Online auctions take the high road
by Bernhard Warner
(IDG) -- Last week Auction Universe completed a two-week-long auction of vintage works from legendary American photographer Ansel Adams. The Edward Carter Gallery in Manhattan, which displayed the works in its gallery, authenticated the collection. From the 14 Adams prints up for bid, six were purchased, including the famous Moonrise, Hernandez, New Mexico, 1941 for $24,500. The showing raised $41,740.
It's a useful lesson for the big boys. In fact Sotheby's, Christie's and Butterfield & Butterfield, three of the world's oldest and largest auction houses, are investing heavily in Internet-auction technology.
The Ansel Adams auction is by no means the first attempt to sell authenticated art online. Numerous galleries have posted their collections on the Web, primarily to attract attention from the art-buying public. They're learning that selling online costs a fraction of a normal auction.
"To tell you the truth, I didn't think we'd be able to sell a $10,000 piece of art over the Web," says Valerie Dillon, the proprietor of the Dillon Gallery in New York. In a mere two hours in December, the Soho gallery sold paintings worth a total of $180,000 by Rachel Bullock – a New York artist with an international following – on its site, www.dillongallery.com.
The fact that the Bullock collection sold out so soon didn't astound Dillon. She says Bullock usually sells out in a matter of days. Dillon was struck by the rabid demand from Internet collectors, as well as how much money the gallery saved by using the Web.
"There were no expenses. No postage. No photography expenses. Nothing," she says. The usual cost for such a showing, including printing and distributing catalogs of the artist's work, runs well over $5,000. With the aid of a digital camera and some good-old HTML, the gallery displayed the entire 18-piece collection, and buyers simply telephoned the gallery to place orders.
A more astounding auction "first" happened last month when Butterfield & Butterfield teamed with Yahoo and LiveBid.com to take real-time bids on the Internet for 77 lots from the O.J. Simpson estate. "We brought in the fourth dimension – the Internet," says George Noceti, senior VP of Internet auction strategies. Of course, bids were also accepted in person, over the phone and in absentia.
The Net-based auction was no one-time publicity stunt. Butterfield's, a 135-year-old auction house based in San Francisco, used its recent $18 million IPO filing to play up the affiliations with eBay, Yahoo and Zing Networks that help it bring high-end auctions to online audiences. The company began posting catalogs of fine art on its site in January. Like Sotheby's, prices for online auction items will be on the low end, in the hundreds or thousands of dollars. "I don't think the Internet is ready yet for the higher-priced items," says Noceti.
Hans Neuendorf, chairman of New York-based Artnet.com, which plans to launch an online auction later this month, disagrees. "High-end art is a known entity," he says "Therefore, it can be traded online with less risk."
Nonetheless, Neuendorf dismisses Sotheby's $25 million move onto the Internet as simply a marketing ploy: "The truth is they haven't thought it out except to say they want to be perceived as an Internet company, probably to cash in on this bonanza."
Neuendorf's scorn is understandable. Sotheby's wants to corner a market in which it has traditionally had a weak position – art under $10,000. And by signing up more than 1,800 dealers on an exclusive basis, the 255-year-old firm already has established a firm grip on the fine-art supply – and annoyed its competitors.
Online auction services thrive
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