate intent of coming together with people the world over just might contribute to your financial survival in difficult times, and just might offer hope (and art) to those who may currently see little or none.
Artists possess unique talents and abilities to express emotions, arouse feelings, explore sensitive issues, and make powerful statements with their art. Rather than view tough times as obstacles to career success, consider them opportunities to tap into your creative strengths and reserves, and to expand your sphere of influence. Impact someone else's life with your art in a meaningful way, and you just might make yourself a sale.
(art by Hang Chun Zhang)
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