The Role of Art & Antique Dealers An Added Value
Overall, therefore, while e-commerce appears to be functioning well for dealers selling at low price points or with familiar, high knowledge buyers and sellers (for example dealers selling to the trade or to interior designers), most dealers concurred that they would not buy or sell without seeing the work in question or at least the seller, in person. It also appears that many of the art-related e-commerce websites that have been launched over the last 20 years have not represented any fundamental shift in the actual business models that dealers use. Many have simply extended the reach of retail dealers and increased their traffic count by enabling buyers to shop more widely and with less effort.
Although online retailing remains generally much lower than offline (with global estimates ranging between 3% to 8%), e-retail is expected to grow at five times the rate of traditional retail and its year-over-year dollar increase is expected to overtake offline retail by 2020.11
These general
trends along with advances in technology and online safety seem likely to have at least some effect on dealers in future, and should bring online transactions more into focus. It seems most likely that the business model that many dealers may pursue in future will be a combination of an offline and online presence (or a “bricks and clicks” strategy rather than a pure-play internet business), so that buyers continue to have a layer of comfort and personal contact if required.
Apart from e-commerce, the Internet has also had a noticeable effect on market transparency. Although some of the earliest accessible art price databases launched in the late 1960s, the emergence of a number of different sources of online auction price data has had significant effects on the market in the last ten years. There are currently around ten fully functioning art price databases for auction data, giving buyers access to past price levels and other related information on sales. These developments have reduced opacity in the market, which has been a positive advance for consumers, but has made margins tighter for dealers, as information on past sales values is accessible to all for free or at very low cost.
While some dealers agreed that increased transparency is inevitable (and some saw it as a positive development), others relayed concerns that buyers researching on their own are often now armed with incomplete information, which can cause more confusion over valuations. For example, most auction price databases quote the hammer price only, rather than the price with commissions, so buyers are often comparing net auction prices with gross dealer prices. Buyers only looking at past hammer prices may also neglect to include what a dealer puts in to justify mark up such as restoration of the work, frames, VAT and other external costs.
4.6 Credit and Finance
Trade and start-up financing for art dealers is generally scarce, and getting access to credit has become more problematic over time.
Art and antiques, especially at the top end, is a highly capital-intensive business with large credit requirements, however, the market is generally bereft of trade financing. Accessing credit
Historical & Future Perspectives 35
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64