Primary and secondary market

What is the primary market and what is the secondary market?

The primary market is the first sale of a work — the moment it passes directly from the artist or their gallery to its first owner. The secondary market is then every subsequent resale of the same work, most often through auction. Put simply, the primary market is the premiere and the secondary is everything that comes afterwards.

How do they differ?

Prices and rules behave differently on the two markets. The primary market is largely private and untransparent: prices are agreed between gallery and buyer and rarely become public. The secondary market is far more visible thanks to published auction results, where anyone can look up what sold for how much.

Why does it matter to a collector?

Because it tells them how to find their bearings on price. On the secondary market there is something to go on: the results of earlier sales suggest roughly what a work is worth. On the primary market they depend mainly on the price the gallery sets, and comparison is far harder.

Can you give an example?

When you buy a painting at an exhibition directly from a living artist, or in their gallery, you are on the primary market. If someone sends the same painting to auction a few years later and it sells there, that is already the secondary market. One work, two different settings with different rules.

What should you watch out for?

Above all the opacity of the primary market, one of the barriers that make art feel mysterious and out of reach. When buying directly you often have nothing to compare against, so do not be afraid to ask how the gallery arrived at the price. And on the secondary market, do not forget that published figures tend to be final prices including the premium.

— Anna Pulkertová, founder of Art Part Club