Why can’t a seller bid up his items at auction? If he tries, the auctioneer isn’t allowed to accept his bid.  Why should he anyway? With a secret reserve, the auctioneer is doing what he legally can’t do.  If logic follows, an auctioneer can’t accept the seller’s bid with or without a reserve, so why is the auctioneer able bid for him?  It’s the same as having an illegal ring to drive up the bidding. An auction is defined as a bidder against bidder, not an artificially induced format.   I believe the laws are crystal clear on restricting both rings and seller actions in the auction process, and auctioneers,…

The high end of the decorative arts market has been experiencing its first major contraction in modern times.  If you don’t think so then your head must be stuck in sand; check out the impressive catalogues of dealers Dandois (mostly Sotheby’s) and Steinitz (Christie’s) that are going under the duopoly’s hammer.  Those are just two important dealers doing a form of liquidating or shedding inventory, this fall.  However it seems that this trend has been picking up steam year over year as dealers shrink from the market.   This contraction was initiated after the 9/11 catastrophe.  It was a time when antiques shows were disrupted or cancelled and dealers (both…

I’ve been characterized by names (both good, and bad), but now I have been “recognized” by another blogger for my observations and opinions on how the auction process works in the art and antiques industry.  Perhaps I should also have the additional titles of Mr. Antiques Show Vendetta and Mr. Dealer Vendetta.  My criticism and comments toward all the players that make this industry have dubious qualities are meant to give my insight into the methods of operations of all participants that should be exposed and discussed.     As a dealer, I do have a vested interest in the performance of my business as it operates in the environment…

The chemistry involved in acquiring a work of art requires a very unique processing of emotional and financial needs.  Any purchase, whether made by a dealer, collector, or museum should elicit an exhilarating reaction as a measure of the success of the acquisition.  In other words, buying should be much more of an emotionally enjoyable experience than selling.  There’s an intellectual pleasure that can’t exactly be quantified, but paying a premium or just getting a great deal doesn’t lend any of this emotional value to a seller.    Buying is challenged by the goal of finding something that has a special connection that you can identify with immediately.  You don’t…

Some industries can take advantage of elaborate financial and legal loopholes and do very well.  The auction business in the fine and decorative arts world, works on that principal.  Sham bidding is performed on the buying public to deceptively protect the non-disclosed amount of the secret reserve price.  The New York State Legislature is considering a law to prevent this ruse.   The fraud that the auctioneer’s perpetrate on the consumer starts when they offer an item below the reserve, and then acknowledge bids which they know they cannot accept; they cannot accept your bid even though they prod you for it. This is done to create a false sense…

There really is no other industry that is dominated by an auction system.  I’ve been racking my brain to find one that has any similarity to this industry.  Think about it.  We are a diverse wholesale, retail oriented business, with unique works of art that are (usually) sold second hand from the original manufacturer or artist. Other similarities with other industries are the international nature of its trading and public awareness of its asset value.  However, where is an industry that is dominated by two auctioneers?   General Motors, Ford and  Toyota are the biggest auto makers, Exxon, BP, and Shell are representative of oil and gas, on and on;…

In a small final paragraph in Carol Vogel’s New York Times column today, it was disclosed that Christie’s now holds the world record…for a buyer’s premium, set take effect at 25% on September 1st on lots selling for less than $20,000.00.  Aren’t we supposed to applaud when a world record is attained at a Sotheby’s or Christie’s sale (like all the attendees do at one of their showroom sales)?   This is the second price increase Christie’s has imposed on the market in the last year.  How fitting to do it in the dead of summer, to better prepare for the fall auction season.  However, beneath this increase is some…

Hold your breath….and the winner is: The Duopoly.  It really is a “can’t miss”, as Sotheby’s and Christie’s are in such a dominant position in the industry that they should and could adapt to the legislation without much of problem.  You probably wouldn’t even notice the reserve is disclosed, and wouldn’t care if you were a buyer. The first thing this legislation can accomplish to the benefit of the auctions is eliminate any conflict of interest in their biggest transactions, beside the deception.   If I can do the arithmetic correctly, when they have an ownership interest in high value auction lots, it can bring a lot more income than…