While not everyone agrees with Simchowitz’s philosophy, his point about galleries is hard to debate. Most young artists sell through young galleries, and the price reflects not just the artist’s baseline, but the dealer’s as well. “It’s more of an art than a science; in other words, there aren’t any really objective metrics in terms of pricing the work,” says a young Lower East Side dealer. “There can be so much hype out there and a lot of these artist’s prices can be highly variable. With the way that I price at my gallery, and I think we’re lower than other galleries, I think the biggest influence is unfortunately cost of the gallery, and that is often not really thought of too much.” There are sizable investments on both sides of the table. A tube of Holbein’s cadmium red oil paint costs more than $30 per ounce. The use of a kiln in New York? A single firing can run at $200. Image editing software like Adobe Photoshop sets artists back upwards of $100 per year. For galleries, a modest art-fair booth can cost over $20,000 when all fees, travel, shipping, and production are accounted for. Plus, both parties must consider the 10% discount for the buyer, an institutionalized goodwill gesture. These are costs that artists should be aware of when pricing for themselves, or brokering with their first gallerist.
When speaking about sustainable models for the emerging market, another Lower East Side dealer points to the programs of Chelsea galleries Greene Naftali and Metro Pictures. “They realized that in an emerging market, there is the phenomenon called ‘the race to the bottom,’” he says. “What that means for collectors is they know that these young artists are not going to indefinitely continue their ascent.” He consents that there is always a fraction of young artists who do maintain a steady rise in price point, but emphasizes the value of timing, patience, and long-term vision. “They wait and keep the prices low; it’s a way to protect their markets,” he says. They wait for a moment where the artist’s work gains widespread attention, an event like a major museum exhibition. “The price point then jumps from very low to very high, and in a sense it’s justified. But they wait for that moment, which actually strikes me as being the most ethical approach.”
Illustration by Jan Buchczik for Artsy.