The New Cost of Selling at Auction

In a very controversial move, Sotheby's have announced the implantation of a tiered selling commission structure. This translates into fixed fees that are no longer negotiable unless the consignment exceeds $50 million. Additionally, Sotheby’s has introduced what it has called a ‘success fee’, where the auction house will take an additional 2% commission on any hammer price that exceeds the high estimate.

The introduction of fixed vendor’s commission has removed the most powerful negotiating tool that specialists can use when trying to convince a vendor to consign with them. Indeed, previously the buyer’s premium has risen so that vendor’s commission can fall (or be negotiated down). It is widely understood that the hardest job an auction house specialist faces is obtaining good consignments for their auction.

Moreover, much of the art world is built on long-standing relationships. If a high-end VIP client who has worked with a specialist for decades is now told that they must abide by the same commission as everyone else, one can certainly expect some backlash.

In 1975 Sotheby’s and Christie’s introduced buyer’s fees which, over the years have grown from 10% to 27% in some cases.

Sotheby’s has now announced that their buyer’s fees will be 20% up to $6 million and 10% on the portion of the hammer price exceeding $6 million.

Previously at Sotheby’s, buyer’s fees would be charged up to 27% (including the 1% admin fee).

To bring these buyer’s fees down, inevitably the seller’s fees have increased.