A Guide To Auction v Private Sale in the Art Market

The sale of original masterpieces, such as large scale canvases by Picasso, Monet and da Vinci are wonderful examples of how the spectacle of auction works its traditional magic.

:You only have to watch the Evening Sales at Christie's, Sotheby's and Phillips to see how the saleroom, telephone and internet full of bidders create drama to allow prices to soar for collectors looking for once-in-a-lifetime opportunities to acquire a specific work - these sales are significant moments in history. Watch the breathtaking $450 million (including buyer's premium) sale of Salvator Mundi, before it generated headlines across the world:

However, while auction houses like Christie’s and Sotheby’s have sourced and sold some exceptionally rare prints at record-breaking prices – such as Sotheby’s Girl With Balloon – Colour AP (Gold) for £1.1million, estimated at just £400,000-600,000 – the fees collectors pay to sell a Banksy print at auction at this level can be staggering.

The return at auction is also rarely better than is the same work was sold on the private market. Sadly in more recent auctions, sellers have found work has been 'burnt' - offered without selling, which can cause the work's reputation and therefore value to decrease dramatically.

This can be the outcome of auctions swelling the market and then consigning long into the future due to historical, but not current demand. For instance at the height of the Banksy market in March 2021, Sotheby’s totalled £4.09million across 46 prints, averaging £88,830 a print, while Christie’s totalled £4.46million across 44 prints, averaging £101,392 a print. Now, nearly two years after the first ‘Banksy Only’ sale, the market has become more stable, but sadly this public auction feeding frenzy has driven collectors still hell bent on offering at auction, into a hole.

Sell-through rates for Banksy prints for instance at auction have dropped, meaning works are burnt and sellers are disappointed. You're far better to offer your work at a reputable dealership that can commit to a return you're comfortable and either sell is privately, or hold it without the repetitional risk.

I can not emphasise enough that for a seller, the consequences of their work not selling at public auction can be hugely damaging. A ‘burned’ artwork is judged as undesirable because it failed to find a buyer and, in the short-term, it can decrease in value if it is offered at auction again up for some time depending on it's scarcity. Which in the case of prints, each with a unique edition number is very high risk.

The very nature of editions means there is never just one chance to buy an artwork, making the fundamentals of auction offering once in a lifetime bidding opportunities much less attractive for both buyer and seller.

With editions, if the price isn’t right for the buyer at that moment of sale, and doesn't fit somewhere within the fair market bracket for the work at that time, there is no particular incentive to keep bidding. A prints and editions auction - whether live or online - lacks the once-in-a-lifetime energy reserved for a masterpiece that may well have been in private hands for generations, and is indeed entirely one-of-a-kind. There is always an opportunity elsewhere for a print from the same series.

One can draw parallels between the print market and the designer jewellery or handbags market, the wine and watches market too. The reality is, if the price exceeds fair market value, or the edition number means something to the buyer, only a mug would keep bidding. All the more reason to understand value, scarcity and condition of the print you're looking to bid on.

With major contemporary art collectors looking for the best return on their investments, it’s no wonder the trends are favouring online platforms offering the same global reach and world-class expertise as leading auction houses, for a fraction of the price backed up with the assurance of the exact return, and the exact price tag.

If you are looking to sell your print exactly when you want, without costs, and with assurance of the end result - these are the demands of a growing number of collectors - then auction houses simply can’t accommodate the request, due to their pre-planned calendar and the overheads of running a traditional and expensive auction house model.

At MyArtBroker, our objective is to return you more or the same as you would have at auction, as fast as possible on your terms, and without risk. Our seller’s fees are always at 0%. You have the ability to sell whenever you want, but we advise on the very best time to release the value of your work.

As the largest dedicated prints and editions network in the world, and as a specialist online platform, that audience is undiluted and focuses primarily on getting our clients a better deal.

Sotheby's New Fee Structure

Earlier this year Sotheby's new fee structure, reducing their Buyer's Premium to a flat rate of 20% for purchases with a hammer value up to $6 million and 10% for those above, and standardising their Seller's Commission to 10% up to $500,000 across all categories was intended to give them the edge. It’s worth bearing in mind that seller’s commissions are rarely enforced at 15% for works above $500,000 so it’s a bit of no-news.

However they’ve eliminated a 1% ‘administrative fee’ on all sales (for those that knew about that one. The performance commission for works that sell over high estimates, which can be 1-2% on top, depending on value or performance, has stayed in place.

Having learnt the trade at one of the big three auction houses, I adore auction, as I’ve written about many times before, their flair and drama are second to none, but for the right work.

Charles Stewart, Sotheby’s CEO, said this shift was ‘in response to consistent feedback’ and opened the letter with how it represents the most significant change to their fee structures in more than 40 years. 1984 was the last time Sotheby's reviewed their fee structure.

1984

In 1984, Jean-Michel Basquiat's painting 'Untitled' sold for $19,000 to collectors Jerry and Emily Spiegel. Thirty-three years later, it sold at Sotheby’s for a record $110 million— the most expensive Basquiat ever to hammer.

In 1984, the Washington Post reported that Sotheby’s broke the then world record price at auction with the $10 million sale of Turner’s 'Seascape: Folkestone'. The record now stands at US$450.3 million (which includes commission), paid for Leonardo da Vinci's Salvator Mundi. Christie’s pipped them to that one though in 2017.

1984 was actually the year that Michael Jordan WORE the sneakers that sold at Sotheby’s for $1.5 million 33 years later.

My point is that 40 years is a very long time in the art market. And commissions should perhaps have moved on more that the Sotheby’s gesture this year attempts to do so.

Auctions work by taking food off both sides of the table: firstly a commission off the seller: to sell, you’ll pay 15% of the hammer price sometimes plus marketing, cataloguing, shipping, insurance and storage fees which you can have waived for higher value works; and to buy, you’ll pay 25% of the hammer price plus VAT on that Buyers Premium. If the artwork sells for well over the high estimate you could also be subject to a 1-2% performance commission. The traditional auction model takes food off both sides of the table.

If you want to buy at auction:

1. Wait for the auction date and either be there in person, on a pre-arranged call with a specialist, or you can be logged in online at the right time at the right lot (they recommend allowing 60-100 lots per hour). Or you can leave an absentee bid and keep your fingers crossed.
2. Be in the right place, on the right bid, at the right time, it is essential.
3. Remember to have done your research on the price and the work you're bidding on, and know the top bid that you’re willing to pay, (add 30%) and stick to it.

If you want to sell at auction:

1. Choose an auction house and email them, or submit an online form. First off is the task of finding the right auction for your print, this will be in consultation with one of the house’s specialists, who will normally want to see your work in person. They will advise on pricing strategy, and then suggest which sale would be best for it.
2. Once everything is decided between you and the specialist, an administrator will contact you with your paperwork. It will then be up to you to manage and pay for your work to be shipped to the auction house’s storage facility ahead of the auction.
3. The next auction will likely be a few months down the line as auction seasons are static. Even if the auction is soon, consignment deadlines are usually 2 to 3 months prior so be prepared to wait.
4. You may be asked, particularly with a print sale, to wait until the next auction after the one upcoming, especially if the house has a print from the same series already consigned. This is in order for two prints from the same series or portfolio don’t depreciate each other in the same sale.
5. If your work sells at auction, you'll be notified at what amount and you will receive payment a few weeks after the sale completes. Auction houses such as Christie’s also charge a 2% Performance Commission fee in the event that your print sells for above the high estimate you agreed upon consignment.
6. If your work doesn’t sell, you’ll be expected to manage and pay for the safe return of your work, and pay the unsold fees to the auction house – often 1.5% of the average of the high and low estimate they list it at. You will then have anything from two weeks to one month to collect the unsold work from their storage facility before it starts accruing storage fees which can be hefty.

Because our business at MyArtBroker is leaner, we can offer 0% seller’s fee, guaranteed, with no hidden extras. You agree the price you'd like to return and we either promise to sell it and return that or not in which case we won't take on the consignment.

Having amassed an extraordinary community of buyers and sellers in the print market over 20 years, it’s not difficult for us to find the right buyer for a work, and supported by digital innovation unlike our competitors, we offer 0% to our sellers, simply because we can.

We make our margin on the buyer's side, but because our competitors charge buyers up to 30% on top of the final bit, we can operate more economically and offer them a better deal too.

How it works at MyArtBroker

1. You make contact, and we assign you a dedicated specialist in that field. It's worth noting that all our specialists come, almost exclusively, from auction houses, so you can expect the same expertise.
2. You agree on a price, we condition check the work, check provenance, and then offer your work immediately privately to our collectors.
3. Once a buyer is found and the funds are cleared, we pay, and help ship the work from our conservators, no storage facility needed. That’s it.
4. We do not hold you to a date to offer your work, nor do we charge for marketing it to our 30,000-strong collector network.

How does MyArtBroker offer this service at 0% and auction houses can’t?

There is no magic, we benefit from remaining niche and serving a more concentrated market place. Having operated in the editions market since 2010, we’ve been listening to our buyers and sellers and adapted the platform and network in a way that’s important to make it work for all.

Our optimised model means we have very few of the same overheads attached to running a traditional auction house, allowing us to invest heavily in digital innovation, print market specialism, and marketing works to our network.

When it comes to selling your artwork, to get the best price, it all comes down to accessing a niche market with a specific network of collectors. If you have a print to sell, you are far better off going to a specialist in the print market than you are going to an auction house, whose collectors are interested in much broader categories of artworks.

For buyers, we offer you the time to carefully consider each purchase without the pressures of a live auction, and we can bring a greater selection of artworks to market in a simple, secure way. Our brokers are specialists in their fields and we act as a conduit between you and sellers. We also pride ourselves on balanced market advice to first-time buyers and sellers.

If you’re planning to sell your prints yourself online, we recommend you speak to experts first and do not try to enter this field alone. Art will always be a tangible and very personal investment – online platforms alone, no matter how smart, will not be enough to cater to the new collecting market or the previous generation of collectors with substantial inventory.

When you buy or sell with MyArtBroker, an experienced specialist can guide you through the whole process, find the right artwork or buyer, and even handle the process of deeper authentication, price negotiation, and post sale logistics.

Use a secure platform, read the testimonials and speak to experts. Although there is growing trust in the online art trade, platforms such as eBay, Artsy and others, still stumble when it comes to the issue of artist authenticity and value. Many of the markets we work in are sadly riddled with fakes. Buying through a fine art professional should offer absolute assurance and our specialist can help guide you in the right direction, for free as this is advice all collectors should have as a right.

We offer the opportunity to post listings for wanted artworks within a global community of buyers and sellers on the trading floor – ideal for collectors searching for particular works that are more difficult to come by.

With 75% of new online buyers stating that they were driven by value potential more than any other motivator, it’s easy to see why both buyers and sellers are moving away from the traditional auction house, and towards online private sales.