Ebay Woos High Rollers - eBay Premier - Brief Article

Art in America, March, 2001 by Barbara Pollack

EBay, the Internet's largest on-line auction site, recently launched eBay Premier, a major overhaul and expansion of its subsidiary, eBay Great Collections, which handled sales of fine art, antiques and high-end collectibles. The new venture results from partnerships between eBay and a number of existing online art companies, including Guild.com, icollector.com, Latinarte. com, onview.com and artnet.com.

Under the new arrangement, eBay's 22.5 million registered users have access to on-line auctions at all affiliated sites as well as real-time online bidding at over 300 auction houses worldwide. Registered eBay Premier users can also access artnet.com's extensive database of two-million international auction results dating back to 1989. The site will continue to offer lots from former Great Collections consignors, a network of 15 recognized auction firms, including Dorotheum, Lempertz, and Butterfield & Butterfield, the San Francisco house acquired by eBay in May 2000. Butterfield's auctioneer Geoff Iddison, who had been general manager of Great Collections, assumes that position at eBay Premier. The specific financial terms of the new company have not been released, but eBay has confirmed that revenue sharing is part of the partnership deal.

The announcement coincided with a prediction by Wall Street forecasters Jupiter Research that on-line sales of fine art will reach $450 million in 2001, although, at present, most art sites are struggling to stay in business. By contrast, eBay, which sells a broad range of nonart as well as art objects, posted net revenues of $431.4 million for the year 2000, twice its 1999 total. For eBay, the new endeavor perhaps has less to do with its bottom line than with its damaged reputation. In 2000, the company was the target of numerous lawsuits involving on-line sales of fakes. Although a California court ruled in January that the company could not be held liable for its consignors, the negative publicity warned potential buyers about the risks of online bidding. In response, eBay Premier and all of its affiliated partners have announced that they will offer buyers guarantees of authenticity comparable to those in effect at major auction houses, such as Sotheby's and Christie's.

These services, however, also entail escalating fees to buyers and sellers. EBay recently raised its sellers' fee (now at 7-10 percent) for the first time since 1996, and eBay Premier will also charge a 10 percent buyer's commission, the first placed on eBay customers. While some sellers have threatened to withdraw from the site due to the higher costs, eBay Premier does not anticipate problems from its more upscale list of consignors, galleries and auction houses who are accustomed to such fees.