Major Auction Houses Raise Buyer Fees: Up to 30% at Christie’s, Sotheby’s, Phillips and Bonhams

The world’s four largest auction houses — Christie’s, Sotheby’s, Phillips and Bonhams — have all raised their buyer’s premiums this year, amid a subdued art market where big sales continue to hold up.

Christie’s put new levels into effect on September 1: 28 percent on hammer prices up to $2 million, 22 percent on values up to $8 million and 15 percent on sales above that threshold — a slight increase over last year’s changes, bringing it in line with Sotheby’s, which had raised its fees back in February.

Bonhams will launch its new structure on October 1, with a new entry level: 30 percent on the first $35,000, sliding down to 14 percent on sales over $7.5 million. Phillips adjusted its schedule in April: 29 percent up to $2 million, 22 percent from $2 to $8 million and 15 percent above $8 million, with a “priority bidding” incentive that cuts fees 1–4 percent for early bids.

Art advisor Josh Baer says buyers “don’t think they care” about the increase, because they have a final price in mind and simply adjust their bid; but sellers care, because “take-home pay” can be noticeably smaller, especially for lower-valued works — and asks: “What comes after 10 years? 50 percent?”

Stephanie Armstrong of the advisory firm Beaumont Nathan comments that “we may soon reach a tipping point,” but that auctions continue to offer “breadth of access and efficiency” that is hard to replace; in her view, the fee hikes “stem from the unsustainable costs of running large-scale art businesses,” which is driving the growth of independent advisors with more competitive fee structures.

Advisor Todd Levin calls the fees “reasonable,” given the “extremely thin” profits auction houses generate in the current market; in the K-shaped economy, where the high and low ends diverge, top “blue-chip” trophy lots largely subsidize operations, even at thin margins — and Levin estimates many auction houses may prefer not to deal with anything under $1 million at all.

Source: USA Art News (via Artnet News)