Sotheby's drops Buyer's Premium in online-only sales
In a bold statement of intent, Sotheby's CEO Tad Smith announced the company's growing commitment to online sales channel in a letter dated August 22 to clients and shareholders:
[W]e are eliminating the Buyer’s Premium entirely for our “online-only” sales. Last year, we held 16 such sales, and we are on track this year to double that number. These sales are now our best tool for attracting first time buyers and we were encouraged to see that approximately 20% of new clients acquired through these sales have subsequently participated in our live auctions.
The online marketplace is a related, yet distinct business 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. We expect the elimination of the buyer’s premium to simplify the auction process for buyers and enable us to reach an even larger audience of participants. As a result, we will achieve higher prices and greater returns for our online-only sellers and we will continue to charge a Vendor’s Commission for that service. This new approach for our “online only” sales will be effective as of the Contemporary Art Online auction opening for bidding on September 16, 2017.