Have you ever thought of selling your art on eBay? Maybe the price range is little high for some of you, but eBay and Sotherby’s are ganging up to use eBay to sell Artworks in the $5,000 and up range. But as Dr. Susan Grundy points out, there are many questions.
Peter Worsley
by Dr Susan Grundy, CEO at Mnajdra Discerning Fine Art SL., Feb 18, 2015
Sotheby’s and eBay take a gamble
eBay and Sotheby’s announced last year that they would be joining forces to bring the world of high-end antiques-buying to the widest possible audience, as if they were performing some kind of civic duty. And so the concept of live auction streaming on eBay was born.
“We are joining with eBay to make our sales more accessible to the broadest possible audience around the world.”
In almost whispered tones, hushed by the carpeted atmosphere of Sotheby’s inner sanctums where undoubtedly final points were discussed, the pair continued thus:
“A Sotheby’s-eBay partnership is a significant milestone in our efforts to expand the live auction market. Sotheby’s is one of the most respected names in the world. When you combine its inventory with eBay’s technology platform and global reach, we can give people access to the world’s finest, most inspiring items – anytime, anywhere and from any device. That is an experience we believe our customers will love.”
Really? This claim purports to offer “audiences” exciting opportunities to link with wonderful art, antiques and collectibles that they otherwise wouldn’t have had? These registered users are already there (128,000,000 of them) on eBay. If those registered uses really wanted to splurge on extremely expensive art, antiques and collectibles they’d have already found Sotheby’s, and other auction houses. What’s really happening is that eBay is giving auction houses direct access to its 128,000,000 registered users. It is as if they are selling their registered users like Bitcoins.
Reason not the need
Sotheby’s/eBay whole preamble is totally evasive. What must we believe? Should we believe that there is an otherwise neglected “audience” anxiously waiting for this new innovation? Are there registered eBay users who’ve woken up one morning smitten by the idea to have a particular antique table to eat breakfast off and have gone to the old-fashioned eBay site, full of ordinary sellers, and been so bitterly disappointed by lack of choice they’ve whisked their brains in frustration instead of their eggs? Now, hallelujah, live streaming has saved them! What? These 128,000,000 “customers” parked on eBay had never heard of Google (if they really wanted a particular antique table)? Do these registered users have a real need, or is that “need” being created for them?
As eBay fine-tunes its “live auction hub,” registered eBayers should expect to be mugged. My favorite is the hype about “winning” auctions. Who is winning at these auctions, as it clearly isn’t the fool parting with his or her money?
Sotheby’s/eBay press-release masquerades as journalistic fact supposedly aimed at interested customers. But realistically who are these customers who have between 5K and 100K spare to invest in art, antiques and collectibles carrying commissions of up to 50%? In other words, these are not “investments” that will ever recover in the average owner’s lifetimes; even to resale values that surpass the high commissions of the original spend. Sellers and buyers will always be losers in this model, except for the possible intrinsic enjoyment value that may pass to the buyer with the sold lot. (Oh, and don’t forget the rush after “winning” the auction.)
Information by Sotheby’s/eBay prior to their planned launch is hyped and undoubtedly written to attract further investors or reassure shareholders, and has nothing to do with the mugs who are going to throw their hard-earned cash at these corporate giants come auction day. If there are people lining up to bid at a Sotheby’s/eBay auction in the high-end luxury goods market, they really haven’t thought things through.
Have you thought about?
First, what about the commissions? Are Sotheby’s and eBay going to give up portions of their own commissions (in a sharing agreement), or restyle their existing commissioning structures, or lower their commissions? For example, Sotheby’s always charges buyer’s commission, which doesn’t exist on eBay.
Second, what about eBay’s 14–30 day returns policy, which does not exist at Sotheby’s, unless it is really catastrophic failure on their part or dire? Bogus buyers trawl eBay, or so it is reported (see link below).
There are many looking to find ways to scam sellers. In the Sotheby’s/eBay model it is not explained who is going to protect the seller? And talking about scamming sellers, what about putting pressure on buyers, who in the old-fashioned eBay model had time to think about their next bid, days if they needed it? Now everything is going to go down in seconds, and “successful” bidders could be facing the bailiffs if they cannot cough to the final amount. Plenty of time to sweat afterwards though.
Third, what about authenticity? eBay historically relies on the seller, while Sotheby’s uses their own in-house expertise, In other words, who will guarantee the buyer’s purchase: Sotheby’s, eBay or the seller?
Fourth, what about logistics and the pre-consignment of goods? It hasn’t been factored into auction houses typical working practices crossing over with eBay, that most sellers on eBay used not to spend money to consign goods, especially valuable and delicate antiques, for example, before putting them on to auction. These costs must surely be recovered by someone?
Are auction houses going to circumvent their own working practice in the future, and become more like eBay, in that they will remotely control products on their auctions. If they then never have physical contact with the goods they are auctioning, how will these goods be pre-authenticated, or how will they ensure that they are even attracting the best goods? Where then will their guarantees of quality and authenticity come from, in other words, that could not have been achieved before by ordinary eBay’s sellers? Will auction houses, this future model, never have physically touched or laid eyes on the objects they are auctioning? If live eBay auctions have to continue with the established auction house model, that is, the obligatory physical consignment of goods, how does this help the seller to go through Sotheby’s, for example, to get onto eBay?
Fifth, what about existing sellers on eBay? Sotheby’s report joyfully about their acquired access to the 128,000,000 “audience” on eBay. Yet aren’t many of those also traditionally sellers? eBay has built up a huge data base of registered “users” (previously read registered “sellers”) these sitting ducks are now being turned into registered “buyers”, sold off to the highest bidder, in return for huge “joint venture” agreements. Indeed, registered users are eBay’s most valuable asset. Oh, actually, they are eBay’s only asset.
When a customer, buyer or seller, register on eBay, they give vital and important private information, and in return are given one platform, from which to both buy and/or sell. Did any of those registering realize this information was going to then be misappropriated, in other words, handled in such a way that a competitor can aggressively sell to them? What is absolutely for certain, although a “registered seller on eBay” Sotheby’s will never also be a “registered buyer.” The ethos of eBay’s buy and sell fluidity is therein totally compromised in this model, cynically constructed to take advantage of a community of registered users, now just seen as buyers.
Registered scope of business
I am sure nothing in their registered scope of business prevents eBay from registering auction houses like Sotheby’s as eBay “sellers”, but why the special privileges? Indeed these auction houses are now also not only accessing those 128,000,000 happy shoppers, but also competing with potentially 128,000,000 unhappy sellers. One can perhaps understand eBay allowing manufacturers, or distributors, to sign up as business partners, but Sotheby’s is actually their competition. Least any of us forget, Sotheby’s and eBay are marketplaces. They do not manufacture. They do not speculate by buying stock. They do not hold goods for sale. They simply put buyers in touch with sellers, and help sellers to find buyers. They are agents. Nothing more. The only fundamental difference between them is Sotheby’s handles actual physical objects for buyers and sellers, and invests in swanky surroundings, which model surely must be phased out if they are going to succeed in this new joint venture with eBay. It is clear how Sotheby’s will profit. It is clear how eBay will profit. What is not clear is the benefits to buyers and sellers, either the 128,000,000 registered users on eBay, or the reportedly more elite 100,000 who regularly tread Sotheby’s hushed halls. It is clear, however, who is going to pay for this new “venture”, and it isn’t Sotheby’s and eBay. The way I see it, if it all goes sour, the only registered “users” on eBay who will be stuck with them are sellers, business and individuals who have invested in the old model of eBay. The rest of us can just click away from their tawdry site.
Really? How much?
On a final note, despite both Sotheby’s and eBay claiming that this will somehow bring “new opportunities” for people to spend money in the 5K to 100K range of art, collectibles and antiques, I sincerely doubt that this initiative will be driven by sales over 10K (in any currency). This is already one of the most profitable areas for Sotheby’s-style of modern antiques-auctions (with the highest commissions), and also the area where the most unsophisticated and gullible consumers can be fished. The products over 10K at these auctions will be mostly so-called “loss leaders,” deals struck with savvy owners who will have negotiated very low commissions in return for having their highly valued and sought after goods on “auction.” These razzle dazzle lots will be strategically placed and in a bid to excite customers lower down the disposable income bracket.
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