Giacometti Sale Underscores Why There’s A War Between Dealers and Auction Houses.

In 1 on February 5, 2010 at 4:31 pm

While working on the re-invention of the wheel recently,  I was confronted with some passionate comments from dealers about auction houses.

Seems there’s more than a bit of bad blood between struggling antiques and art dealers and high-flying auction houses.The dealers’ loudest complaint is that auctioneers have  stolen an audience segment that used to shop at dealers’ shops.

One well known dealer even complained that she has to shop at dumpy puces des marches in France to get decent stock. Auctions that she used to frequent are now out of sight.

The crux of the matter is that auctioneers have the advantage.  They have trained large audiences to turn to them for great deals by hugely undervaluing catalog estimates. The pool of wannabee buyers then thinks they have a real chance to snag a fine piece of art. So they make their plans; stay up all night the night before thinking about how they’re going to score big for less and then….they get aced out of the best deal of a lifetime when a bidding war ensues.

In actuality, the big money that always  had its eye on the work of art and the ear of the specialist makes off with booty.

“L’Homme Qui Marche I,” the Alberto Giacometti that went off at Sotheby’s London yesterday for  $104.3 million (including buyers premium) is the perfect example.  Sotheby’s had “expected” the piece to bring between $19.2 million and $28.8 million.  Or so they said.

The ploy of under estimating auction items more than 50% below their fair market value is the oldest in the book.  How else do you get 10 wealthy men in a pissing war over a gorgeous figurative bit of metal?

The reverse of this tactic at the retail level is to tag items at 5 times their work and then knock the price down in a gigantic sale, “because I’ve got to have work done on my Escalade.”

When retailers do this, we call it unethical.

When auction houses undervalue catalog estimates, we say that’s good business.

The war between dealers and auction houses hinges on the ability of the auction houses to draw large crowds because of low catalog estimates on every and anything from a piece of furniture to a fine sculpture.

The Question then becomes: How do the Dealers Fight Back?

At the risk of flogging the same horse as always:  use the same marketing channels that the put auctioneers on the map.

The auction galleries didn’t just evolve into the venues of choice. They worked at it. Got their names out. Took away the intimidation factor and came down to the consumers level. (Example: Christie’s monthly home sale. Priced to sell. Few, if any, reserves.)

You can beat the auction houses at their own game.

One of the best ways is to cultivate the middle of the market again.

The middle of the market is alive and well. But it’s not shopping for antiques. It’s buying $12 drinks on Ludlow Street, Prada bags, Jimmy Choos, Purple Label suits…in short its having fun and, frankly, dealers are not making antiques fun.

For the most part, dealers are still making antiques prissy and aiming arrows at an audience of socialites.  Who wants to be prissy these days? And the great middle class is much bigger than the shrinking pool of gala-benefit event socialites.

It’s time to climb down off the horse and ramp up a marketing campaign that talks to the people with money. Yes, I’m saying new buyers, again.

When you get real about a  marketing campaign, you’ll see that there is an entire range of   marketing channels open to you that span streetlight banners to internet banners.  You will have pull out the stops…

  1. Use article marketing.
  2. Press releases.
  3. Give yourself a decent budget for media and ads. (And get a professional to draw up a media plan based on that budget.)
  4. Understand and learn how to use the Internet for social marketing.
  5. Employ a social sales site, something like – coming soon – so that you can use Web2 tools systematically.

Understand and use the web to grow your audience – comments, postings on high traffic sites, banners and towers on appropriate sites – all this is part of sustained marketing plan.

If you want to fight back, do what the auction houses did. Mine the universe of potential buyers instead of relying on yesterday’s tactics.

Think I’m tough on you? Then give me a call or make a Comment. Let’s get this dialog started before it’s too late.

Let’s stop doing business the old way and invent the future. It’s graspable, but it takes some effort beyond buying product.

  1. Holy middle-market, Batman! You left exhibting at good antiques shows out of your list of marketing suggestions.

    • Dear Bob, the reason we don’t recommend shows is because most dealers already know which ones they want to do, the costs and the anticipated ROI. When asked, by new dealers, to recommend shows, we do a media plan on them just as we would if evaluating paid media placements. However, I personally am a huge supporter of Shows.

  2. I had a chuckle when I read your newsletter for the first time today. I’m preparing for the Verge Art Fair, a peripheral fair to the Armory Show this week in NYC. Last fall out of frustration with paying art fair exhibitor prices and not selling my comparatively priced paintings, I called everyone back that showed interest in my work at the fair, and dropped the prices playing a do it yourself phone auctioneer. I did indeed sell work.I didn’t like the prices my work fetched, but I payed expenses for the first time in 2 yrs.

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