Secondary market

Definition

The secondary market refers to the platform where previously owned artworks are bought and sold after their initial sale in the primary market. This market plays a vital role in establishing the value of art and provides liquidity for collectors, allowing them to trade pieces more freely. It also reflects trends in taste and demand, influencing artists and galleries alike.

5 Must Know Facts For Your Next Test

1. The secondary market can significantly influence the value of an artwork based on its sales history and demand among collectors.
2. Art fairs and online platforms have expanded the reach of the secondary market, making it easier for buyers and sellers to connect globally.
3. Notable auction houses like Sotheby’s and Christie’s play a crucial role in the secondary market by hosting auctions that set market prices for high-value artworks.
4. The resale of art in the secondary market often comes with a commission fee that goes to galleries or dealers who facilitated the original sale.
5. Trends in the secondary market can impact emerging artists by either elevating their status based on demand or limiting their visibility if their works do not perform well.

Review Questions

• How does the secondary market differ from the primary market in terms of artwork valuation?
  • The secondary market differs from the primary market primarily in how artwork is valued and sold. In the primary market, prices are often set by the artist or gallery, reflecting their perceived worth at initial sale. In contrast, the secondary market relies on actual sale data and collector demand, which can fluctuate greatly based on trends, artist reputation, and previous sales. This difference means that artworks can appreciate or depreciate significantly once they enter the secondary market.
• Discuss the impact of online platforms on the dynamics of the secondary market for art.
  • Online platforms have transformed the dynamics of the secondary market by increasing accessibility for buyers and sellers. They allow collectors to browse a wider selection of artworks without geographical limitations, thus enhancing competition and pricing transparency. Additionally, these platforms provide tools for tracking sales history and value trends, which can inform purchasing decisions. As a result, online sales have become an integral part of how art is traded in today’s economy.
• Evaluate how trends in the secondary market reflect broader cultural shifts in society.
  • Trends in the secondary market can serve as a mirror to broader cultural shifts by showcasing what types of art resonate with collectors at any given time. For instance, an increased demand for contemporary works by underrepresented artists might highlight societal movements toward inclusivity and diversity. Conversely, if traditional forms regain popularity, it may indicate a societal longing for nostalgia or stability. By analyzing these trends, one can gain insight into changing values and tastes within society as a whole.

Related terms

primary market: The primary market is where artworks are sold for the first time, typically directly from artists or galleries to collectors.

art dealer: An art dealer is a professional who buys, sells, or appraises artworks, often acting as an intermediary between artists and collectors.

auction house: An auction house is a business that facilitates the buying and selling of art through public auctions, often representing sellers and buyers in transactions.