Sotheby’s, a renowned auction house, is revolutionizing its fee structure to bring clarity and fairness to the art market. This transformative approach aims to attract new clients, increase hammer prices, and foster a more transparent and equitable environment for buyers and sellers alike.
The new fee structure features a simplified buyer’s premium, resulting in a 26% reduction on most lots sold. For works valued up to 6 million, the buyer’s premium will be 20% of the hammer price, and for works exceeding the premium will be a mere 10%. This streamlined structure replaces the previous complex system, which varied based on the estimated value of the artwork.
Sotheby’s is also introducing a “success fee” of 2% on lots that surpass their high estimate, incentivizing sellers to set realistic reserve prices. Additionally, the seller’s commission rate will be capped at 10% on the first 500,000 of a lot’s hammer price. For lots with a low estimate in the $20 million–$50 million range, the seller will rake in 40 percent of the buyer’s premium on top of the hammer price.
The auction house is eliminating the Overhead Premium, a 1% administrative charge on all sales, further demonstrating its commitment to transparency and simplicity. In place of the Overhead Premium, a “commitment fee” of 4% of the guarantee will be charged to sellers for works with a guarantee.
Charles Stewart, Sotheby’s Chief Executive Officer, expressed his enthusiasm for the new fee structure, stating, “We believe these changes will create a fairer and clearer set of terms in the art market, promoting maturity and growth. This is a smart disruption that moves away from the bespoke pricing structure and allows us to focus on achieving the highest possible price for each artwork.”
Sotheby’s simplified fee structure aligns with the evolving needs of the art market, emphasizing transparency, fairness, and accessibility. This bold move is expected to attract new clients, enhance the overall buying and selling experience, and ultimately elevate the art market to new heights.