Online auctions are not a new concept, after all, eBay has had great success in this market place since the mid-1990s when, operating then as Auctionweb, facilitated the sale of the first product, a broken laser pointer, for $14.83.
In recent times, other online auction sites such as Paddle 8, the auction site tasked with delivering the Wu Tang Clan's Once Upon A Time in Shaolin Album, have had great success in delivering highly sought after works of art to the public.
Details have now been released of two separate online auction platforms fronted by Tim Goodman of Fine Art Bourse (FAB) and Simon de Pury of Phillips de Pury & Company that are entering the digital auctioneering domain with a pricing model set up to entice buyers and sellers alike.
Fine Art Bourse's offering charge the vendor and buyer a 5% fee with a 72 hour packing and shipping service. In addition to this, the transactions would be exempt from sales taxes as well as artist resale royalty fees on the grounds that the auctioneering occurs in Hong Kong.
In contrast, the de Pury model chargers buyers a reduced premium of 15% on purchases up to $2m, and a premium of 12% on purchases over $2m.
Whilst the de Pury model offers buyers the opportunity to view the products in advance of sale at a Mayfair venue, both enterprises appear keen to pass on to their clients the benefits that come with not having a fixed abode and the financial overheads that come with that.
In relation to Fine Art Bourse, because the auction takes place in Hong Kong, the website boasts that the "transaction and transfer of title from seller to buyer therefore is not subject to taxation (VAT).", nor is there a requirement for the payment of artistic resale royalties.
Artistic Resale Right is a means by which authors of works of art are entitled to a royalty payment in their works sold at auction. The graduated royalty payment is as follows:
4% of resale price up to €50,000 3% of resale fee between €50,000.01 and €200,000 1% of resale fee between €200,000.01 and €350,000 5% of resale fee between €350,000.01 and €500, 000 25 of resale fee over €500,000
The right in this royalty runs parallel to the right of copyright, so life of author plus 70 years, and although capped at €12,500 can represent a significant source of income for authors of the work.
Should these new forms of online auctioneering prove successful, it may be that the days of the bricks and mortar auction house are numbered as competitors go digital in their dealings in an attempt to compete.
As reported in Antiques Trade Gazette, Tim Goodman is of the belief that the traditional auction house is no longer sustainable: "Something has to give. All we have done is apply digital technology to some of the good old ways and cut costs."in: Copyright, News