Two senior members of the international auctioneering profession launch separate online-only ventures this week. Tim Goodman and Simon de Pury are embracing the digital revolution, looking to challenge a centuries-old business model with a footloose approach to selling art and antiques at auction.
Goodman's Fine Art Bourse (FAB) hopes to gain traction in the market via an innovative pricing model. Meanwhile de Pury's eponymously titled firm is promising to reduce buyer's fees to 15%.
The headline statistic at FAB is that they will charge vendor's and buyer's fees of just 5% with a 72-hour packing and shipping service - so often a barrier to entry for bidding online - 'free' for both buyers and sellers. They add that transaction charges will be exempt of sales taxes or artist resale royalties, as sales are processed through headquarters in Hong Kong.
However, the devil is in the detail. Alongside the 5% cut, consigners and purchasers will each be billed an additional fixed fee to cover other charges. The 'fixed lot selling fee' of $330 applies for items estimated up to $100,000 and $1000 for items estimated at over $100,000. This covers collection, storage and photography while the 'fixed lot buying fee' at the same rates pays for packing, shipping and delivery.
Sellers will also responsible for paying insurance costs of 1%. ... the pricing model is designed to reward sellers of higher-priced items, but at lower thresholds it is less attractive.
Goodman believes the traditional auction business model - one where an auction house can take proceeds of up to 50% from the sale of a work of art - is no longer sustainable.It will be fascinating to see whether and, if so, how these two new-technology approaches will catch with purchasers who are in many cases both traditional in outlook and idiosyncratic in their habits. Will they take business from the well-established auction houses or will they create and develop new business? And, from a lawyer's point of view, it would be good to know a bit about choice of law and forum for the settlement of any disputes that might arise from the use of these services.
"Something has to give. All we have done is apply digital technology to some of the good old ways and cut costs," he says. ..."
Thanks go to John Walker for drawing my attention to this development.