Art Dealers and Galleries
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,400 art dealers, galleries, and auction houses in the US generate revenue by selling artwork or earning commissions from consignments. With a consignment sale, the dealer earns a commission based on a percentage of the purchase price. Auction houses earn commissions based on the hammer (sale) price. Primary-market dealers develop relationships with promising new artists and help establish a market for their work. Secondary-market dealers specialize in art for resale on behalf of collectors, institutions and estates.
Long Sales Cycle, Slow Moving Inventory
Art dealers and galleries often have significant investments in inventory, with no indications of a quick return.
Vulnerability to the Economy
Demand for art is sensitive to economic conditions, and drops during periods of uncertainty.
Industry size & Structure
The average art dealer operates out of a single location, employs 4 workers, and generates over $2 million annually.
- The art dealer, gallery, and auction industry consists of about 4,400 companies that employ about 16,500 workers and generate about $10 billion annually.
- The industry is concentrated; the top 20 firms account for 49% of sales.
- Large companies, which include the Gagosian Gallery, David Zwirner Gallery, and The Pace Gallery, generally have a limited number of locations (ten or less) and often have international operations. The industry includes auction houses, such as Sotheby's.
- Post-war and contemporary art accounts for 54% of global art trade, according to The Art Market report.
Industry Forecast
Art Dealers and Galleries Industry Growth
Recent Developments
Jul 16, 2024 - Sales, Employment Higher
- Employment and average wages for nonsupervisory employees in the art dealers and galleries industry increased during the first five months of 2024, according to data from the US Department of Labor Statistics. Wages per hour reached $22.07 in May 2024. Sales for miscellaneous store retailers, including art dealers and galleries, were 7.1% higher in March 2024 compared to a year ago and 11.8% higher than the previous month, according to the Census Bureau.
- Young wealthy Americans are interested in collecting art, according to a new survey from Bank of America reported in The Art Newspaper. The survey revealed that 83% of respondents aged 43 and younger currently own art or would like to, compared to 34% of respondents older than 43. Compared to older generations, millennial and Gen Z respondents were six times more likely to say they plan to take out loans against the art they inherited. Respondents with art collections worth more than $100,000 noted that they would be more interested in buying a valuable work of art in the next year instead of selling one. According to Drew Watson, head of Bank of America's art services, "That is reflective perhaps of the time that we're in right now, which is more of a buyer's market. The art market is really coming off of recalibrating and finding a new equilibrium off of the highs of 2022 after the pandemic recovery. There's some great buying opportunities in the market right now."
- Sales in the global art market declined by 4% in 2023, reaching an estimated $65 billion, and surpassed pre-pandemic levels, according to The Art Basel and UBS Global Art Market Report 2024. While sales have slowed due to economic and political instability, transaction volume was up 4%. The top three markets were the US (42% of sales by value), China (19%), and the UK (17%). According to Clare McAndrew, the founder of Art Economics and author of the report, “2023 saw a much-anticipated easing in sales in the art market after two years of strong growth after the pandemic. While high-end sales were thinner, activity held up at lower levels and the market continued its evolution along a dual path of offline and online sales.” Online sales were up 7% year over year, reaching an estimated $11.8 billion. Dealer sales were mixed in 2023, with smaller dealers experiencing an 11% increase in average sales and larger dealers seeing a decline of 7%.
- The National Federation of Independent Business (NFIB) monthly jobs report shows that unfilled job openings fell in June 2024, with a seasonally adjusted 37% of small business owners reporting jobs they could not fill. The reading is down five points from May 2024. A seasonally adjusted net 15% of small business owners plan to create new jobs over the next three months, unchanged from May. About 19% of owners reported labor quality as the most important problem facing the business. According to NFIB Chief Economist Bill Dunkelberg, “This summer, small business owners continue to try to hire and find qualified employees for their open positions. The number of small businesses with one or more job openings they can’t fill remains at exceptionally high levels. However, owners are raising compensation at historically high levels to attract and retain employees.”
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