Trinidad Art Resellers (TARC)

This website is specifically geared to sell investment art. I, along with a number of friends and acquaintances, have been collecting art as an investment over the last 30 years.

Recently I was given the responsibility to dispose of an art collection worth about $600,000 TT. I had the art appraised and was quite surprised at the valuation fee being charged (1%) compared to property valuations which charge .0025%.

I had planned to give the collection to one of the art galleries to sell. Inquiring into the cost of doing this, I found that selling commissions ranged between 30 to 50% of the selling price depending on the gallery, the work involved and cost associated with selling the art.

I found these margins exceptionally high. Those who invest in art are taking significant risk, as the art may not appreciate at the same rate as other investments might. I found the math very disturbing.

To illustrate, let us say I buy a piece of art for $100. On the initial sale at the gallery the artist usually gets $60 while the gallery get $40.

Ten years later when I decide to sell the art, let us assume I can sell the piece for $200. From this sale the gallery gets $80 while I get $120 less $100 (which i paid for it), and so make a profit of $20 on my investment. The artist gets nothing as he has assigned ownership over to the buyer when he originally sold the piece. He usually retains the copyright and can make money by publishing copies of the original, but he does not enjoy any benefit from the appreciated value of the piece. So over the life of this investment up to the time of my sale, the artist makes $60, the gallery gets $120 less his cost and I earn $20.

I found this to be totally unacceptable.

I who took the risk made only 20% over 10 years, while the gallery whose only asset is that he had access to the buyers, earned the lion share of the profit with little risk, except the overhead cost of running his gallery.

So I decided to come up with a different scenario by opening my own On Line Art Gallery for the resale of art.

The total cost to the owners of the art using Trinidad Art Resellers is 15% of the finial selling price. The commissions are broken down as follows.

– Pieces are listed exclusively for a minimum period of 3 months.

* 1% commission paid up front to have the art appraised.

* Once sold 2% is paid to any living artist.

* 12% paid to Trinidad Art Resellers.

* All cost associated with the actual sale (Credit card cost, shipping etc.) are for the account of the buyer.

Using the same example above but applying the Trinidad Art Resellers selling commission, the artist gets $64, website gets $24, original gallery gets $40, while the investor gets $72 or a 72% return over 10 years and the buyer gets a great piece of art at market value. That’s a good investment for everyone. And the artist, having sold his original work, gets 2% off the appreciated value of his work, each time the piece is sold.

Appraisal

Who determines the value of the piece of art? Initially the gallery and artist get together and try to figure out what is the best price that the majority of work will sell for during the exhibition. The gallery usually pushes the price down to encourage volume sales, while the artist tries to push the price up to maximize his profit. However, by the end of the show, it is the market that determines the value of the work. Whats left unsold is usually discounted or returned to the artist for direct sale.

The correct way to determine the value of a particular piece of art is for the market to determine the price. Not all pieces of art are of the same quality. Not all pieces of art grab your attention, in ship modeling this is called a “compelling impression”. Art that has been exposed to the elements may also be faded, cracked and damaged, thereby reducing its value. Many times, particularly with watercolor, the wrong materials may have been used when framing the work, sometimes damaging the piece. Paintings may also be altered or restored using techniques that actually devalued the piece. Of course the reverse is also true. All of these factors can affect the market value of the piece. The base valuation price should be the average price of the last three similar pieces sold in recent times, added to the factors just discussed.

New buyers want to make sure that they are paying a fair price, as they want to make money on their investment over time, just as the seller did. Who should pay for the valuation? , Clearly it is the responsibility of the seller. The valuation then sets the “estimated “correct market price for the work. The seller may be interested in a quick sale and may ask that the price be lowered below the valuation. The opposite is also true as the seller may set a price higher than the appraised value because he feels that there is great demand for the particular piece and he is in no rush to sell. Finally the last thing that can affect the price is demand for the artist’ work and the availability of supply.

Price is always determined by demand and supply.