Be Smart About Art

How is art like an Apple computer?

written by: Susan Mumford Jan. 25, 2015 1) RECOMMENDED-> Susan Mumford + Chris King's Blog 4262 views

How is art like an Apple computer?

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My maternal grandfather was a life insurance broker. His motivation has long touched me; he wanted to look after families while looking after his own. It helps to understand why my current-day insurance broker loves being in the business: when the worst happens, her team has the great privilege of doing its best to look after folks like you and I.

When my business was only 18 months old and lost three major pieces of electronics owing to a power surge in the building, it was time to call on the insurance policy. While obtaining quotes for replacement bits of kit including a printer, hard drive and laptop, I came upon one of the best examples of consistent pricing I have seen to date.

Why is consistent pricing of interest? Many people outside of the art world have asked me about the pricing of art. They’ll say things along the lines of, “You must have to pull numbers out of thin air,” and “Obviously, there isn’t anything upon which to base the price of a work of art.” These assertions are misinformed, for art is priced within the context of an established market.

Many a time I’ve asked audiences of artists and dealers alike about the meaning of ‘market value’. The responses vary from what people are willing to pay to the price at auction. The answer in short is that it is the set value of a product within a given market. Of key importance is consistency of that amount. If a piece sells at one location for £1,000 and at a different location for £2,000, which is the real value? It’s unclear, and can greatly upset people who have paid the higher amount.

Returning to our quest for valuing replacement computer equipment, I was amazed by the clarity of one piece of machinery: the Apple laptop. While the other lost goods greatly ranged from resller to reseller, the laptop price was the same on every last retail website.

With the laptop, it is evident that uniformity is part of a company strategy. And with the other items to replace it simply wasn’t clear what price to state for ‘replacement value’. Were the varying higher prices inflated to enable discounts, or were the lower prices indicative of undercutting industry competitors in a sacrifice of profit margin?

Thanks to the clear pricing of the Apple laptop, there was no question as to what amount to state on the insurance claim. The broker did an excellent job in looking after the matter and securing a successful claim. My grandfather would have been pleased to know that his kind of insurance firm endures to this day.

What can you do to apply Apple’s approach, to clearly set the value of items in the marketplace? Consider works of art, books, art greeting cards and the like. Should the worst ever happen and you need to make a claim on lost items, you’ll be in good standing to make a claim. Plus, you’ll establish a consistent value in a given market, providing confidence to buyers, easing the way to the secondary market and the like.

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p.s. Power surge protectors are where it’s at in the digital age! Protect your equipment with these amazing devices.

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Photographs © Chris King.

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Your remarks on consistency reminds me of discussions (arguments?) I have had with other artists concerning studio prices. Instead of thinking in terms of public sale price, some artists consider the valueof a work as the amount that ends up in their pocket and so want to sell works at a great discount directly from the studio (or at greatly inflated prices in a gallery). Which only confuses the public, on top of being toxic from any long-term collaborative viewpoint!