Web sites bid for art buyers: despite setbacks, online art auctions are on the verge of coming into their own

Art Business News, March, 2004 by Barden Prisant

A key observation here is the above reference to the "dealer market;" it seems that all of the sites are courting art professionals as consignors. In fact, neither iGavel nor Fine Arts Bid will accept any consignments from private individuals for fear of misrepresentation. "If a buyer can't see a piece, and if the one selling it is not a professional, it is extremely difficult to know if he or she has described it properly," said Mason. Fine Arts Bid also prequalifies its sellers and insists that they have a return policy, which, Walraven admitted "scares away the timid." Rogallery.com, however, does accept consignments from private individuals for Internet auctions. That said, Rogal prides himself on being able "to describe a piece accurately" when cataloguing it for auction. He also asserted that his company will stand behind anything auctioned on the site.

Not only do the online art auction sites want to offer quality works from quality sources, but it seems they also want to offer services of particular interest to those in the art world. For example, Rogallery.com handles all aspects of a sale--shipping, handling, packing, insurance. In fact, Rogal will sometimes even advise his consignors not to put a work into an online auction if he believes it can be better sold elsewhere. He sees a "resistance level" for Internet auctions at about the $30,000 level, and, he confided that he sometimes sends such expensive pieces to Christie's or Sotheby's."

Developing Niches

Of course, the individual sites want to set themselves apart, not only from eBay but from one another. As just noted, Rogallery.com hopes to lure new business by pitching itself as a soup-to-nuts art management company. "I'm the quarterback throwing the ball," Rogal said. "I frame the art, I price it, I market it."

iGavel sees its forte as its dedication to the "single sale format." It only hosts individual, real-time auctions; works are not continuously pouring into and out of the site. The pieces are viewable for weeks before each sale, and the firm also encourages its consignors to have a two- to three-day live exhibition. This long lead time allows iGavel significant marketing flexibility. Consider, for example, a sale arranged by a consignment center in North Carolina that might include 125 pieces of folk art. iGavel could advertise the auction in folk art magazines weeks in advance. "What iGavel is doing is going to be the dominant model," he said. "Eventually, everyone will end up where we are. Sellers can retain their unique businesses and not be subservient to a company like eBay."

Kip Walraven wants Fine Arts Bid's appeal to be its affordability. He is a self-avowed "tech-guy," and he has designed his site to provide maximum functionality at minimum cost to both him and his clients. He charges no buyer's premium, (which, by comparison, is approximately 20 percent at Sotheby's and Christie's). Additionally, be charges no upfront consignor's fees, making it, as he said, "a risk free deal for the seller." The seller only pays Fine Arts Bid when a sale actually takes place. For now, though, both he and Mason will have to wait to learn if their respective business models will succeed; both firms are barely four months old.