Dealers and Auctions

I did not read what Souren Melikian wrote in “Art and Auction” the other day, but I was told that he wrote that the art dealer was a thing of the past. Certainly the art dealer is under severe strains in many ways, at least if you are talking about the English furniture market. Some of the stresses include very high rent for decent space, fast rising costs in insurance and transportation and extraordinarily expensive booth rents at antique shows. Add to that the difficulty of finding inventory, and it is not an easy business to be in.

Is the auction house the cause of all this? Certainly, auction houses have muscled into a place of prominence that few might have imagined they could attain years ago. They are into just about any and every field and really are the market setters in a few such as contemporary art and impressionist art. Both fields, because they require such vast sums for the purchase of just one item have, however, become investor dominated. People look to them to put money into as a safe haven for a long term investment or as a short term profit maker on a rising artist. Yes, the auction houses have benefitted greatly from the “art as investment” mind set.

It should be realized, however, that not everyone in every market is in it for investment. This is art after all and it is highly personal. I have known collectors who have ignored price tags in order to acquire THE piece for themselves. You could call it an obsession, but that is not accurate. It is that the object is worth more to them than the money. How simple that understanding is and it epitomizes the essence of and the reason for the dealer, because above all, the dealer educates. Money isn’t everything after all.

 

 

You can endlessly analyze the reasons for buying at auction from the alleged comfort of a (knowledgeable?) underbidder to showing off to a girl friend. In the end it is a lot sexier, at least for the casual buyer, to purchase something at a sale. For dealers to get hung up on this is rather like a boxer wishing he were a heavyweight when he is 5’2″ and 110 pounds. He knows how to box, he just seldom gets any recognition for it.

I would also venture to say that the cyclical nature of all markets makes the auction houses look like they are “winning” at this point in time. Winning, however, is not what the market is about. It is about sustaining a profitable business. Good dealers know that this is the point, not whether auctions get the glory. Furthermore, the auction houses do not wish to eradicate dealers. Dealers amount for a huge amount of underbidding which supports bigger prices. I would dare say that in the English furniture market, there are very few pieces bought above estimate that have not had a dealer involved in the bidding.

The relative ease of the auction house experience–easier if you are richer–needs to be focused on by dealers who want to, if not compete, at least be considered in the same breath as the auction houses. A number of English furniture dealers understand this and endeavor to make their customers understand it as well by offering the best of service. In the end, no buyer at auction would ever buy from them again if the service from a dealer exceeded that of the auction house. The funny thing is that it usually does.

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