No one is more thankful than me as to how 1stdibs single handily took on the industry’s challenge and hijacking by the Sotheby’s/Christie’s auction methods. The duopoly’s goal was to take away the dealer market by imposing a profit gouging buyer’s premium. Consumers could pay it as they weren’t concerned about a profit. Well fast forward and see how successful that approach was for the health of the industry at large. They got the sales but they killed the secondary market, which was totally dealer supported. Yes, profits are important for dealers to survive.
Given the state of the antiques and decorative arts market, the auction side is equally decimated as the dealers, as a pronounced change in taste and style preference has left a fractured price and market structure. In comes 1stdibs to re-balance the market and reignite the discovery of these items to a new and wider audience, beyond the scope of any single dealer or group of dealers, shows, or auctioneer. With the dearth of large or even moderate sized dealers that have a brick-and-mortar establishment, the virtual option for every buyer or seller is a necessity.
The parallel between a 1stdibs and the Sotheby’s/Christie’s duopoly is quite compelling and full of similarities. All three are giants in the industry and have developed their own brand name and broad recognition. They also play by the rules that they can make, alter, or rework. How many times was the buyer’s premium altered and changed since it was instituted? It seems like every 6 months (or was it Christie’s then Sotheby’s one upping each other). 1stdibs, because it lacks even a competitor can and is planning massive changes to its format that again has the brunt of the adjustments coming down on the dealers.
The question becomes what does a dealer or group of dealers do to leverage the effects of 1stdibs new way of doing business. For all practical reason there is little or nothing they can do. History has a way of repeating itself, as when dealer organizations blinked at the introduction of the buyer’s premium and watched as it metastasized. The auctioneers did fine, thank you, at the dealers’ expense but all ships rise in a high tide, which is where the market for all the decorative art was going in the last quarter of the 20th Century.
Now the trade, or what’s left of it (being mostly 20th Century dealers) has a fork in the road. Dealer’s paid that buyer’s premium until there were almost none left to pay it and the secondary market died. Should they pay and play by the new 1stdibs rules? It’s hard to fight the 800-pound gorilla in the room, but the market forces which coalesced around 1stdibs can and will evolve. New competition will and is coming, or it could be a matter of a change in taste.
The new 1stdibs plan is both practical and necessary for them at this time. Their present model is too labor and advertising intensive and requires a real need for rising sales and profitability to sustain growth. Their new approach is an attempt to assert their competitive lock on how sales take place. Remember, they don’t want to own the merchandise, they just want to skim a profit off the sale, which isn’t on the face of it wrong. However, it’s a different kind of profit and risk reward when you own the goods. Restraining trade through arbitrary methods of restricting access to buyers is a disconcerting development that goes beyond the conflict of interest created with the auctioneer’s buyer’s premium.