Auction Performance Fee

The Art Newspaper reports on Christie's new sellers commission of 2% should the lot sell over the high estimate. Auction houses continue to look for strong consignments, as well as ways to cut costs and increase income  the new sellers performance premium is an interesting concept. I suppose a seller is less likely to complain should the lot do well and exceed the high estimate,

The Art Newspaper reports
New premium from sellers if auction house beats estimates

Christie's has snuck a new commission into its contracts with consignors: 2% of the hammer price of a work that meets or exceeds its high estimate. In the UK, sellers at Christie's currently pay between 10% and 15% commission on individual lots worth under £60,000.

After this, commission is charged as a percentage of the final hammer price, sliding down from 8% to 2% until the £3m mark, at which point the commission is officially ‘as agreed’.

However, the sellers' fees are more flexible than the fixed fees for buyers (between 12% and 25%) and ‘as agreed’ can often mean waiving the commission completely, including for lots priced at under £3m when the consignor is a preferred client. This new commission, which came into force in late August, guarantees Christie's a cut from both sides of the equation when all works sell well.

"The purpose is to incentivise and reward high performance that exceeds consignors' expectations," says Paddy Feeny, Christie's head of communications. The fee does not apply to online only sales, he adds.

Sotheby's, whose commissions are otherwise broadly the same as Christie's, has not standardised a performance-based fee in its contracts but, says a spokeswoman, such incentives "are one of the topics discussed with consignors on an individual basis". 
Source: The Artnewspaper

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