Friday, October 31, 2008

Be Wary of Lemon Art Dealers!

We have all heard of lemon car dealers-- car dealers who lure customers toward vehicles that they know are not worth the listed asking price-- but did you know that some art dealers have the lemon car dealer mentality? Lemon art dealers lure art collectors into buying art that has been artificially priced. In other words, they overprice artwork that does not have an established market. Lemon art dealers attempt to create a high market for art that has yet to be established naturally within the context of the art market.

The work pushed by a lemon art dealer can be technically sound. They can be masterful works. However, the artist behind the work has not been allowed to mature naturally in the art world. His or her prices have not been allowed to become established on their own, so to speak. This can be a dangerous situation for a young artist to be in. True, a young artist desires to make a splash in the art world-- that said, it is best not to do it as a dealers lemon. Unfortunately, it is easy for an artist to fall for this ploy.

As mentioned, the unethical practice of the lemon art dealer normally involves a young emerging artist who lacks a time-tested track record as far as the art market is concerned. The dealer strives to push the artist beyond his or her capacity by increasing prices without justification. Unfortunately, this practice can harm the future market potential of the artist who is pushed into it-- if exposed. Thus, there are signs that art collectors and emerging artists should acknowledge before negotiating with an art dealer.

Art collectors want to make sure that the piece they invest in involves an honest-- or at least near honest-- value as far as the current market for the specific artist is concerned. Emerging artists want to make sure that their market is naturally established over time so that their career growth is sustained. Unfortunately, a lemon art dealer can be just as deceptive as a lemon car dealer in that he or she will go great lengths to create a market that does not really exist. The questionable character and business practice of the lemon art dealer can be discovered by his or her actions-- as they say, actions speak louder than words. Below are three situations to look out for:

1. Overpricing at contemporary art fairs: A lemon art dealer will artificially increase prices when showing at a contemporary art fair. This is a bad business practice because it can upset collectors who discover the mark up. Perhaps the lemon art dealer hopes that no one will notice that similar works by the artist are far cheaper at the gallery. Unfortunately, if this action is exposed it will cast doubt on the validity of the artist involved and potentially the validity of every artist represented by the same unethical art dealer. Word of mouth can spread fast-- mesh that with blogs and the little white lies of the lemon art dealer can become a firestorm of scrutiny. A little research can reveal the facts.

2. Excessive promotional hype for an artist who was ‘unknown‘ before being represented by the gallery: A lemon art dealer will utilize excessive promotional hype in order to mask obvious flaws concerning the price of specific works that have yet to be time-tested by the art market. The idea being that if there is a ton of press about a young artist than that young artist must be a wonderful investment, right? In this scenario the art dealer is trying to artificially establish the young artist beyond his or her years of experience. While this has worked for some… it also leaves the young artist with little to fall back on if it goes wrong. Keep in mind that not all hype is bad. However, be wary if it appears as though the art dealer is trying to force how the young artist should be perceived by the media and collectors. Red flags should go up if it seems that there are more press releases about an upcoming exhibit for an emerging artist at the gallery than past reviews for that specific artist. Go with your gut.

3. Unrealistic pricing: Another tactic of lemon art dealers involves persuading young emerging artists to ask ridiculously high prices compared to what they had asked prior to gallery representation. Have you seen a young artist selling for $20,000 a pop? If so, the influence of a lemon art dealer was most likely behind the price. Lemon art dealers are easy to spot-- the little details give them away. Young artists need to protect their own investment-- the time they have spent toward mastering their art. In other words, be realistic about your prices. You are not Damien Hirst…yet. Starting out with excessively high prices often translates to work gathering dust in a storage area. A young artist should avoid this at all cost. Being a lemon can stain an otherwise promising career.

Lemon art dealers have long been present in the art market. However, there has been an obvious increase in the last decade. In fact, ethical art dealers will sometimes take this unethical path in times of economic desperation. Thus, the art market is swamped with artwork by untested artists involving prices ranging in the upper thousands even though said artists had only sold a handful of pieces-- at much lower prices-- before being represented. When the economy is stable one may overlook these issues, but when times are hard people are more apt to examine the details surrounding the rise of a young artist under his or her art dealer. Thus, young artists need to observe how they are being represented. They need to ask themselves if they are being groomed for quick cash or if they are being groomed for a long and success stay in the art market.

Again, during difficult economic times hype tends to loose its artificial luster. Thus, art collectors are more apt to focus on how time-tested an artist is-- especially if the collector plans to purchase for the purpose of investment. During times of financial crisis-- like we are experiencing now-- it becomes easier to discover which art dealers pitch lemons and which have remained true to the conventional aspects of the art market. A natural splash into the mainstream art world is better than making a splash that is caught in the throws of deception.

Take care, Stay true,

Brian Sherwin
Senior Editor
www.myartspace.com

6 comments:

Anonymous said...

Dear Brian

Important article that would be of significance to many artists.

I would just like to ask you, what exactly did you mean in the opening section "to be established naturally within the context of the art market." ?

Specifically I would like to understand what and why assumptions have been made about how the art market 'should' operate, or how an artist's career should develop.

Thanks...

Balhatain said...

Anon, by 'naturally' I mean that the work in this scenario has yet to stand by itself within the mainstream market. A natural development of pricing over time is almost always the best way to go. It makes the market for a specific artists work more stable in the long run.

Thus, if a young artist goes from selling works for a few thousand independently to selling art for $20,000, $50,000 or as much as $100,000 once represented by a gallery there can be problems later down the road due to those drastic changes in pricing.

If the market takes a rough turn many of those artists will be placed in a tough spot. Some may never reach the financial level they had been thrown into by aggressive dealers. That is why I think a natural progression of pricing is the better choice. Most dealers would agree with me on that.

Think of it this way... some of the most celebrated artists living today did not start off selling works for $20,000 a pop. They moved up that ladder one step at a time. The problem today is that people want to be at the top from the very start.

Conventional viewpoints of the art market dictate that an artist should not make excessive changes in pricing due to the fact that art collectors will become upset.

For example, if collector A purchased a piece from you for $1,000 and you sell a similar piece to collector B for $10,000 the following month there could be problems. Collector B will not be happy if he or she discovers that collector A purchased a similar work for a much lower price. If you sold a third similar piece to collector C for $500 you will have both collector A and collector B on the war path. In that scenario collector A and B will most likely inform collector D, E, and F that your prices are not stable.

Eventually, people will not want to purchase your work because how are they to know what your prices will be next week, next month, or next year. Thus, consistency is needed as far as pricing is concerned. That is my opinion.

Don’t get me wrong, I think there is a lot of room to be unconventional as to how you carve your path as an artist. Some follow a traditional path by obtaining an MFA and seeking gallery representation. Others have found greater success and representation even though they are self-taught. Some have been successful while avoiding the mainstream art world.

The unwritten rules are quickly falling apart. Some artists have bypassed the brick & mortar galleries all together by making a name for themselves online and establishing their own venues for exhibitions.

We are living in amazing times!Anything is possible. However, consistent pricing is a must as far as I’m concerned.

Gringo said...

This a very useful knowledge! Thanks Brian.

Anonymous said...

Thanks for clarifying, this makes much more sense to me now when you relate it to abrupt changes in pricing. As you say there is always room for existing models to be challenged... great posting Brian.

Anonymous said...

Good deal. I like people who express their opninion in tha same way.

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