Sotheby’s has announced they are capping their buyer’s maximum commission to 20%, down from 26 + 1%.
It has been apparent for some time that while auction outcomes for paintings and other high value collectibles were rising, Sotheby’s original business based on rare books, while best in class worldwide in 2023 among the 300 auction houses we cover, was also relatively quiet by their recent standards. Sotheby’s February announcement to lower their commission rates effective May 20th was probably principally based on improving their performance with paintings, their largest category. While Sotheby’s has often dominated collectible paper over the years, Christie’s has been turning paint, pigments and frames into gold. Now Sotheby’s new lower commission rates seem designed to encourage additional bids on paintings by lowering their buyer’s premium. In this calculation, collectible paper is almost an innocent bystander except that collectible paper and paintings share the same rate card. Simply stated, paintings are where the dough is.
Sotheby’s revised rates are logical based on objects worth well into the five figures but very few examples of collectible paper reach that threshold. Last year we covered 658,433 lots offered that turned into 525,664 sales worldwide, from which we have drawn our annual Top 500 lots for 2023. Leading off was Sotheby’s Codex Sassoon at $38,126,000 descending to No. 500, Bonham’s Darwin’s On the Origins of Species [1859] that sold for $93,449.00. Further below were the other 525,164 lots that sold, generating close to a billion dollars with a $1,904.17 average winning realization. In other words, most collectible paper is making tens of thousands of people’s hearts flutter but not many lots are going to be mentioned on the front pages of the New York Times.
My point is Sotheby’s new pricing is aimed to encourage bidders spending major money, while collectible paper is solid and healthy, is a few light years away. Using the same rate card for paper and paintings is going to need imagination.
High value collectibles have been on a very good run for the past 10 years while prices for paper rarely reach $90,000 for single lots [per our annual report]. Hence Sotheby’s adjusting their rates now to cater to the art and high value collectible markets is simply good sense.
While the headlines about Sotheby’s are speaking to and of the lower buyer’s premium, in the weeds is another important change, their fresh incentives to lower estimates. That’s going to increase their percentage of lots sold.
Now Collectible Paper needs to adjust.
For Sotheby’s and other houses that have this lucky predicament, to sell collectible paper and valuable paintings, they can match Sotheby’s headline figure: 20%, by reinstating the previously waived or reduced consigner’s fees. Presto the houses’ net margins are restored and collectible paper’s place in their pantheons remain secure.
This does not suggest that the collectible paper auction market is unhealthy, rather than when an auction house makes policy based on expensive paintings and other high ticket material, collectible paper’s consignor fees are going to be firmer.
In any event, many rising mid-tier auction houses may find themselves benefiting from the focus on higher value material by their stately brethren, leaving them opportunities to sell superb material that falls outside of their target range.
Certainly the vast majority of Collectible Paper will continue to flow easily into those rooms that are open to it. Adjustments in fees will be resolved. And because a fresh wave of Collectible Paper, primarily ephemera is now looking for auction rooms to accommodate them, many houses will offer them a safe harbor.
The world changes.
Here are their lots within our Top 500 for 2023:
![<b>One of a Kind Collectibles, Oct. 17:</b> [Maps] Gio. Ant. Magnini, Italia, 1620.](https://ae-files.s3.amazonaws.com/AdvertisementPhotos/c92d6947-7efa-449d-82ff-548bbf1cd1ce.jpeg "<b>One of a Kind Collectibles, Oct. 17:</b> [Maps] Gio. Ant. Magnini, Italia, 1620.")
