HOW TO TAKE PART IN ONLINE AUCTIONS
Short guid to online auction
The purchase of works of art on the online platforms of auction houses has been a real business for several years, which has undergone a surge in use with the imposition of the lockdown for the Coronavirus emergency.
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However, according to the analysis carried out by Artnet, auction sales fell by 75.8% in March 2020 compared to the same month in 2019. Last month, in fact, auction houses all over the world sold works of art. $ 227.6 million worth of art, down from $ 939.3 million in March 2019. The slump is even more dramatic considering that sales were $ 1.2 billion in March 2018.
Of course these numbers are to be evaluated with the new dynamics of supply and demand, where the latter has seen the cancellation of high value sales, postponed to June in most cases, with a preference for works of art and multiples whose values do not exceed, if not in some cases, the $ 10 thousand.
In 2019, the Sotheby’s auction house sold around $ 250 million in artwork and luxury goods online through a mix of live and dedicated online sales. Of these, $ 80 million was made from 9,000 lots sold in 129 dedicated online auctions – 55% more than 2018.
Since the start of the lockdown (March 28), Patrick Drahi’s auction house has carried out 23 online auctions that have made $ 44.5 million (over half of Sotheby’s total annual $ 80 million for dedicated online sales in the 2019).
By focusing on online sales, an emerging phenomenon has also developed, that of cross-collecting, i.e. the purchase of collectibles ranging from ancient to contemporary art, to luxury bags, to design up to watches . Auction houses are today considered the most reliable intermediaries online, certainly because they are capable of offering high quality works; in addition, many of these have invested in technological implementation, making the online bidding system more transparent for the user.
For example, the Sotheby’s website allows you to see not only the last offer made by the other competitors, but also whether the last one exceeded the reserve price or not. Here is a short guide to help the collector participate in online auctions: To register for an online auction, you need to register through the auction house website, creating your own account and providing the required documentation (identification and bank details)
The difference between a traditional and an online auction is represented by the negotiations that take place virtually and by the possibility of monitoring prices already in the pre-auction phase. In fact, the current bid appears next to the lots, or the highest bid received for each work.
Online-only auctions are generally dedicated to multiples or lots of smaller value.
Even on online portals it is possible to insert an offer by proxy (or absentee bid), through which the auctioneer can make offers on behalf of absent people. In this case, the system automatically generates raises every time an offer is made by another user, until the maximum amount indicated is reached. If the maximum bid is exceeded, the user will receive notification from the system to re-launch or set a new limit for automatic bidding.
Attention to the Buyer’s Premium, commission rates applied to the buyer in addition to the hammer price. Each auction house applies different commission percentages based on locations and cost ranges.
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Today online sales are proving to be an important tool for expanding their collection of collectors and among the strategic choices there is the one made by Sotheby’s which, in exclusively online auctions, has chosen to eliminate the sales commissions on the purchased lots from the buyer and establish for the seller a 10% commission to decrease.
A new competitive landscape to explore.
Are you ready to participate in online auctions?
