In order to survive in the modern world, it’s now essential for businesses to adapt themselves to the Internet. Many auction houses have started to recognise the benefits of Internet sales, and have already made tentative steps towards expanding online.
Whereas at one time auction houses were reluctant even to allow telephone bidding, now half of UK auction houses utilise live auction webcasting. The recent success of Christie’s first forays into online-exclusive auctioning as well as a new crop of Internet auction houses got us thinking about the viability of auction houses venturing one step further, into the realm of online-only auctioning.
If venerable auction house Christie’s is anything to go by, online-only auctions have a bright future. The online-only portion of the firm’s Elizabeth Taylor Collection brought in a total of $9.5 million – dramatically exceeding the $1 million estimate. This was followed by their first exclusively-online auction this September, bringing in an impressive $819,715. However, Christie’s has no intention of allowing Internet auctions to become their dominant method of buying and selling. Rather, the auction house uses their online-only auctions as “a regular addition to Christie’s calendar of traditional live auctions”.
Yet there is a new breed of online auction houses that do operate entirely on the Internet. The most recent example is that of British & Continental Pictures. The brainchild of George Duckett and militaria auctioneer Thomas Del Mar, so far the online auction house plans to limit their activities to two sales a year. However, if their first auction this December goes well the business may be developed further. Rather than using eBay-style timed auctions, the firm intends to mirror the format of a traditional live auction. According to Duckett, “web-based sales will provide a more accessible entry-point to the world of auction houses for the general public”.
The successful India-based auction house Saffronart and the long-established Artnet are more well-known examples of this phenomenon. Originally an art database, in 2008 Artnet expanded into online auctions. The site offers 24/7 online auctions of fine art and prints. After suffering an initial decline in profits, it has seen a rise in interest and the company now turns over more than $13 million a year.
Saffronart was founded in 2000 and is now a highly successful global business allowing customers to browse, purchase and take part in the development of Indian art. The company has even been the subject of a case study in Harvard Business Review. ”The Saffronart model is very different from that of a live auction. Apart from their extended time span, a host of online features make our auctions of art and jewellery an easy and unique way for collectors to acquire new pieces for their collections,” says co-founder Minal Vazirani.
As well as the success stories there have also been failures. Auction Atrium, founded in 2006, seemed at its peak as though it might one day become an online competitor to the likes of Bonham’s and Sotheby’s. Cashing in on the growing Chinese market, the firm once turned over half a million in a single specialist sale. Then, in February this year, the company came to a sudden end, abruptly ceasing business in the middle of their popular “Kensington Sale”. It is thought the online auction house still owed over £100, 000 to consignors.
Overall, it seems the time may not yet be right for high-end auction houses to exist entirely online. Nonetheless, traditional auction houses are beginning to explore the benefits of holding online-exclusive auctions in addition to their main live sales. And for the most part, it seems these online-only auctions are popular with both buyers and sellers. After all, they offer many positives – lower transaction costs, wider audiences, easier accessibility…. It’s an exciting time and we hope to see this area of auctioning develop further in the future.
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