New Interest in Online Art Sales

The New York Times has an interesting look at online art sales and auction.  The article focuses primarily on Artnet which has now sold more than 6,500 pieces, with $12 million in sales and $2.5 million in commissions.  The average price paid according to the NY Times is now $6,800.00, up from $5,600.00 last year. Artnet charges a 15% buyers premium and a 10% sellers premium.

Both Artnet and Sotheby's have tried these types of online auctions in the past, and both lost a lot of money.  Perhaps Artnet, as well as other groups such as the VIP Art Fair (AW Blog posted on this online art fair) and Art.sy will make the online sales model work.  More people and collectors are now more comfortable bidding and buying online than they were just a few short years ago. It appears that Artnet may be finding a very nice niche market online with second tier works.

The NY Times reports

But the company’s online auction business has now moved more than 6,500 pieces, generating $2.5 million in commissions on $12 million in sales for Artnet in 2010, including a few high-dollar outliers, like a Richard Prince painting that sold for $295,000 (before commissions). The business is not yet profitable for Artnet, but the company says that is only because it has been spending considerable money to develop the auctions. It projects that they will begin to turn a profit toward the end of next year.

“Now it seems that the technology has reached a point, and the market has evolved to a point, where this kind of business is really gaining traction,” said Mr. Moriarty, a former lawyer for the Securities and Exchange Commission. Of Artnet, he added, “It’s not going to be long before they’re going to have to worry about a lot of competition.”

If Mr. Sledge is any guide, art buyers still need a little live reassurance from human beings that what they are seeing and reading about on the screen is what it appears to be. The former East Village art dealer Gracie Mansion, who now works as a specialist for Artnet’s auctions, speaks often with Mr. Sledge when he has questions.

“She’ll go and take a close look at the information she has and tell me there’s some foxing on it or some other problem,” said Mr. Sledge, whose name was provided to a reporter by Artnet, along with those of several other frequent buyers. “I didn’t even know what foxing was, to tell you the truth.” (It refers to spots or browning on paper works.)

He added, however, that his main reason for starting to buy through online auctions (one recent acquisition was a small Elaine de Kooning work on paper) was the prices: “My sense is that a lot of the sellers aren’t taking a haircut by having to go through galleries, and so those savings are coming to me.”
To read the complete NY Times article, click HERE.

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