Auctions Offer a Service at a Price
To negotiate better terms in any transaction is a must and a duty for anybody. When consigning at auction, the vendor must negotiate and agree terms of business. Not after the sale for any reason. before the sale!!
18th September 2015
Negotiate commission rates and expenses before consigning
(French, [1911 – 1995], Painter of ballerinas and young women, popular in both Paris and the provinces. Auction price range £300-2000)
February 1996, Lots Road, London – March 1996, Provence, France
The auction scene in London is wide. To visit all the auctions of London is impossible, so you have to be selective. Lots Road Auctions and Bonhams were next to each other in Lots Road so both were high on my list of viewings every Sunday.
The two Grisot paintings were at Lots Road Auctions – both attractive paintings, but I favoured the one with the pair of pretty ballerinas. I knew the artist’s price bracket to be close to one thousand pounds. At an estimate of £150-200, I had a good chance to buy, even if the reserve was the auction’s top estimate. It was normal at that auction in those days. Nowadays, auctions pitch the reserve at the published lower estimate.
With a little bit of luck and weak competition from other investors I purchased the painting for £280, inclusive of commissions at 22.5 %. I was happy with that. I believed I could double or treble my money in France quickly. I collected the painting immediately that Sunday and prepared to ship the painting to France.
Homework done, the Art Sales Indexes pointed to Felentin auctions in Provence, France as the best selling venue for the painting. No time to waste, no experiments. The target was 50-100% profit and I hoped to make that quickly. Following a call to Feletin on Monday the painting was on its way to France the following day. It was straightforward, quick and hopefully profitable.
The painting sold at the end of March for £1200. An excellent profit you might say! However in the rush of things, in my fear I would not strike a deal, I regrettably did not negotiate the auctioneers’ commission rate and expenses. That was a serious mistake I should not have made after so many years of trading. The auctions took away more than 25% commissions and other expenses, which left me with the net amount of £932. I had a good argument with the auctioneers regarding their commission charges, but to no avail. Lesson learned and deposited in the experience of trading art and especially in France.
· Negotiate selling terms before consigning works of art at auction. A difference of 10% commissions is huge.
· Buying cheaply at auction in one country and selling abroad at an auction where the artist is popular was and is a good policy. An art investor/collector should be well aware of that and should exploit that in full.