Art pricing: the pros and cons of transparency
Art is a unique and valuable commodity that is often associated with exclusivity, mystery, and prestige. As such, pricing artwork can be a complex and sometimes contentious process. Artists and galleries often face the difficult decision of whether to provide transparent pricing or hide pricing information from customers. While there are benefits and drawbacks to both approaches, ultimately, the decision comes down to the individual artist or gallery and its specific goals and target audience. In this blog, we'll explore the pros and cons of transparent pricing and the reasons why galleries may choose to hide their prices. We'll also discuss the potential impact of these decisions on sales, trust and customer satisfaction. Whether you're an artist, art enthusiast or a gallery owner, this article aims to provide insights into the complex world of art pricing.
Ultimately, the decision comes down to the individual artist or gallery and their specific goals and target audience
A short history on art pricing
The trend of hiding art prices in galleries can be traced back to the early 20th century when art dealers and collectors began to shift their focus from the traditional model of commission-based sales to a more secretive and exclusive approach. Galleries began to view themselves less as retail outlets and more as gatekeepers of high culture, catering to an elite clientele that appreciated the exclusivity and prestige associated with owning fine art. By hiding prices, galleries sought to create a sense of exclusivity and mystery around the artwork they were selling, thus reinforcing the idea that art was not a commodity but a luxury good reserved for the elite.
Over time, this trend became more entrenched, with many galleries believing that listing prices would diminish the perceived value of the artwork and lead to a reduction in sales. The rise of private sales, art auctions, and online marketplaces further fueled this trend, as galleries sought to differentiate themselves from these more transparent sales channels and create a unique brand identity based on exclusivity and secrecy.
Despite this long-standing tradition, some high end galleries like the Gagosian have recently begun to shift towards more transparent pricing, recognizing the benefits of providing customers with upfront information. This shift has been driven in part by changing consumer preferences and the rise of online sales channels, which have made it easier for customers to compare prices and shop around for the best deals.
For many artists and galleries, the goal is to cultivate new buyers who might be unfamiliar with the customs of the art world or uncomfortable asking for a price in person. More than half of the inquiries to David Zwirner Gallery’s online viewing room, which has operated for more than two years, have come from new clients, according to the FT.
“Transparency is in the interest of new buyers who don’t really know the market,” says Olav Velthuis, an economist and professor at the University of Amsterdam in an Artnet article. “At the same time, I would say in the end, having transparency is in the interest of the entire market.”
As such, the trend towards transparent pricing continues to evolve and is likely to play an important role in the future of the art market.
So, why do artists and galleries hide their pricing from customers?
There are several reasons why artists and galleries may choose to hide their pricing:
Pricing variability: Artworks often have variable prices based on factors such as the artist's reputation, the rarity of the piece, and the medium used. Galleries may feel that providing a general price list may not accurately reflect the pricing of each artwork.
Negotiation: Many galleries prefer to negotiate prices with potential buyers to ensure they get the best price for the artwork.
Exclusive sales: Some galleries may only sell artworks to select clientele, and by not displaying prices publicly, they can maintain an exclusive and personalized shopping experience.
Avoiding competition: By not publicly listing prices, artists and galleries can avoid direct price comparisons with other artists, galleries, agents or online retailers.
Brand perception: Some galleries may choose to hide prices to cultivate an image of exclusivity and prestige. By not making prices readily available, they may create an impression that their artwork is valuable and rare.
However this effect of hiding prices should be considered within the overall business approach. The big question is: what is the real effect on art sales?
What effect does hiding prices have on art sales?
The effect of hiding prices can vary depending on the type of customers the artist or gallery is targeting. Here are a few potential effects to consider:
Some customers may be intrigued by the mystery surrounding the pricing of an artwork and may be more likely to inquire or visit the gallery to learn more.
Hiding prices can make the sales process less transparent and may create a sense of distrust or unease among potential buyers.
Customers who prefer to know pricing information upfront may be discouraged from visiting the gallery or may feel uncomfortable inquiring about prices.
Negotiating prices with potential buyers can take more time and may slow down the sales process.
Without pricing information, customers may be less likely to make an impulse purchase, as they may not have an immediate sense of the artwork's value.
Overall, hiding prices can create a sense of exclusivity and may attract some customers, but it may also deter others who prefer transparency and accessibility in the sales process. Like the David Zwirner Gallery, mentioned above, it may be worth testing both approaches to see what the real effect is.
What are the benefits of having transparent art pricing?
There are several benefits to having transparent art pricing:
Builds trust: Transparent pricing can build trust between the gallery and potential buyers. Customers are more likely to feel comfortable making a purchase when they feel they are being treated fairly and can trust the gallery's pricing.
Increases accessibility: Providing pricing information upfront can make the sales process more accessible and inclusive for a wider range of customers. It can also help to attract new customers who may not have considered purchasing artwork previously.
Saves time: Transparent pricing can save time for both the gallery and potential buyers. Customers can quickly determine whether an artwork fits within their budget and the gallery can avoid spending time negotiating with customers who may not be able to afford the artwork.
Facilitates comparisons: Transparent pricing allows customers to easily compare the prices of artworks with other galleries and online retailers. This can help customers make more informed purchasing decisions and can also help galleries stay competitive.
Increases sales: Providing transparent pricing can increase sales by making it easier for customers to make a purchase. Customers who feel confident in the pricing and trust the gallery are more likely to make a purchase.
Overall, transparent pricing can create a more positive and inclusive sales experience, increase trust between the artist or gallery and their customers, and ultimately lead to increased sales.
What are the downsides of transparent art pricing?
While transparent pricing has many benefits, there are some potential downsides. By publicly listing prices, artists and galleries may be subject to direct price comparisons with other galleries and online retailers. This can make it more difficult to stand out and may result in pricing wars. Transparent pricing can limit the opportunity for negotiation, which may be important for artists and galleries who rely on negotiation to get the best price for their artwork. Artists may also be hesitant to publicly list prices for fear of undervaluing their artwork.
For customers, if prices are higher than expected and there is no in-person negotiation, some potential buyers may be deterred from making a purchase, which can negatively impact sales. Transparent pricing may make artwork feel less exclusive or special and more like a commodity, which can be a disadvantage for artists or galleries who rely on prestige and exclusivity to create demand for their artwork.
How should you decide?
Ultimately, the decision to hide your pricing or provide transparent pricing is up to you and depends on a variety of factors such as your target audience, the specific art being sold, and your overall business goals. More specifically, your pricing ethos should match your own ethos around creating and promoting art, and feel authentic for your art buyers.
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