How the market works

The primary market is the gallery system. An artist is represented by a gallery that controls access to their work, sets prices, and manages the relationship between the artist and collectors. Primary market prices are not publicly disclosed. Access to the most sought-after artists at primary market prices requires a relationship with the gallery and a buying history that demonstrates you will steward the work rather than flip it

The secondary market is auction houses and private sales. Secondary market prices are public at auction. The major houses publish hammer prices and they form the most reliable price reference in the art market. Buyer's premiums at the major houses run from twenty to twenty-six percent on top of the hammer price

The private sale market, which Sotheby's, Christie's, and Phillips all facilitate alongside their auction operations, is opaque. Prices are negotiated privately and rarely disclosed. This is where the most significant works often trade.

CollectorGrade take

The buyer's premium at auction is not optional and not negotiable for most buyers. Factor it in from the first calculation. A work that hammers at one hundred thousand costs you one hundred twenty-five thousand by the time you leave the room.