Why are auctioneers so proud of their ignorance? I just received a flyer from Christies – Chinese Art at South Kensington. Three of the items shown fetched more than TEN times the estimates! I know it’s difficult with Chinese things at the moment, but we’ve all seen items estimated at a few thousands, or even a few hundreds, go for hundreds of thousands. Is this something to boast about, as they invariably do in their next catalogue or hand-out, or newspaper article? Shouldn’t they rather be embarrassed by their ignorance and lack of research? Whilst auctioneers are deducting nearly half the gross without taking the risk of putting their money down, they leave it to buyers to tell them what something is worth.
Adam Hutter
July 17, 2012
Dear Mr. Harris
I think you are missing the point here, even though you have stated it clear as day. As an auctioneer myself, the items people are most interested in are the anomolies, the surprises, the shockers at auction. When people ask us questions, it invariably starts with, what has been your biggest surprise ever? Nobody cares about the million dollar painting that was supposed to fetch million dollars and did, they always want to hear of the vase that was estimated at one thousand, that brought sixty seven thousand!
Who cares if the Yankees win again (I am not a Yankee fan by the way), but if they are upset by the cellar-dweller Cubs, that IS NEWS and people want to know! Let me rephrase that, who cares if Brazil wins the World cup again, but if they are upset by the Ukraine? EVERYONE WANTS TO KNOW!
Same premise here. If items always sell for what the auctioneers estimate them for, then the auctioneers are smarter than the dealers and the collectors? Really? That would make the auction biz quite boring. The dealers ARE supposed to know more. There is a reason why auction house employees leave the houses to become private dealers, they know more!
Surprises attract attention. The flyer (as you put it) is marketing, that’s all. It has nothing to do with pride, ignorance, or naivite, It is just meant to say in a friendly, almost pretending to be an innocent way, “Hey, come see us, and see if you can discover the next surprise”.
Your last half sentence, letting the buyers tell them what something is worth. You’re darn right! The buyers DO tell the auctioneers what something is worth, and if an auctioneer has half a brain (or a desire to stay in business), she or he better listen and listen good! The buyer is king in the auction world. That flyer is aimed at that buyer! “Come see what your other buyer friends are discovering at (name your house).
Remember, that supposed half of the gross (30 – 40% really) has a lot of costs to it too. Rent, flyers, employees, insurance (more than you can imagine) and think of the items that are passed and the risks the houses take in being agressive to get those items like no buy in fees, and advertising! There is a tremendous amount of cost involved. Dealers mark up items they have acquired between 100 to 500% over what they paid for items. Auction houses risk more than you might think.
But thank you for brining up our ignorance. This is a prime example of how ignorance can be bliss. Except when that million dollar painting doesn’t sell!
Ian Harris
July 17, 2012
Of course, I expected a spirited defence! Most dealers are happy with a 100% mark-up, unless they’ve bought something very cheaply. They have all the overheads that auctioneers have, but, most of all, they are risking their own money. How did auctioneers manage to make a profit in the days of 10% commissions, no buyers’ premiums, manual book-keeping etc? They still had their overhead costs, as today. But your premise is that dog bites man is no news, man bites dog is!
Lewis Baer
July 18, 2012
Ian,
You hit the nail on the head. Before the BP was implemented in the mid 1970′s how else did auctioneers get any revenue? Were they not advertising, had the same overhead of staff, rent, etc, etc. How did so many auctioneers survive back then, with just a seller’s commission.
Unfortunately for me, I started in this industry before the corruption of the buyer’s premium made conflicts of interest and deception a systemic part of the auctioneer’s methods. Yes, dealers were convicted of pooling bids to restrict competitive bidding, but the fraud perpetrated by auctioneers on bidders with a secret reserve does the same thing. Is restricting bidding any less a crime than taking false bids?
Adam, you have no one to blame but the Sotheby’s/Christie’s duopoly. They corrupted the process and still think of ways to take it to another level (irrevocable bidding). The way they manipulated the industry is no different than how big banks controlled pegging LIBOR rates; if they can do it and not get caught, why not.
At the end of the day, it’s not what an auctioneer knows when giving a valuation; market forces create a price at any given time. Also, if I don’t trust myself (it is my money) why should I trust an auctioneer?
Lisa
July 18, 2012
This is an interesting observation, which hardly anyone thinks.
As it is well known that demand decides the price, if there is enough money available to invest prices will go up, which can also take place unexpectedly. I have observed that demand for treasure assets is not controlable at the moment. On one hand, investors make up their minds how much they are willing to invest but at the end the price paid depends very much on the expectation and behavior of the other bidders.
Let’s think about the game theory, the best scenario for bidders would be if they were cooperating. But as investors “gamble” for enormous sums of money, they would never do so officially and therefore, they do pity themselves against each other.
Looking at the current state of the art market it is possible to say that art as become a currency for the superrich.
@Adam
I do agree that surprise plays a big component in terms of staging a successful auction. I would say this is due to the excellent Press Offices of auction houses and PRs who are doing a great job. Would you say that if a painting does not sell this could be due to bad advertising, PR or a bad media cooperation?
Lisa
Fay Thomson
July 19, 2012
I don’t feel a lot of trust of auctioneers. With their barking voices, they are full of confidence and surety. They scare me and I have to take a son along to do any bidding for me.
Antiks
July 21, 2012
Having listened to this debate for years now, and seeing yet further complications being thrown into the mix ( price databases and on-line selling sites specifically, as well as a more global market), it appears that the trenches have been dug yet deeper than ever. The fact remains that none of the venues (on-line or off) solves the underlying problem – an overall shortage of buyers and rapidly increasing costs of doing business.
In terms of selling, both sides of the equation offer up their presently best options – auction houses: the excitement of constantly changing material, sometimes prestigious provenance and the possibility for ‘getting a deal’. Dealers: depth of inventory, education (and this need will never go away if we wish to expand the circle of buyers), street presence, and beautiful presentation.
Given that price databases are not a reliable indication of true value (they do not include dealer sales, private treaty sales or the multitude of pieces which never make it to auction due to careful vetting of what does), for myself they seem to be more of barrier to understanding antiques or even supporting a healthy market. This is not so much a ‘democratization’ of the market (which is nothing but a buzz word), but rather the addition of yet another layer of confusion to an industry which can appear daunting to an average consumer.
FYI – Lewis – There is now a sales site which now charges both the dealer to list and offers shopping services to buyers (at a significant percentage), so clearly the on-line venue is not exactly flourishing either, or have the best interests of dealers in mind.
So, you do have to wonder why we are heading down this path, and what should be done to best gain exposure for the material in a healthier, more productive way. But it is safe to say that the age old love/hate relationship between auction houses and dealers is only the tip of the iceberg at this point.