“You buy an item for less than the current price…”

That’s a quote from Amazon.com’s website. The online retailer just reintroduced “haggling” into the modern digital marketplace. Amazon is offering its new “Make an Offer” service on over 150,000 items. These include collectable coins, fine art, sports memorabilia, and other “haggleable” items.

Unlike online auction site eBay, Amazon shoppers will place offers lower than the original list price, not higher. The seller will accept, reject, or negotiate an alternative within 72 hours.

Here’s an example: Pablo Picasso’s Jacqueline au Bandeau. The painting’s original list price was $125,000. Then the seller reduced it to $100,000. A shopper could buy it now at that price or make an offer for something less.

>  Now I don’t have a clue what a Picasso should be selling for… but Mark Ford does. If you’re an art collector like he is—one who acquires pieces for enjoyment or for investment diversification (or both)—Amazon’s new service offers you incredible opportunity. Any time you gain access to a wider marketplace, prices tend to fall in favor of the buyer. The haggling component enhances that further. But, as with any investment, the key is to know genuine value. Mark writes:

 

Investment-grade art is typically art from established, major artists (i.e., artists whose works hang in major museums). It is traded regularly through the big auction houses, such as Christie’s and Sotheby’s. And though it is more expensive than decorative art, it has the potential to appreciate in value. (More about this—including which investment-grade artists to begin with—in another essay.)

[Note: “Decorative art” has a somewhat condescending connotation. Another, less pejorative, way of putting it is to say “commercial art.” “Collectible art” is sometimes used synonymously with “investment-grade art.”]

I bought three pieces from a dealer for a total investment of about $30,000. Those three pieces are now worth $70,000 collectively.

For the same $30,000, I could have bought 50 or 60 pieces of decorative art at another gallery. That would have completed—in a single day—my desire to fill every wall in my house with paintings and prints. But the value of those 50 or 60 pieces would probably be worth only about $15,000 today.

So that is the first rule: Focus on quality, not quantity. Buy only investment-grade art… the best pieces you can afford. (By “best,” I mean works that are considered typical of each artist’s most valuable period and/or style. I will explain this in detail in another essay.)