Sotheby’s announced in a press release that, for the third year in a row, it will increase its buyer’s premiums for its live auction sales. Tweaks to the policies for fees, which allow the house to tack an extra charge onto the price of a work sold at auction, will go into effect November 1, ahead of its sales in New York.
The shift in fee rates comes a year after the last adjustment, and just weeks after Sotheby’s announced in its quarterly earnings call that sales were down 14 percent from the same period a year before.
The changes are as follows. There will be a 25-percent levy on work priced at $300,000 or below. Previously, the same fee extended only to works priced up to $250,000, so the new change increases the amount of work that will be slapped with the highest possible fee. The threshold for 20-percent fees now applies to works purchased for prices between $300,000 and $3 million. The fee for works priced at $3 million and higher is now 12.9 percent, up from 12.5 percent.
In the same release, Sotheby’s also announced that it would eliminate buyer’s premiums for work purchased during online-only sales, as a way to encourage more budding collectors to bid for the first time. Online sales are frequently mentioned during quarterly earnings calls as potential growth areas—Sotheby’s has said that 45 percent of bids online come from first-time buyers, and that those rookies can sometimes be convinced to make the leap to live sales soon thereafter.
“Online-only sales have emerged as our best tool for attracting first-time buyers and we see those new clients subsequently participating in other areas of our business at a meaningful level,” David Goodman, Sotheby’s executive vice president of digital development and marketing, said in a statement. “It’s clear that the online marketplace is a related yet distinct opportunity for Sotheby’s beyond our live auctions—one with a different competitive landscape and reduced traditional expenses—that demands a different approach to pricing.”
The move goes into effect with Sotheby’s online-only contemporary art sale, which starts September 16, and it could allow Sotheby’s to draw up-and-coming collectors reluctant to bid on work at houses still charging premiums for online sales.
Additionally, Sotheby’s clarified that, when a client successfully secures a work while bidding online during a live auction sale—an occurrence that can still strike old-guard gavel-wielders in the salesroom as odd—the full buyer’s premium will be charged.