What is the difference between the primary and the secondary market? These terms are important to understand when purchasing art or when getting an appraisal.
The first sale of an artwork (from the artist to the first owner, or from the gallery to the first owner) is considered the primary market. If art is bought from an artist directly or from an art gallery representing the artists’ work for the first time, it is a primary sale. The majority of art galleries and art fairs fall under this primary market category.
The secondary market refers to any artworks that are being re-sold. This could be any number of times AFTER the first sale. Auction houses are the where most of these transactions would take place. There are also some galleries and fairs that specialize in secondary market pieces such like Mega Galleries that also represent very famous artists or their estates after they have passed away. These works are not coming to market for the first time. The secondary market can include work from any time period including older works and contemporary works.
The main reasons that works would sell in the secondary market are famously referred to in the art world as “death, debt and divorce.” Estates can be liquidated for various reasons including these. Actor Russell Crowe held a very successful auction in 2017 with Sotheby’s called “The Art of Divorce”. These celebrity auctions draw collectors who may wish to diversify their art collection or flip it for greater return.
Of course we recommend buying art because you love it, for an investment. But if you are considering a big investment, we recommend consulting with an art advisor.