Online auctions, and online selling, continued their ineffable rise this week.
Last Wednesday, the BBC reported Saatchi Gallery director Rebecca Wilson’s claim that the institution sells “more art in a month online than most bricks-and-mortar galleries do in a year.” Amazon also plans to get in on the act, with its aim to sell 1,000 art objects on behalf of 125 galleries in the US, a revelation which could send shockwaves across the industry. And last Tuesday, Auctionata set the world record for an online auction sale: £1.56 million ($2.38 million) for Egon Schiele’s Reclining Woman (1916).
Major auction houses have ramped up their online presence in recent years, with online bids vying with live bidders during evening sales for the first time. Plus, of course, there's the swathe of recent web start-ups targeting a variety of price ranges in both primary and secondary markets, from New York’s Paddle8 which launched in May 2011 to Berlin’s Auctionata and the trendy Artsy, fitting in alongside India’s venerable Saffronart. The list goes on: The Spotlist, Art Viatic, and Blacklots (recently taken over by Paddle8) also deal with similar markets.
So why now? According to art world insiders it’s down to improvements in technology that make browsing speed and design more agreeable across multiple platforms: shipping and inventories can be managed at the touch of a button; virtual showrooms are increasingly a possibility, as in the case of Paddle8, whereas Auctionata can live stream an auction room, something that would have been impossible 10 years ago.
At the same time, business models with lower overheads make sense in an economic downturn, especially at the more volatile, cheaper end of the art market. Society has also come to expect the ability to buy quickly and easily, something online marketplaces definitely offer.
“Whilst the majority of auction houses continue to operate using their existing sale model, others are developing online sales without printed sale catalogues and with a timed bidding process,” George Bailey, co-founder of online auction platform The Auction Room, which launched in March 2013, told BLOUIN ARTINFO UK. “As we all become more familiar with transacting online, auction house clients will become increasingly comfortable placing bids without a printed catalogue and an auctioneer, and in some cases without viewing the lots they intend to purchase.”
But can this market absorb the seemingly endless numbers of new players emerging?
“I think Amazon launching an online art gallery would be good news for the primary market, people who work directly with galleries, such as Artsy,” Aditya Julka, Paddle8’s co-founder, told ARTINFO. “We’re a secondary market online auction house so it doesn’t affect us. All our sales are auction sales, and not fixed price, so it’s less of a threat. [Amazon's art initiative] is welcome because it expands the horizon of people who buy art.”
Julka identifies as key drivers of his business the increased security and comfort people have with credit card transactions online, along with the rise of “global collectors” who are keen to seek out new opportunities around the world. “We don’t compete with the auction houses, our price points are different,” he continued, pointing out the lower commissions his site takes compared to the traditional model. “Such commissions create a barrier to liquidity, especially with younger buyers who don’t have as deep pockets, at least in terms of having the option of selling in an easy manner. Rather than making the market volatile, we are expanding it. That helps the market, as it insulates it against the ups and downs, as there are more people involved.”
He claims the traditional bugbear regarding online art sales — not being able to see the work before it’s purchased — is less of a problem when dealing with “established artists,” many of whom are household names (Calder, Warhol, Lichtenstein all feature on Paddle8’s homepage at the time of writing).
The next step is to foster a new breed of cross-disciplinary collector, who are as happy buying cars on eBay as they are picking up design and art elsewhere. To sum up: There’s more than enough business to go around.
“The biggest focus is expanding categories,” concluded Julka. “Online, people tend to collect many different things. They don’t tend to be unidirectional. There is a huge opportunity to service people’s other collecting needs. The low cost online model allows us to do really fun things at the lower end of the market. You’ll see a lot more interesting sales coming through as time goes on.”