Online Art Sales Platforms: Chapter I

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This is the first post in a series about online art sales platforms, which are proving to be remarkable tools for collectors to learn about the art market and acquire work. AKTIONSART actively seeks to optimize new platforms and explore the myriad of ways they enhance the process of building a collection. We will start off by examining a broad overview of art sales websites and comparing their commission rates. While the majority of media coverage lumps such sites into an all-encompassing "art startup" category, let's further distinguish between them as auctions, brokers, distributors and rental programs. These are by no means official industry titles (full disclosure, I made them up two minutes ago), rather are useful generic terms to consider the differences between platforms when evaluating commission. In order to obtain the best price, we want to be knowledgeable about both net price and commission. We also want to know who is guaranteeing authenticity - I will address this further in a future post. Each of the platforms listed below endeavor to fulfill varying market deficiencies within the art industry. Online retailers such as Amazon Art and Artsy are third-party brokers that charge a fee to sell artwork by providing galleries access to substantial networks. They don't represent artists, rather partner with galleries and take a cut of the sale. Distributors represent companies that partner directly with the artist to sell work. Many are currently focusing on digital licensing and print publishing (Exhibition A, s[edition], Saatchi Online, etc). They pay about a 30-50% commission to artists, consistent with the gallery model and online music sales platforms such as iTunes. No additional brokerage commission is charged on top of the listed sales price. To illustrate the subtle differences between these groups, think about a sale on Amazon - a painting is consigned to a gallery (the distributor), who then lists it for sale on Amazon Art (the broker).

This research commenced from my quest to compare commission rates - information which turned out to be inaccessible on several of the key broker sites including Artsy and Artspace. It is not clear here exactly what the fees are and who is paying them. This lack of transparency possibly stems from the understandable necessity of experimentation while sites iron out a sustainable business model. In order to build trust with collectors, however, brokers will soon need to be more forthcoming about rates. Auction houses, on the other hand, have traditionally been extremely transparent about transaction fees and that it is the buyer's responsibility to pay. Their fee is referred to as the "buyer's premium" and is tacked on to the hammer price of each lot sold. After each sale, the final price of each sold lot is published publicly online. This may not remain the case. A disturbing recent trend exemplified by Paddle8 and Christie's (discussed further here on the Financial Times) illustrates how some online auctions refuse to post results as a public record. As Clare McAndrew astutely summarizes in the FT article, “If sales on the internet are not reported, it runs counter to the whole idea of more transparency, and people will lose faith in the data."

Mr. Art Lover

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Magritte

Let's consider a fictional case study - Mr. Art Lover. Wearing his signature bowler hat, he browses Artsy and discovers a painting that he must own. There is no price listed, so he submits the gallery contact form on Artsy and later receives a price from an Artsy Specialist. Now, Mr. Art Lover is rather well read and recalls an article that mentioned Artsy charges a 10-15% commission. He wonders to himself, who is paying this fee - myself or the gallery? If it is indeed himself, isn't he better off circumventing Artsy and calling up the gallery directly or even securing a discount through working with an art advisor? This conundrum also holds true for Amazon Art, which offers works that appear to include the Amazon commission on top of the selling price. Therefore, it can be more expensive to purchase an artwork on Amazon than directly from the gallery. You can learn more about this topic here.

Though not all of the sites clarify their fee structures, with a bit of sleuthing I have compiled an introductory list and breakdown of the top competitors for online art sales and their commission rates. You can also find the list on a handy Pinterest board. Peruse, learn, and please comment below with your thoughts!

1. online auctions

Sotheby's,  New York 25% up to $100,000 20% $100,000 - $2,000,000 12% over $2,000,000 5 Year Authenticity Guarantee

Christie's, New York 25% up to $75,000 20% $75,001 to $1,500,000 12% over $1,500,000 5 Year Authenticity Guarantee

Phillips, United States 25% up to $100,000 20% $100,000 - $2,000,000 12% over $2,000,000 5 Year Authorship Warranty

Artnet 20% under $250,000 10% including and over $250,000 Authenticity Guarantee

1st dibs 20% flat rate No authenticity guarantee, defer to seller warranty

Paddle 8 12% flat rate No authenticity guarantee, defer to seller warranty

Auctionata 20% flat rate 25 Year Authenticity Guarantee

Saffronart 15% up to $500,000 12% over $500,000 Authenticity Guarantee

2. brokers

Amazon Art 20% up to $1,000 15% $1,000 - $5,000 10% $5,000 - $10,000 5% over $10,000 No authenticity guarantee

Artsy 15% up to $10,000 10% over $10,000

ArtspaceWill update later, Artspace did not return my phone call or emails

3. Distributors

No broker fee or buyer's premium, commission to artist included in price

Artfinder - online marketplace, distribute from galleries and individual artists Artstar - print publisher Exhibition A - print publisher Eyestorm - print publisher Minor Asset Saatchi Online - online marketplace for artists to directly sell their work s[edition] - digital edition licensing

4. Rental programs

Artsicle