The Financial Times is reporting on a new model for an auction house being offered by Australian entrepreneur Tim Goodman. Goodman had partnered with Bonhams and ran a licensed Sotheby's operation in Australia. The new auction house called Fine Art Bourse of FAB will soon be opening international offices and work with a select group of specialists, and will reduce costs by keeping office rents low, limited number of specialists and reduced printing. Goodman has already raised $2 million and is looking for an additional $5.4 million to expand and promote.
The FT reports commissions to be "5 percent to buyers and sellers, plus 1 per cent for insurance and a flat charge of $330 for photography, cataloguing and so on ($1,000 for items worth more than $100,000)."
The auctions will based in Hong Kong (“No sales tax, no resale royalty, no copyright fees”), the sales will be online with a 30 second buying window to bid and sold consignments will carry a five year guarantee. It will be interesting to see how FAB does over the coming months.
The Financial Times reports
Source: The Financial TimesChallenging traditional auction houses, lending, and a media storm over a ‘flipper’
Bolstered by his 40 years’ experience of auctioneering and digital initiatives, Australian entrepreneur Tim Goodman is launching what he says is a game-changer in the field of auctioneering. FAB (Fine Art Bourse), which goes online next month, is a “global” auction house offering sharply reduced fees, a broad geographical reach and an alternative to the traditional firms in this field, according to its founder.
Goodman’s long experience comes from partnering with Bonhams and from running Sotheby’s under licence in Australia, along with owning three other salerooms, all of which he has now left. “I believe the future lies in a new business model for fine art auctioneering,” he says. “My model lies in slashing costs in three areas: bricks and mortar, human resources and printing.” He has raised $2m in seed capital and is looking to raise a further $5.4m to fund growth.
His company is based in “humble” (his words) premises in London’s Finsbury Park, and similarly low-cost offices will be opened in New York, Hong Kong and Beijing over the next 18 months. Consultant specialists around the world — there are already 21, a number Goodman says will grow to 60 by this summer — will source, value and catalogue the works, with just a small team of executives running the company. And there will be no weighty catalogues thudding on to doormats: “It is ridiculous, they cost a fortune and are terrible for the environment.”
These economies will enable FAB to offer pared-down fees of just 5 per cent to buyers and sellers, plus 1 per cent for insurance and a flat charge of $330 for photography, cataloguing and so on ($1,000 for items worth more than $100,000). The auctions will be run out of Hong Kong (“No sales tax, no resale royalty, no copyright fees”); buyers can browse offerings online and then have a 30-second window to bid. The firm offers a five-year money-back guarantee in case of problems.
Can it work? Many attempts to challenge the traditional houses have failed but Goodman believes the time is right for his venture: “My target is to have 2 per cent of the market — about $280m — by year four,” he says.
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