Rising Commissions

Dealer opinion on the latest increase of commission by the auction houses has predictably inspired outrage. What it says to me is that the auction houses are in crisis. As an English furniture dealer, I see a diminishment of product that yields four sales per year between Sotheby’s and Christie’s in New York while the huge expense of staff, handling, space requirements, etc. argue against the continuation of an English furniture department altogether. This is true in other areas besides English furniture.

Sotheby’s answer to the crisis was to discontinue the sale of any item they thought worth less than $5,000, an action that has to be troubling to many of the diverse departments. Christie’s answer was to raise their buyer’s premium to twenty-five percent on the first $20,000 on any item. Christie’s, I believe, is delighted that Sotheby’s has gone up market as it clearly backs them into a corner as half the battle is getting people to come to the auction house. More product on offer at greater price ranges, more people will come. Sotheby’s has taken advantage of Christie’s auction and raised their premium similarly. Were they not making enough money before and if they weren’t, don’t they think that bidders will be deterred just a little bit? It smells of trouble to me.

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