Tuesday, June 7, 2011
Value and Worth
"An item is only worth what seller is willing to sell the item for, and buyer is willing to pay." Most transactions occur by following these simple tenets. Often the price buyer and seller agree on establishes "market value." If you own a home in a nice area of town and the bank forecloses on the house next door selling it cheap, market value of the homes in your area just took a dive! If you arrive at the end of an estate sale like Molly and I did Sunday, seller is more likely to discount heavily so they can maximize their earnings, and not have to pack an additional item - to them the item is "worth" a lot less. So we bought this wicker mirror stand for $10... Won't my granddaughter love it?
If you stop briefly as I have to analyze the buying/selling phenomenon, you realize quickly that an entire psychology emerges from a simple transaction. Often depending on outside influences which we cannot see or feel, people value goods and services differently when establishing price. Conversely when willing buyers come to market, worth is often interpreted through a completely different lens. Depending on how tough the traders are in any given transaction, sparks may fly!
Obviously supply and demand comes in to play in this equation. So many art collectors love her work that she simply cannot produce enough of it. Friends who collect art tell me that other factors like prestigious gallery showings, and just good 'ole fame can increase the pricing. Sounds like "demand" to me!