Introduction
Art business and the event industry are lucrative spheres in scientific research. It has been stated that auction guarantees play a significant role in defining sellers’ gains, as they can increase the overall revenue. However, it is essential to consider additional factors for the art business development, such as available opportunities and financial outcomes connected to the guarantees. This study was designed with the overall aim of assessing the impact of auction guarantees on two spheres, namely the art business and future development of the event industry. To attain the goal presented, three objectives were constructed. The first objective regards the analysis of contemporary trends that can be observed in the art business, as well as the topic of online public sales and guarantees. The second objective is to evaluate the opportunities available in the art business and event industry due to the auction guarantee. Finally, the third objective considers the financial influence of guarantees in the two spheres discussed.
Methodology
The methodology applied in this research includes the implication of secondary data from various online sites. This study’s general approach envelops the stages of design creation, data analysis, and proposition of conclusion statements that can explain the results achieved. In addition to searching for available statistics, their relevance and potential benefits to the research were assessed. Moreover, a pilot study was a necessary inclusion for this investigation, as it provided viable insights. As such, it allowed reliable sources sampling, the examination of the resources needed to conduct a credible analysis of the data, as well as proper management of the time of personnel involved.
The initial design for this research included the implementation of primary data. However, due to the issues related to the pandemic, the study was forced to adopt the use of secondary information from auction houses and sellers, available from previously published articles and investigations on this topic. Additional statistics were collected through the process of interviewing the public sales representatives and artists, as well as professionals from the event industry. Finally, various Art Market reports were used along with the quantitative and qualitative information included in them. The auction guarantee was chosen as the independent variable, while financial impact and art business opportunities present dependent variables in this research
Findings
The study’s results state that guarantees play a major role in the art business and public sales. To successfully distribute various artworks, the auction houses require a particular certainty. The guarantees discussed present the sellers with a necessary confirmation that their items will be sold. Employing history professionals and art critics allows the sellers to establish a specific price for the item in question, providing the institution with a certain understanding of its future financial situation.
Moreover, the data gathered provides an insight into the bidders’ perception of the auction house. Such perception is significantly impacted by the number of works sold, leading the individuals to believe that the business is exceptionally lucrative and trustworthy. Most buyers rely on a cognitive bias, which is known as the anchoring effect. Previous prices of the artworks are usually used as guiding points to ascertain the items’ value. The cost of the object also influences the trends in this industry, as it determines the quality of this work. Higher fee prompts buyers to view the artwork as more prominent and valuable, thus influencing the art business industry.
As for the online auctions, access to such sites provides the sellers with an opportunity to increase their field of work, creating a path to the international market. The cost of devising a web-site is quite modest, and only a small amount of input is required from the individual selling the objects. Such comfort of use has greatly influenced the art business, prompting change in the auction trade. Changing the offline approach to the online one seems to be exceptionally profitable for these companies, as is shown in the data from this research.
Even though the auctions were forced to lower the costs of their merchandise, this alteration proved to be highly advantageous. Decreased prices allowed the sellers to appeal to a broader range of social groups, further advancing the market of public sales. Participating in auction house events is now seen as a less luxurious activity, available for populations with various incomes.
Considering the opportunities in the context of action guarantees, it is clear that such guarantees’ existence is highly beneficial for the selling institutions, as it lowers the variance of their revenue. The implementation of auction guarantees can significantly elevate the total financial profits. Such gains are advantageous for sellers, auction houses, and the third-parties as well. The opportunity created by the third-party guarantee is much higher in comparison with the in-house guarantee. Additionally, it is worthy to note that public sales’ profitability dictates the tendencies in the emergence of new art, as it outlines the most successful works and artists.
The financial impact of guarantees has proven to be quite prominent by the results of this research. The warranties provide the seller with a specific certainty of art purchase, thus increasing this institution’s financial stability. Moreover, successful trading ensures the availability of new art pieces for sale, further securing the business’ profitability.
Conclusions
Traditional frameworks of the art market are deconstructed by the implementation of online sales mechanics into the art business industry. The alternative path of buying artistic merchandise online seems to be enormously profitable for the sellers. Although internet-based auctions are prevalent within this sphere, the prominence of offline sales is still high. The success of online markets does not necessarily predict the disappearance of actual public auctions.
Nevertheless, it is still essential to consider the circumstances enveloping the study conducted. The emergence of COVID-19 has dramatically impacted the possibility of performing live sales, changing the overall flow of this process and transferring it to the world wide web environment. Given the success of this transition, it is likely that online auctions will stay feasible even after the pandemic’s resolution.
Opportunities presented by the auction guarantees have proven to be beneficial for both the sellers and buyers of art objects. A higher number of sales conducted provides the institution with a better reputation, which in turn leads to more expensive items available for this house, increasing the revenue achieved. Even though all parties involved in the auction can suffer from potential risks connected to the auctionary activities, such risks can be negated by the possibility to receive or sell valuable artworks.
Finally, the need for auction guarantees appears to be dependent on the level of prices for the lots presented. The higher the bid costs, the greater the need for auction guarantees. As for the financial impact on the total revenues of auctions, it can differ depending on the inclusion of auction guarantees. Overall, the third-party contracts possess the most significant influence on the monetary gains, increasing the sellers’ benefits. The transfer from live auctions to digital bidding is especially beneficial when considered together with the various phenomena of guarantees.
The study’s results clearly state that the kind of guarantee applied can increase the possibility of financial benefits gained. To fully ascertain the topic of auction guarantees in the art business, it is essential to continue extensive research into this field. Further exploration of digitalization happening to the auction houses is imperative for a proper understanding of their development. Online markets should be considered in the next investigations, and their potential benefits and disadvantages should be thoroughly outlined. Finally, a study in a pandemic-free environment is required to fully confirm the results of this paper and provide further insights into the connection between art trends and public sales.
Reference
Buchholz, L., Fine, G. A., & Wohl, H. (2020). Art markets in crisis: How personal bonds and market subcultures mediate the effects of COVID-19.American Journal of Cultural Sociology, 8(3), 462–476. Web.