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Rob: Today we’re taking a closer look at selling art online with Alan Bamberger, art consultant and appraiser for ArtBusiness.com.
Rob: So Alan, we’ve identified that you really need to have a niche, you really need to ask detailed questions either of the artists or the representatives of the artists, but how do you do your sourcing for art?
Alan: I do it basically that way and the most important part, with no other product like art, people just make claims and you have to check out all the claims that people make about what it is that they’re selling, that’s #1. And then #2, you have to check the market, you have to see who else is selling art similar and what price they’re selling at. Art is kind of like real estate in that the way that you compare and contrast and determine your market is like how much is a similar house in the same neighborhood selling for. No two houses are alike, but they generally sell for the same price in the same area. So that’s kind of how you have to price it and make sure that you’re paying a fair price at the wholesale level or if you’re an artist you’re charging a price that’s competitive with similar pieces that are available.
Rob: So authenticity I would imagine is a question that comes up a lot because I imagine there are people claiming that this is Picasso’s doodles.
Alan: Yes, yes. This is a very large problem, especially on the internet, especially unfortunately, on eBay. And if you don’t have expertise in these areas of world famous artists, modern masters as they’re called sometimes, even some of the famous commercial artists, if you don’t have expertise and/or you don’t know someone who does, then my advice is stay away, buy from reputable dealers. For example, if you want to buy Picasso’s doodles or Picasso prints you might go to somewhere like The International Fine Art Print Dealers, that’s printdealers.com. These are members of an organization of very qualified, very experienced dealers who do not travel in commercial circles for the most part and you get the real deal when you buy from them.
Rob: Yeah, I imagine any time you’re really going for something that has some serious value to it that would be a real central issue.
Alan: Yeah.
Rob: So when are appraisals a good investment versus when they’re unnecessary, because I imagine there’s a time when you don’t need to do that kind of work.
Alan: An appraisal is necessary when you are wanting to transact or transfer the art in some way. Perhaps a tax donation, inheritance issues, insurance policy, that sort of thing. And when you get an appraisal you do not get an appraisal from the person selling you the art, because that’s an obvious conflict of interest, you can’t do that for IRS purposes. The appraiser has to be independent, non-conflicted, and have nothing to do with the transaction. A gallery that sells you the art and says we’re going to provide you with an appraisal for it, they’re of course, interested in making an “appraisal” as high as possible. So that’s not really an appraisal.
Rob: Do you ever need to check out those appraisals?
Alan: Oh yes.
Rob: I hear you on the value of a third party role there.
Alan: Yes, absolutely. And furthermore, there are different types of appraisals. It gets very complicated and there are people out there who take advantage of the fact that they know more about appraisals and how to frame them than the people who are receiving those appraisals. There is, for example, a retail replacement value appraisal which is sometimes given by a gallery. You have to look at those words. If “replacement value” is in there that’s generally beyond retail. That covers not only the retail value of the art, but if it should be lost or destroyed or stolen, the initial expense that you will have to go through to replace it. The type of appraisal that the IRS honors and the type of appraisal that I do the most is called Fair Market Value.
Rob: Just hold that idea because we’re going to be right back. Time for another short break. We’re going to talk a lot more with Alan Bamberger when we return. Go to ProductSourcingShow.com to listen to any of our past shows, read written transcripts, and much more information. Lots more to come. I’m Robin Cowie.
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