As I mentioned in my prior blog, Sotheby’s (and one would expect Christie’s to follow) is abandoning the market for items that do not have a threshold value of at least $5,000.00. On the surface this should win consignments for the second and third tier auctioneers. But of course they will have to pay a price for this opportunity. If they want a referral from Sotheby’s or Christie’s for these lower value items, I would expect that they would require reciprocating referrals of higher priced items back to them.
This situation could present some interesting issues for the consigner, stuck in the middle. Just how much will consigners allow their merchandise to be divvied up between auctioneers? For dealers this could be a long awaited opportunity.
The chase for consignments has long been the over arching method of business for auctioneers while dealers have usually pursued the investment in inventory strategy. Now the lines are being overtly blurred with auctioneers taking investment positions in the merchandise they auction, and even own and operate stocking dealers. Of course the conflicts of interest and deception with their methods are clearly calling out for regulation. But by abandoning this small in dollar but large in inventory segment, dealers should now be aggressively thinking of pursuing the consignment system.
The void in this middle market price point also gives the dealers the added satisfaction that they don’t have Sotheby’s to compete with for merchandise, and this too may make consigners consider the potential opportunities a dealer can offer. The easy rush to just give it to Sotheby’s will no longer be an option. However the key for dealers will be to make a compelling argument to consigners that we can create a plan to deliver marketing, sales, and price results.
This is an exciting new development and a challenge that could actually be the one chance dealers have to change the way they operate, the way they compete, and the way for industry dynamics to fill a void that Sotheby’s finds to inefficient to maintain.