The Role of Art & Antique Dealers An Added Value Figure 5. Dealers’ Perception of Auction Houses Versus Dealers Dealers The art business
Specialised expertise
Small personal businesses
High focus on services
© Arts Economics 2011
Auction Houses The money business
Impersonal corporate bodies
service and high focus on sales
Diversified and high marketing budgets
Low focus on
While auction houses have gained relative market power over the last 20 years, there are a number of areas where dealers felt they still maintained a significant competitive edge. Figure 6 aggregates the key competitive advantages of dealers as reported by them. These are explained briefly below along with some insights from the collectors’ survey on the relative importance of these strengths to buyers.
i. Recourse:Dealers offer full guarantees with sales, often accompanied with legally binding documentation, whereas buying through the auction channel is still often caveat emptor, often with only partial guarantees and a range of disclaimers. As many dealers own their inventory, they are obliged to stand by it, and having purchased pieces themselves prior to a sale adds a layer of comfort for buyers. Dealers pointed out that the onus is also shifted to the buyer to show something is fake or damaged when purchasing at auction. This carries with it a prerequisite of knowledge of how to determine these conditions, which could entail further risks or costs versus a dealer-guaranteed object. Direct recourse and a guarantee of authenticity was one of the key advantages outlined by collectors, who viewed dealers as a more accountable channel for purchasing art and antiques.
ii. Expertise: Through focusing on one or a few categories of the market, dealers often have superior specialist knowledge and expertise. Some dealers claim that you can only get first hand expertise through actually buying and selling works, and therefore dealers have natural advantages through being directly involved with the objects they sell. Collectors cited specialist knowledge and expertise as a key advantage of buying through a dealer, and felt that they were more likely to have engaged in thorough research on a particular object as well as being generally more specialised in their field of interest. Many commented that dealers were an important source of information and research, and saw these as a key advantage in terms of the time it saved and quality of results versus their own personal research.
42 Historical & Future Perspectives
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