Remember The Buyer’s Premium

I guess if you live long enough you can see everything.  I believe I have witnessed in my career in the art and antiques industry the most seminal decision by an auctioneer to voluntarily forgo the buyer’s premium.  Sotheby’s, you not only see the handwriting on the wall, but now realize new potential in how the market can work.  Offering no buyer’s premium to online sales only, is the most significant auction method change since it was first introduced in the mid 1970s.

In the press release, Sotheby’s acknowledged the economics of the decision to test the waters where there is least resistance and the greatest pool of buyer.  Presently, this is not the marketplace for million dollar works of art, those buyer’s premiums are sacrosanct for the milking of billionaires in the live action dramas of the public performance sale.  Cracking the complete abandonment of the buyer’s premium as opposed to reducing it represents a new business model.  Sotheby’s is developing a prototype that relies on the more traditional seller’s commission.

The implications of this are intriguing because their present line up of online only auctions includes Contemporary Art, jewelry and watches, prints and Old Masters.  Where’s the decorative arts?  This is my immediate question as to which areas Sotheby’s sees the potential markets.  In my experience, the buyer’s premium had the most devastating on furniture and decorative arts dealers, who are practically non-existent at the higher end. However, if their little experiment starts to win over consignments and costs are contained with the technology, Sotheby’s could create a competitive ripple effect on buying at auction.

This brings me to the present dealer fee (commission) that is imposed by 1stdibs.  Pressure to create revenue from the seller is the traditional method for most transactions.  If auctioneers like Sotheby’s attempt to rely on seller commissions only, as in their proposed online sales, then 1stdibs is their template for this.  1stdibs, through its technology operates world-wide and sells without ever owning an item.  Buyer’s pay nothing, the sellers (like myself) pay it all.

While 1stdibs is still searching for a healthy bottom line, Sotheby’s makes an enormous profit.  And if the “competition” gets wind of what is going on, Christie’s will have to have an answer (usually match the latest salvo).  What is very interesting in todays present online auction process is the standardization of the present buyer’s premium and extra fees for using online auction services like Invaluable and Live Auctioneer.

It’s an exciting time to be in this business, just when I thought it was never going to improve.  Taste and money are always changing and evolving into different forms and styles.  Great inventory opportunities abound for both dealers, auctioneers, and retail purchasers.  The selections have never been so plentiful, except at the very top, where no one wants to be except perhaps a museum or billionaires. The end of the buyer’s premium is like the fall of Communism; it had its run but it was always flawed.

Antiques, for an Evolving Buyer

Back in the day (the 20th Century), you either bought antiques and decorative arts at auction or from dealers spread throughout the US and Europe. Sourcing merchandise was easy but competitive, with a robust dealer/auction base and a consumer market bursting with demand. Anyone of means could open a shop and be a “dealer” of fine objects in any small or large city. A sense of taste, knowledge, and a little capital for inventory and a shop were the requisite requirements for success. Fast forward to the present and the necessities for survival have a completely different format.

The showroom and shop structure has gone the way of Amazon Prime. It’s not about scholarship and knowledge but design and trends. Passion and appreciation has taken a backseat to form, function, and availability. The need to have it now supersedes the thrill of the find and pursuit of the extraordinary. With these new parameters, the internet offers the only resource to cast the widest net in the need to find, value, and secure items of interest. That interest now fights with travel, food, entertainment, and technology among the many demands for one’s attention.

Interior design and the residential environment has morphed from a space of primacy to one of means to an end. When was the last time you entertained guests (not family) in a dining room; then again when was the last time you had dinner in your dining room? And the living room, does it have any function anymore? We live in a different reality where the home serves a different utility than in the traditional sense. Rooms have been redefined as to purpose and meaning, with an eye on a different approach to space, color, and light. Perhaps the view from the 45th floor takes precedent over the interior décor, or maybe it’s the architectural minimalism that sets the tone. Interior furnishings seem to take a secondary role, but that’s where there is opportunity for the decorative arts.

With the new availability of merchandise through the internet, the means for procurement of interesting items has never been easier. And in the scheme of pricing, there has been such a downdraft in prices over the last decade that overpaying is marginal. Yes, I overpaid for my Mercedes and I know someone got a better price than me, but so what. I’m driving a nice car and I enjoy it as much as the guy who made the better deal. Pricing antiques has a negotiable metric that should also equate to some form of satisfaction and pleasure beyond the cost.

The possibilities for antiques and the decorative arts in the home or office will continue to evolve. Methods of purchase will always be in a state of dynamic change and the internet will be that engine (what’s after 1stdibs). The touch and feel aspect has already made the leap into the digital world. The future demand for these items rests on a change in perception. Today, being a dealer or an auctioneer offers little cache to a sale. Antiques must solely rely on a change in taste and attitude. Everyone can and wants to live in an environment that defines their personality with furnishing that give some meaning and definition of that individual.

Market Pricing for Trading In The Decorative Arts

Back in the day, dealers were the backbone of supporting prices in a market that they not only dominated, but kept the value fluid and sustainable.  Take out the dealer participation in today’s world and along with a precipitative drop in overall consumer demand, pricing seems to have little foundation. Letting the markets forces begin to evolve, you get a structure that is only effective as an internet exchange, where buyers and sellers can and will negotiate and buy.  All terms of the sale are up for discussion.

The idea of a working decorative arts market exchange has been something I’ve dreamed about for 30 years, since the advent of the internet.  It was always this medium that offered the best reach and transparency for all buyers and sellers, including dealers, auctions, consumers and private institutions.  Making an offer is not an insult but a recognition.  An offer price can be rejected, modified, and or accepted. How the results end up is not pre-planned or entirely predictable.  A bit of passion must enter the equation for the buyer while the seller must become detached from the item.

However, trends are hard to fight and creating new ones is easier than reviving existing tastes and styles. The timing to understand when a trend in the arts starts, crests, and replaced with something new is to know how we all evolve as a society.  For the decorative arts, this process has been  practiced for centuries.  By just tracing the French styles from Louis XIV to Art Deco is staggering; American Revolutionary Period furniture to the designs of the Mid-20th Century seem inconceivable. Trends are the elixir for the arts; decorative arts need that recognition as an all-encompassing, creative, and livable media form.

Which gets me back to pricing as a measure of value for the decorative arts.  Just like any form of art, the value should be more than the physical product.  Style, color, form, function, material all are part of an equation of comparison to similar designs. Market pricing is something that the internet has aided in the form of the online market places such as 1stdibs, Invaluable, and eBay.  There will always be a tug between dealers and auctions as to how consumers and collectors recycle their pieces.  The selling function can happen successfully in both formats.  Dealers and auctioneers vie for merchandise where quantity, quality, and style have different stratas.

Pricing has two parts, a starting valuation and a market settlement.  Buying a pair of 19th Century bamboo and lacquered pedestals has more issues involved than the purchase of an Art Deco wall mirror.  If you think moving a sideboard into your home is a problem, try hanging a chandelier.  The decorative arts have additional cost that any seller knows are potential issues and problems that can deter consumers.  This isn’t Amazon and it’s not buying a stock or bond. Reasonableness will win out.  If there is limited demand or that style is so far from the present trend, the price is as low as giving it to charity (if they will even want it).  

As a dealer, the price I offer is a combination of a lot of factors but a selling price also involves a different set of considerations.  It is this fluid feature that competes with the ridged buyer’s premium enhanced auction process.  But the auction process is a very necessary evil, as some formats of the process are presently operating.  It’s unfair to the buyer, but auction fraud has been going on actively in this country for most of the 19th century as well (FRAUD, An American History from Barnum to Madoff, by Ed. Balleisen). Dealers have shown their ability to perpetrate fraud too, but the best advantage that a dealer has is being able to “buy it now” at the right price!

Rustic, the Decorative Arts champion!

The end of the summer is rapidly approaching, and I think it’s a good time to reflect on where the Decorative Arts has a pulse.  From my perspective, good Rustic, of any period or style will sell easier than a French 18th Century commode.  That may sound like a “stretch” but then again, Mid-Century and Contemporary still dominate the taste style du jour. Rustic is a very broad style, that spans American Folk Art to Bavarian and Swiss Black Forest styles.  It cuts a very broad swath of collectors and has interior design appeal.

Rustic as a classification of decorative arts represents a style that in many ways is timeless.  I have always had a secret passion for it.  Oddly enough, my “old” favorite style of Art Nouveau seems almost as the artistic height of the Rustic style, but give me my American wicker, Molesworth, or 18th Century Country English too.  And then there are the materials and texture of the items.  Not only was it made with wood, but skins, antlers, metal, stone, and glass.  So, from my prospective, why is it clearly the most popular area where buyers now focus?

I would be remiss if I said it was my pricing, but I seemed to have not had that valuation skill in all of the other classic periods and styles of antiques.  Perhaps my problem is that I still love all these great examples of decorative arts (that darn emotional connection.)  However, the style that is the easiest to understand can be the one with the simplest design.  Folk Art and French Provincial are related by innocence and purpose.  Then you can go to the other extreme of some of the great 19th and 20th Century homes built in the Adirondacks or Germany and Switzerland.  Rustic is looking interesting again, but it never really faded, like so many other antique styles have over the last decade.

My path to this style has a long and deep connection, which came about by my not being a buyer in Europe in the last quarter of the 20th Century (and up to today.)  Rustic came to me as an option of what would enhance and diversify Newel’s inventory.  Classic European styles were in great demand in the 20th Century, and Post-War Design was being accepted by its original 1st generation owners.  I plead guilty about the Post-War Design domination. With my limited scope of buying merchandise in the Northeast United States I preferred to buy from those dealers who had an inventory.  Quantity and selection is everything to a buyer and I have had the opportunity to buy from the best, people who know much more than I.  As another option I found that Americana at the high end was not where I could compete in price and knowledge of the individual pieces.  My eye wasn’t trained in that specific manor.

So I must confess, Rustic has had my heart by default and with pleasure.  To some extent, I feel quite vindicated in how Newel has such an incredibly deep and unrivaled collection of furniture and accessories in this style, anywhere in the world. Of course I can say I helped diversity it in this area, but the real credit for exposing me to the look of this type of item came from the inventory I grew up around at Newel, created by my grandfather, Meyer Newman.  Yes, there was plenty of 17th through 20th Century English, French, Italian, and every other Decorative Arts style in the store; that’s why the premier prop house in New York would have Rustic.

The Antiques Industry, Captured in Time

Anyone in the decorative arts and specifically the “antiques business” has been overwhelmed by the last decade’s collapse in pricing, glut of supply, and dearth of dealers to create a secondary market.  Yes, Tiffany is holding its own and modern design is still testing its limits but the industry’s many other categories are faring on a different level than has ever been seen in this market’s new re-balancing.  Pricing now is a much more elusive number that tests Adam Smith to his core.

Willing buyers and sellers balance price with knowledge.  The knowledge is a critical component for gauging value, but the value can be altered by an emotional or visual reaction to the object; does it turn you on! The emotional connection and appreciation of the intrinsic quality of the item has an edge, at least for me.  So why can’t the public at large want some of this stuff like I do; to live with and enjoy.  That big $64,000 question is killing the business, and it is all because of how these items are perceived by the public, which does not include being functional, decorative, and moments in time.

Even a Jeff Koons sculpture will be dated, just like Picasso, or Rembrandt. Perhaps Contemporary Design will eternally evolve, with form and functions ever driving innovation. The only salvation for the antiques business is to promote its point in time as a period designed piece.  By all (my) measures an eclectic mixture of decorative arts is the best interpretation of taste, style, and knowledge.  Mixing French with bamboo or Mid-Century with Italian Neo-classic, adding in a little Rustic, it’s the individual pieces that have to compete for your eye.  How much fun is that!  Going to a museum and seeing these things can evoke feelings of fantasy and make believe, so why is it so difficult to make these items appealing to a market that is much bigger than when the industry was thriving 15 years ago?

It’s really all about how these items are marketed. I have yet to see a professionally created analysis of the hard core antiques business.  Trends are one thing, but the generational destruction of the market cannot be blames on 1stdibs and its sort.  The whole image of these items has been hollowed out to Antiques Roadshow pricing.  Sentimental value will get you nothing, and that’s not the kind of value you need as a buyer.  Buyers have given up on this stuff not because it’s not “contemporary” but because our items have lost their ability to attract any emotional interest.  Buying some “disposable” Nike sneakers can get your blood flowing, a cool Art Nouveau bergère in any room would light it up.  

The antiques business is unfortunately in a downward spiral because of a simple problem, we’ve lost our sense of time.  Our potential consumers have other more pressing needs than a slow selective process which requires both time and your attention. Yet there is interest and something of a mystery about the pieces and how they got here.  The potential is there in anyone who likes non-fiction and has a visual sense.  We trade in the real, not make believe.  We should turn the image of these items into owning a piece of time and place, with good modern design pieces, that will get old too. Creating a marketplace that will foster that kind of thinking is daunting but is the best option for a resurgence.

The Antiques Business, Fun If Your Looking for Opportunities

I never have seen such a time for opportunities in the antiques decorative arts world.  The merchandise is certainly available in all periods and styles, as museums have acquired all they need and the final generation of collectors and over-decorated residences is passing on.  With the glut of inventory saturating auctions and little or no demand from consumers (not to mention a dearth of dealers), Adam Smith’s iconic laws of supply and demand have hammered prices. With that, prospects in this industry are now percolating.

Whatever the future holds, the powerful forces of taste, style, function, and knowledge will always be vital components to a valuation.  The one fudge factor is how an items is marketed; does is send an emotional or functional message to a buyer or have an interesting provenance.  The whole image of what these decorative items represent is at a critical point for the future success of this commodity.  Buying at Newel, Sotheby’s, or 1stdibs should really mean nothing, as all three can bring a sense of prestige and cache.  But it’s the actual ownership of the item that should be the important part of the transaction for the buyer.

With the advent and now domination of internet portability and access, antiques and the decorative arts have now shrunk from actual touching to postage stamp size screen presentation.  Color and proportion are digital interpretations; how can you bridge this substantial gap? Digital technologies like 3-D help but the best results today require being in all places, all the time.  A showroom is essential but the next best thing is physical access to the location where the items is to be used.  However, this is not like buying anything else on the internet.  Shipping is the link between the buyer and seller, and these items are not shoes or electronic devices.

Last week, Newel completed the purchase (at auction!) of a large segment of the vast collection build by Maxine Kaplan for her prop company.  The fun and challenge for us will be to absorb the incredible diversity of the merchandise, which is dominated by Vintage and Mid-Century accessories.  Collections like this will never be duplicated in its sheer diversity and quantity, because it was created with the idea of renting not selling the inventory.  In a familiar way that was what build Newel and sustained the Company into a 4th generation.

As opportunity meets preparation (my grandfather’s favorite expression) Newel’s timing to aggressively purchase items in this collection will dovetail into our strategic plan to return to our rental roots.  The selling side of the business involves an industry just now trying to find an equilibrium from a devastatingly long downward trend; it’s something we can’t control.  Having the opportunity to reinvigorate our inventory in one fell swoop while focusing on the rental side of the business is quite a compelling circumstance.  Our preparation for this has been in our DNA but we seemed to have lost our focus on having fun at doing what we do best, creating commercial or residential imagined interiors of any period and style.

What Newel Really Is, and Can Be

When a company is created, it is the DNA of the entrepreneur who puts his substance and skills into the business.  As the environment around that entity evolves and becomes more challenging, the mark of the founder can be disrupted and destroyed by many means.  Succession, competition, and technology come to mind as cause for the demise of a potentially good business; but with those tests can come resourceful opportunities.  


In assessing the history of Newel and its colorful past associations with Broadway, window display, and later with motion pictures and television, the last 60 years of the 20th Century was a gold era for the firm.  Product could be acquired either in Europe or discarded items on the curb of Park Avenue apartments. Inventory was cheap and available, anywhere in the world.  Dealers did fine back then, as selling was more than brisk in a market of home furnishing on steroids.  Antiques, art, and the whole idea of a collector now sounds like an oxymoron compared to today’s market environment.


Newel at that time, reluctantly sold inventory to those who got through the (rental only) door.  I can attest there being a sign saying “closed for inventory” at the end of the summer, when Broadway was pumping itself up for the new fall shows.  But the Babe Paley’s of the world got to go through that door, with the aid of her husband, William Paley.  He owned CBS, which Newel was renting tons of furniture and furnishing for all his and the other network shows being performed live to a national audience in New York City.  If we had to sell and item, we were reluctant to give it up.


Fast forward to the last 15 years and you see a different Newel, one that seems to have lost its direction from its founder.  Selling decorative arts should have been good over that period. However, the hurricane of Mid-20th Century and modern design caught everyone in the industry off guard as to how it became such a dominant social and economic mindset; taste became minimalism. Dealers and dealing were irrepressibly altered, especially with novel auction methods and the advent of websites.


The lesson in all this is that Newel has a young CEO who seems to have inherited his great-grandfathers DNA, and wants to rediscover what made Meyer and Evelyn Newman’s company survive and grow in its formative years.  You might think of Newel are purveyors of fine decorative arts, and we are.  We are also in the fullest sense, a prop house for all periods and styles, from the 17th Century to the present.  If you are looking to recreate a room from the past, chances are we would be your best shot; it’s not too hard to do and a lot of fun to do it in person or online.  


After years of trying fight a market that has successfully shot itself in the foot with the lack of unity and direction as a dealer in the trade, I welcome a transition to happier times and future possibilities. With the prospects budding for a strong dealer association AND an infusion to focus back to rental operations, this next generation is redefining Newel’s allure and spirit.


A New “1stdibs” Level of Recognition

Well, finally after more than 75 years in business, Newel has been honored as a member of the inaugural class of “2016 1stdibs Recognized Dealers”.  Honestly now, do you really want to bestow such an honor on a prop house? A dealer’s inventory trades in a market by different ways and means.  I’m sure Sotheby’s and Christie’s have their favored clients that get preferential treatment in pricing and information.  We now get exclusive benefits from 1stdibs.


1stdibs is in this industry for keeps.  They have endeavored to elevate their branding and image by the smoke and mirrors of upscale promotion.  Tiffany’s maybe, but Tiffany blue is too iconic.  With all the sophistication of PR and branding, 1stdibs has a clear template on how it gets done, whether it’s the auction duopoly coddling or perhaps an American Express Platinum Card comes to mind.  In the maturing age of cyberspace and the cloud, 1stdibs was required to change its financial model to a more aggressive posture, as they can and must.


The list of “Recognized Dealers” is quite impressive.  If any form of dealer association could join around this group, it could offer the opportunity for a powerful and productive trade organization.  It could even include the future classes of “1stdibs Recognized Dealers”.  However, this singular move by 1stdibs to create an arbitrary basis of like-minded international dealers, seems a bit like getting an offer to do shows like The Winter Antiques Show or Maastricht.  With this invitation it sounds like it is too good to be true but lets not discuss that commission and method of how 1stdibs wants you to do business.  


The more time 1stdibs has to roll out their proposed changes the more it will cherry coat their ability to break the dealer/decorator bonds, and take a commission.  A fascinating similarity happened with the advent or the buyer’s premium, where the auctions thought they could siphon away collectors and decorators from dealers.  Forced change and disruption by technology is coming to our industry again, and who knows who will be the winners and or losers. Three years into the future is an eternity.


Finally, I must bow my head in remembrance to all the incredible and talented dealer who have gone out of business in the last 20 years, with limited or no replacements.  What would this “Recognized” group have looked like, even 10 years ago?  So thank you 1stdibs for the acknowledgment; this is the first time Newel has ever been associated with other dealers in this or any such manner.  1stdibs will present opportunities but I prefer membership in an organization that will always have the dealer’s back.

Who You Are, Defining an Antiques Dealer

The term “antiques dealer” has an archaic ring, and the image, what image?  Unsavory or crotchety, independent and self-sustaining, passionate but a bit irreverent, this breed of an economic misfit is singular to the art dealer, real estate player, or financial investor.  Owning and controlling a physical inventory, whether in a virtual or brick and mortar location requires a certain knowledge and trading capacity.  Individually, you are being set up for limited possibilities; collectively, has better prospects.

The incredible decimation in the base of antiques dealers over the last 2 decades has been staggering in its toll and a rapidity of its results.  When the good times rolled prior to that period, dealer success was an afterthought; anyone could make it; just show up at a Pier Show in Manhattan and you could be part of the fun.  Yet, there never was any form of association between the dealer trade, short of the few who gained entry into a fraternity of some elitist dealer organization.  Excuse me, but give me the masses of dealers and not the chosen few who represent no one in the industry.

The time is now for dealers to define who they are and what they stand for and against.  Issues like internet platforms, auction reform, ivory trade, education, image branding, and self-esteem in the profession are central to any possibility of success for an antiques dealer association.  The process is now starting with a consensus of many far flung dealers who have a relationship with 1stdib. The issues with 1stdibs are now secondary to the opportunity for dealers to coalesce around each other for the benefit of a potential organized membership. No one individual dealer has as much to gain as the larger group of participants who are the trade.   

My 1st dibs conundrum, Industry Dynamics

The diminishing status of the decorative and fine arts industry has been quite consistent.  Decades of industry scandals and government actions have defamed the reputation of both dealer and auctioneer participants.  The need to re-imagine how a dealer can function is at a point of evolving or perish.  The cross hairs of digital vs. reality have now collided.

While I can’t say I prefer having a showroom over a warehouse setting, the physical possession offers the ability to touch, and see texture, color, and form.  It’s something that a virtual presentation can’t quite duplicate even in a 3 dimensional view.  Of course there is the option of consigning and shipping “on approval”, but this isn’t a pair of shoes.  1stdibs is planning to impose rules that put that burden on me with the obligation to do the financial transaction through their system, which imposes a potentially 13% monetary charge off the eventual selling price.  

Pricing is only part of the issue.   Now, long established clients, and those who want to do business with my firm, are excluded to purchase through my company when there is a correspondence through or indirectly by inquiry of a posting on 1stdibs.  Quite honestly, I hate telling my clients that they cannot buy that item from me directly.  Am I supposed to lose many of my clients that could have seen the identical piece on my web site or in the showroom listed at the same price, but with a different and possibly lower negotiated price?  Pricing is an issue, but client contact is something I’m not prepared to loose.  My problem with 1stdibs is this isn’t what I signed up for when I first became a 1stdibs member.

I can’t deny that 1st dibs shouldn’t get some form of remuneration for assistance in selling an item, but it can’t be on a commission basis. It should just be a transaction fee of maybe 2%, with payment directly to the dealer or a 3% credit card charge.  If 1stdibs wants sales volume, keep the costs low; think Amazon.  I can only offer 1stdibs my thoughts, but David Rosenblatt the 1stdibs CEO, and his management team have venture capital and hedge funds calling the shots.

This is a conundrum.  How do I stare down a (presently) financially strong company without any organized group of dealers that could inflict some economic pressure to their operations?  On the one hand, both the dealers and 1stdibs are experiencing a contraction in the market, and 1stdibs isn’t the elixir that is makes itself out to be.  The tattered image of the industry is beyond a disgrace.  The Antiques Roadshow isn’t exactly leading the industry on a growth path.  

The best part of this crisis for dealers and their customers is the opportunity to re-image and remake how the decorative and fine arts are sold and valued.  How and why you own these objects must always be a part of the value.  1stdibs with their new amended terms, offers a new-fangled method as to how the industry should evolve.  I can’t say that it works for me, as they might not have anticipated for most dealers; but I know I can adapt with and to 1stdibs, hopefully for everyone’s benefit.  I adapted to the auctioneer’s buyer’s premium and somehow Newel is still standing abet with a good parallel rental business. The evolutionary dynamics in the last two decades of this industry have been extraordinary.  But through it all, a dealer focused association has never been able to coalesce around some form of shared common values and image.

Whether it’s going the 1stdibs route or an alternative virtual medium, this is all about the survival of dealers as we know them.  The shrinking dealer population over the last 2 decades can and will continue unless there is some unified direction to the benefit of those who aspire to be in the trade. We are caretakers and educators who survive within the economic principles of supply and demand.  Only openness and transparency of the market will help to rebuild its potential. What alternative is there to 1stdib?  The short answer is none, but it doesn’t take a rocket scientist to image that something else might evolve, just like eBay did before 1st dibs, or Sotheby’s $60 million internet disaster, or Circline, etc. etc. etc. The market and industry exist in a dynamic environment.