The art market represents a $45 billion-dollar global industry that is driven by a quickly evolving art gallery business model. Collectors are moving towards digital art spaces to discover and purchase art rather than the traditional gallery exhibition space or museum. This presents today’s gallerist with a unique set of new challenges: the rise of the internet and the birth of a global art market, preferences towards digital ‘galleries’ and the growth of international art fairs, as well as the same old struggles of staying relevant in a constantly evolving industry and keeping up with the mundane everyday tasks of running an art gallery business.
Brian Swarts is the President and Director of Sales at Taglialatella Galleries, overseeing operations for their New York City and Palm Beach, Florida locations. Taglialatella is a major player in the global art market focusing on contemporary and modern pop and street artists, with a vault that includes works by Warhol, Bansky, Basquiat and Lichtenstein. Orly and Mora Benzacar are the second and third generation directors of the Buenos Aires gallery, Ruth Benzacar. The gallery’s more than fifty-year trajectory has seen the growth of the space from a private residential showroom in the mid-1960s to one of the most important contemporary art galleries in South America. With their distinguished experiences, Swarts and the Benzacars offer insight into the everyday operations and challenges of a running an art gallery business.
Curating a Gallery
For emerging artists, getting art galleries to pay attention in the hopes of acquiring representation is an enormous challenge. Schwarts points out that Taglialatella receives nearly a dozen submissions a day, and hasn’t signed an artist who submitted via email to date. “A lot of times we receive submissions that are being sent out to hundreds of different galleries and the work isn’t relevant to us, like a style or medium that we don’t carry, so although we look at everything it’s difficult to wade through all of that,” he says. Instead, the gallery depends on personal connections to build new relationships with artists. Swarts continues, “We prefer taking the recommendations of dealers or other curators, in addition to spotting artists on our own online or at a museum show, for example.”
Mora and Orly Benzacar take a similar approach of keeping their ear to the ground for artists that could function within the gallery’s mission and aesthetic. “Our curation process is wholly visual,” explains Orly. “When we are deciding whether or not to take on a new artist, we aren’t thinking at all about the sale. We aren’t talking about whether their work is ‘sellable’ or weighing out the monetary value of the artist. Because when it comes down to the actual sale of a work, how am I supposed to sell something that I don’t actually believe in?”
Like all ‘brands,’ an art gallery needs to tell a story with a consistent narrative, meaning that artists looking for representation should be carefully studying each individual gallery they submit to evaluate if their artwork is the right fit. Likewise, artists should depend less on portfolio submissions and more on building relationships with the players in the local arts community. Benzacar sums it up: “We work on exclusivity. Our artists are only allowed to work with us within Argentina. So finding that ‘fit’ is important; they have to believe in and be dedicated to us as much as we are to them.”
Valuing the Vault
For gallerists that work within the secondary market – like Taglialatella – valuing their collections of works of established artists is often about scavenging the data mine. For example, Taglialatella is one of the globe’s leading dealers of artworks by Andy Warhol and is able to source fifty years worth of data to know exactly what a limited edition “Mao Tse Tung” should sell for. They use the same data analysis to value the works of the likes of Jean-Michel Basquiat, Alex Katz and Keith Haring.
Pricing the works of emerging artists, on the other hand, is a challenging and strategic task. Both Swarts and the Benzacars emphasize the importance of listening to consumers on the ground if you expect your art gallery business’s pricing model to work. “When it comes to an artist that is still developing, pricing is a bit more fluid. We tend to pay a lot of attention to the reaction of the works in the gallery. It is common to adjust prices depending on the reaction an artist receives over a set period of time, and whether or not we see a demand in the gallery,” explains Swarts.
For an art gallery like Ruth Benzacar, whose physical space functions in isolation from most international art collectors, attendance at an international art fair is invaluable. Mora Benzacar says, “A big part of valuing works is simply paying attention to the market and listening to what the collectors are willing to spend on an artist. When we go to art fairs, we are constantly talking to collectors, dealers, artists and gallery directors. Another important element is obviously paying a lot of attention to the trajectory and reception of an artist throughout their career.”
Orly chimes in, “We work with Liliana Porter, who was invited to the Venice Biennale where she did a show that was very talked about it. It did very well. It created a new demand that allowed us to value her works higher. And obviously, that meant that we needed to take advantage of that push and show some work in the United States at Art Basel.”
Whereas Benzacar measures the value of work completely on the market, Taglialatella’s art gallery business model supports three brick-and-mortar sites with a significantly different overhead. “We have a full-time staff across three galleries. We have a framer here on the East Coast and another on the West. We have full-time art handlers. We have works that are shipped back and forth from New York and Florida. All of those things have to be taken into consideration when we are pricing each individual piece,” says Swarts.
Navigating a New Globalized Market
Attendance at fairs serves another vital purpose: finding collectors. According to a study by the European Fine Arts Foundation, collectors are gradually moving away from discovering and purchasing art from gallery exhibition spaces and gravitating towards digital platforms and international art fairs. Participation represents enormous costs, which are often difficult for smaller galleries to cover.
Orly Benzacar says, “Art fairs represent a considerable cost for us. We are paying for travel, fair fees, shipping, hotels, it becomes very expensive. But we find a lot of clients at fairs who wouldn’t find us otherwise because of geography.”
Likewise, the advent of the digital age has changed the entire art gallery business model by simplifying operational processes and expanding the scope of collectors a gallery is able to engage. For art gallery business owners, taking advantage of digitizing their vaults is extremely important. Not only does it save a gallery time and financial resources, it often facilitates sales.
Ruth Benzacar’s art gallery business model has been able to overcome one of their most significant challenges—geography—by uploading their entire collection into an easily accessible digital catalog. “When I started just ten years ago, we printed out these enormous booklets to take to any art fair we attend. It was a lot of work and we had to throw them out after every show. Now, everything is organized on the cloud. When we attend fairs we show collectors everything on a phone or tablet. We have those dossiers ready and when a collector inquires about a piece that we haven’t brought with us to an art fair, we can send it over immediately to their email. We keep that information and stay in contact with those collectors when new works come in. Sometimes that leads to sales without a collector ever stepping foot in the gallery or seeing the work in person.”
Digital spaces have democratized the way that art is bought and sold, allowing artists and dealers without brick-and-mortar spaces to join the market from the comfort of their computer. This appeals to a new generation of art collectors that prefer to purchase art online. According to a study by Invaluable about market trends in the United States art market, younger generations are turning towards social platforms like Instagram and Pinterest to discover new art, rather than the traditional museum or gallery visit.
When it comes to purchasing, 51% of collectors between the ages of 25-34 would purchase art online, and collectors age 35-54 are about 33% likely to purchase online, as well.
Taglialatella has had to adapt their art gallery business model to keep up with fluctuating trends fueled by technology. They shifted away from exclusively selling pieces on the secondary market, which used to be more difficult to find but now is as simple as “shopping on Google for an Andy Warhol painting.” Independent dealers that are operating exclusively within the digital space are able to undercut the prices of brick-and-mortar galleries that have location costs, full-time staff, and in the case of Taglialatella, shipping costs between their multiple gallery locations, their highest overhead.
Expanding into the primary market has presented a different set of challenges for the art gallery business. According to Swarts, over the last five years, he has encountered more and more artists that want to run their own business. “We are finding that many artists want to do their own marketing, sales, and exhibition and cut out the role of the art gallery,” explains Swarts, “Rather than have a gallery show, they do a pop-up. Rather than working with an agent or dealer, they sell their works online. For some artists it works, for others it doesn’t but it is one of the biggest challenges facing art gallery business today.”
The Future of the Art Gallery Business Model
It is clear that a new generation of art collector’s are radically changing the way that the art gallery business functions. As young art consumers begin to enter the market, gallerists and artists alike will have to embrace new technologies and engage within digital spaces in order to keep up.