NEW global online auction house Fine Art Bourse (F.A.B.) is challenging the centuries old business model established by Sotheby’s and Christie’s as it slashes fees and simplifies the process.
Just launched at www.fineartbourse.com, F.A.B. will charge a buyer’s commission of just 5%, compared to the 25% fee commanded by most of the traditionalists, as it offers the finest quality art. And transaction charges will be exempt of VAT/Sales Tax/GST, artist resale royalty and copyright fees.
The first sale is scheduled for September.
It will also warrant catalogue descriptions and good title, unlike most of the online art portals where it is a case of “buyer beware”.
Packing and shipping – often a barrier to entry for bidding online – are no problem here either… they’re free for buyers and sellers.
And clients’ money will be kept safely in escrow.
Heralded as a “game-changer in the field of auctioneering” by the media*, F.A.B. is the brainchild of former Sotheby’s Australia supremo Tim Goodman. He already has the seal approval of some of the world’s top art experts who are backing his vision as consultant specialists.
Together with F.A.B.’s worldwide network of offices, they will be able to service a broad range of clientele wherever they are.
Goodman sees the current wave of digital development as being akin to the Great Oklahoma Land Rush of 1889, as auction houses, art dealers and young techies compete for a slice of the US$50 billion global art market and to see who can be first with the best new way to sell art online.
The stakes are high. Traditional auction houses take fees as high as 60% of the proceeds from the sale of art and they still struggle to make a profit. Their shareholders are not happy. Their customers are not happy.
“Something has to give,” says Goodman. “The traditional auction business model is no longer sustainable.” He is not alone in his view, as the media debate of recent months shows.
With US$3 million raised in initial funding so far, the world of finance is taking his claims seriously.
F.A.B. rents small humble premises around the world, employs few full time staff and does not produce catalogues.
“All we have done is apply digital technology to some of the good old ways and cut costs. We are handing over the costs cuts to our customers who are the ultimate beneficiaries,” Goodman says.
“It is important to remember that we are not an intermediary service platform but an auction house dealing directly with buyers and sellers. This allows us to deliver exceptional value not just in terms of service and fees but also by uniquely providing conditions of sale that legally exempt our clients from a raft of additional charges that they would be obliged to pay when using online portals.”
“Not only that. Any independent analysis will show how our fee structure – with its fixed-price Lot Offer and Lot Buyer charges – means that we reward our sellers and buyers more as prices rise. On a $1m hammer price, for instance, total transaction charges spread across buyer and seller would come in at less than a third of what the duopoly would charge.”
“We feel that is fair, and we are able to keep our charges low because we have deliberately not burdened ourselves with luxury premises, legions of staff and unnecessary expense.”
Goodman believes that if people can freely bid on an artwork and receive it within 72 hours without it disrupting their daily lives, it will open right up the previously secretive and elitist art world to the masses.
30 highly respected consultant specialists located in the Americas, Asia and Europe will catalogue the art consigned to F.A.B. by the sellers. It will then be sold live at a global online auction.
“I feel as though my whole career has been in preparation for this. I am 62 and I feel like I am 32 again. We are discovering fresh pictures not seen on the market for generations. I am loving it,” says Goodman.
F.A.B. Chief Executive Officer, London
Tim Goodman grew up in Sydney, Australia, entering the auction industry aged 18. He completed an internship at Sotheby’s, New Bond Street and Belgravia in London in 1974. Tim grew a large and successful fine art auction business, launching Bonhams & Goodman in Australia and later acquiring Sotheby’s (under licence) and becoming the founding Chairman of Sotheby’s Australia Pty Ltd. Tim acquired the second and third oldest auction houses in Australia from the descendants of the founding families. He sold all his Australian auction house interests in 2011.
Tim is a Trustee of the Australian Museum Foundation.
He is the Founder of Fine Art Bourse Limited (HK) and a major shareholder. Tim is a F.A.B. director and the CEO.
While Tim is based in London, he travels extensively recruiting staff and new customers.