SELLING : THE COMPETITIVE LANDSCAPE
This is an introduction to issue 2 of "Collectors' Guide to the Southeast Asian art market", C-Arts, August 2010. Full 4-page article with charts and illustrations
Don Thompson in his book, “The $12 million stuffed shark – the curious economics of contemporary art”1, made a comment on contemporary art, about often how “branding can substitute for critical judgment”.
How true, branding IS everything, even in art.
For collectors with works to dispose, decisions on the choice of consignees are often a result of strong brand associations and/or long-standing relationships with auction house representatives. Somehow, there seems to be an imagined hierarchy of modes of sale that diminishes in returns as one moves down the pecking order - international auction houses followed by regional, selling in Hong Kong over Singapore and so on. But to what extent are these assumptions true? This issue, I would like to attempt to tackle some of these ideas by ‘stacking’ these beliefs against historical auction data in an effort to present both the rewards and the risks with different choices of the auction hammer.
This is done by studying the performance of auction houses vis-à-vis markets of a handful of Southeast Asian modern and contemporary artists . By looking at the hammer price/ auction estimate quotient, we are really trying to identify auctioneers who can consistently deliver the highest sales price over their expected ‘valuations’. We are after their track record of successes.
Even then, that is only half the picture. We are also keen to find out who can do it with the least amount of risk. Art trading has one of the highest transaction costs of all investment vehicles. Whether the work is sold or not, transaction costs apply. These costs (and risks) need to be fully accounted for in the decision making process. Not only those that are directly attributable to catalogues, insurance or freight, but also that of lost opportunities, the possibility that the work may be sold some place else.
Hence, a table of standard selling terms is presented in this issue to allow readers to compare gains and risks side-by-side.
It must be said, however, that even with empirical analyses, conclusions drawn cannot be a straightforward one, as many variables work together to arrive at a particular hammer price.
Hence readings of prices need to take these factors into account. The conclusions derived here can be seen to suggest possible emerging trends.
I certainly hope that it will surface some pertinent issues for reflection and encourage you to inject more ‘science’ into the ‘art’ of disposal.
Copyright © 2010 Patricia Chen. All rights reserved. No part of this writing may be reprinted, reproduced or utilised in any form or by any electronic or mechanical means including printing, recording or information storage and retrieval systems, without written permission in writing from the author.