Some argue that there is a secondary market and that galleries fill this role. This is an important contribution but it does not provide the full market. There are a few shortcomings to the private resale market. Firstly, private sales are not a matter of public record and later I will explain why this is important. Secondly, galleries process a relatively small number of works. Private dealers who specialize in this do more sales but I only know of three. By comparison we sold 306 lots in our last auction in less than three hours! Many more items are coming onto the market as the collector base from the last thirty years ages. One needs a system that grows with the incoming volume and the way new collectors collect.
Thirdly, existing craft galleries, now less in number than a decade ago, sell mostly to an existing market. Auction is the best way to attract new collectors. For instance, in our June auction there were 360 bidders from 15 countries! We have been in this business for 30 years and knew less than 15% of the bidders. Fourthly, auctions build confidence. When a new collector knows that there is a solid resale market, they “invest” more readily in contemporary work. Strong auctions, well researched, put fine craft on the same level as fine art as a cultural asset.
Auctions affect the gifting process. And this brings us back to public records. If you give work to a museum, getting that tax deduction can get tricky. The IRS requires comparable sales that are no more than three years old. Working with many appraisers as we do, we find them frustrated by the lack of craft sales data. As a result, they often cannot deliver the full value to their clients for tax deduction. The broader the sales database, the better it is for the gifting process.
What is the downside of a craft at auction? Auctions are good whipping boys, blamed by dealers for failed careers, for dropping prices and for flooding the market with too much art. Sometimes this is true but mostly these problems are not the fault of the auction. It is just the messenger. Failing careers are inevitable, auction or not. It is caused by a lack of continuing interest in that artist’s work and when this work comes up on auction and receives the dreaded “pass” this just shines a light on an existing condition. Whatever the medium, period or style only a small percentage make it into a strong resale market and from there to the high canon. Even in their lifetime only a small percentage of artists in any market retain or exceed original retail prices. Conversely one sees artists who struggled for years to get traction in the market, soar on auction. The sword cuts both ways.
Good auctions build scholarship, encourage new blood, bring long lost masterpieces to the surface, and provide regular data for the market analysis and tax deductions. For instance, if you are giving a Voulkos stack to a museum anytime soon, your appraiser can cite our world record of $105,750 as its current value. The best price before that was under $70,000.
Auctions can be as useful for galleries as for collectors. Firstly, when everyone is selling, buy for stock. When we thought artists prices were too low on auction we bought, developed the market and resold the work later profitably within our gallery. When a work that had grown ‘tired’ in the gallery, we sent it onto auction where it almost always found a home and returned us the capital it had tied up. Either one has to live with the auction, as we did in our gallery, but it grew to be our friend over the years and hope that ours will do the same for you. Comments and suggestions are welcome. Garth Clark