The Role of Art & Antique Dealers An Added Value Figure 2. Shift in Business Models Over Time 1950s - 1970s
Buy cheap, sell dear
1970s - 1990s
Changes in supply, demand and competition
© Arts Economics 2011
The business models used by dealers interviewed in the study varied widely over time, between genres and value sectors as well as geographically. However, despite the individual variations, some quite distinct models could be differentiated.
Dealers can be broken down into “traders” versus “holder-dealers”.
Some dealers can be classified as traders, buying objects and selling them again in a relatively short space of time for a commission such as 10% to 20%. These dealers focus mainly on searching and buying for specific buyers, or simply on maintaining the highest possible volume of sales (much like an auction house).
An alternative to this approach is the “holder-dealer”, who buys something, engages in research, restores or finds other ways to make it more attractive (such as finding information on provenance that will enhance its value to specific collectors), markets it heavily, and sits on it until the right buyer comes along. This approach is often used in the higher value/ higher margin and low volume sectors of the market or for dealers with the ability to maintain high inventory. A combination of approaches may also be used by the same dealer for different types of stock, or they may alternate their approach depending on buyer demand and the availability and quality of supply.
Dealers can act as principals, agents or both.
Another way to distinguish dealers is by the financial model they use in relation to purchasing stock: dealers may act as a principal or as an agent, or some combination of both. Some of the dealers interviewed owned their entire inventories and very rarely acted as agents. The main reason for pursuing this approach was to maintain complete control over supply. Despite the larger capital outlay, many also wanted to be able to afford stock via the revenue generated from their business or to be self-sustaining. Some also carried out substantial restoration work or other services that necessitated outright ownership.
Historical & Future Perspectives 27 2000s
Access, add services, sell competitively
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