Buying Art Online

As our lives become increasingly digital, it is of little surprise that the art world is also shifting towards online sales.  Aided by the mass migration of businesses onto the web as a reaction to coronavirus restrictions during the pandemic, online marketplaces provide a convenient and accessible way for collectors to buy and sell art from the comfort of their own homes.  Galleries, auction houses and fairs are creating digital storefronts, while new platforms have devised inventive ways for individuals to purchase fractional shares of artwork.

Art market participants are increasingly looking towards digital solutions to traditional problems.  According to the Art Basel and UBS Global Collector Survey 2022, 48% of all fine art sales took place online in 2022.  Further, online-only sales at three major auction houses (Sotheby’s, Christie’s and Phillips) have increased nearly ten-fold in the past four years to just under $900 million in 2022.  This phenomenon has also extended beyond individual transactions to live auctions; Sotheby’s reports that 91% of bids at these events were placed online in 2022, as reported in The Art Market 2023 published by Art Basel and UBS.

It is clear that online art transactions have become the industry norm, with participants expressing comfort at all levels of the market.  In fact, virtually all (95%) high-net worth collectors surveyed by Art Basel and UBS in 2022 reported they had purchased artworks without viewing them in person first.  Why might this be the case?  Buying art online offers a number of advantages versus traditional methods: greater access to a wider range of artworks, improved convenience and affordability offered by online platforms, and increased price and informational transparency.

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Greater Accessibility

One of the biggest advantages to purchasing through online channels is gaining access to a wider range of artworks.  While traditional galleries are geographically limited, online marketplaces can connect prospective buyers to art sellers across the globe.  This offers anyone with an Internet connection the ability to purchase art, regardless of their location or financial situation.

Online channels also reduce market exclusivity.  Galleries and dealers are typically restrictive, both in terms of the selection of artworks they offer and more importantly, to whom they allow as a potential collector for artists in their stable.  Artworks offered online through either gallery or auction platforms are open to all individuals, provided they have the requisite funds. 

Further, innovative platforms like aShareX (Art Share Exchange) offer the ability to purchase fractional shares of high-value artworks that are otherwise unattainable for most buyers.  Individuals are able to bid for artworks just as they would in a traditional auction, but for either the entire piece or a fraction of its ownership.  If fractional bidders win an auction, shares are issued to all winning bidders via an SEC-qualified offering in proportion to the individual amounts won.  Fractionalization gives participants who might only be able to afford one higher-value work of art the ability to spread their investment across a number of pieces for a more diversified collection.

By democratizing the buying process, aShareX and others grant regular collectors or investors the opportunity to acquire blue-chip artworks that were previously reserved only for market insiders or the ultra-wealthy.  This transactional liberation facilitated by online platforms creates greater liquidity for sellers via an increasingly diverse and expansive pool of buyers.  Fractional buyers may also turn around and sell their shares via secondary marketplaces, providing an extremely convenient way to transact without necessitating an outright sale of the underlying artwork. 

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Convenience and Affordability

Purchasing online offers convenience and affordability not traditionally seen in the art market.  Whether one is acquiring a smaller work from a marketplace or shares in a Picasso from an online fractionalization platform, transactions are made much quicker and often at a lower cost than traditional methods of owning art.

Dealings with traditional galleries or dealers can be a complex and lengthy process, if buyers are even able to negotiate in the first place.  In addition to the ability to resell  through the same platform, purchases and sales online are immediate, as opposed to a convoluted and drawn-out sales process with potential legal agreements and restrictions.  Secondly, artworks offered directly through online platforms such as aShareX provide transparency in their provenance and authenticity.  Artworks offered on fractionalization platforms are curated for their quality and legitimacy, moderating the research with which collectors and investors might otherwise be burdened.

Additionally, there are often extra costs for the buyer associated with the transportation, storage and insurance of a purchased artwork, which becomes more complicated based on the buyer’s geographic location.  Individuals can forgo many of these extra time and cost demands by transacting exclusively online, and in the case of fractional ownership, can avoid many of these costs.  aShareX, for example, maintains the original physical artwork and takes on the costs and logistics of storage and insurance on the investor’s behalf.  When combined with potentially lower comparative price points, this results in a compelling method of acquiring art for those who are seeking to lower art ownership costs. 

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Transparency

Artsy’s Online Collector Report (published 2019) revealed that the single greatest concern for individuals wishing to purchase art was the lack of publicly-available pricing, and was a primary reason that turned these individuals toward online channels.  Galleries and dealers tend to be discreet and only divulge artwork prices once a relationship has been established; however, this can be time-consuming and intimidating.  By purchasing online, prices are generally available up-front with no hidden costs, and self-directed buyers can browse or participate with confidence.  

As an open auction platform, aShareX also offers a strategic advantage in facilitating transparent, market-based pricing.  Clients can discern the true value of the artwork as established by competition between both fractional and 100% bidders.  This contrasts with the risks of backroom deals, possible intermediary price manipulation, or other undisclosed information that might be hidden from a buyer utilizing traditional art buying avenues.  Individuals are able to benefit from transactional clarity where there are no hidden contracts or unforeseen fees, and gain a unique market-based confidence in the artwork – or shares in an artwork – they are acquiring.

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Conclusion

Online channels are rapidly growing in pace with evolving technology and buyer attitudes.  The unique benefits of increased access, convenience, affordability and transparency are available to all individuals regardless of whether an artwork is purchased as a fractional ownership interest, offered by an auction platform such as aShareX, or the entire physical asset.  With often lower costs to entry and few geographic limitations, purchasing art online can be an advantageous way to start collecting or investing.