Art Dealers’ Inventory Strategy The case of Goupil, Boussod & Valadon from 1860 to 1914

Proper inventory management is crucial for art galleries since the art market is highly illiquid, subject to periodic changes in tastes and that inventory represents one of the main costs of galleries. Yet, despite its importance, inventory management has been overlooked in the literature. This paper distinguishes four main strategies used by art dealers to manage their inventory: relying on commissions, on consignments, on speed of sale or on large inventories. We use this classification to set the inventory strategy of Goupil, Boussod & Valadon, a major art gallery active in France at the end of the 19th century, into perspective. Goupil’s books cover the sale of more than 25,000 artworks between 1860 and 1914. Rapidity to sell was a key element in Goupil’s strategy. Out of the sold artworks, almost 75% were sold within a year. Artworks which had been in inventory for a long time sold at a discount. Goupil required a slightly higher mark-up for artists from which he held a large inventory. Mark-up for artists in residence were lower, suggesting Goupil was ready to make a discount to establish their market. The likelihood to sell their artworks at a loss was also lower, signaling a preoccupation for their long-term market.