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Alex Brancik at the rostrum during Sotheby's Contemporary Art Day sale in London

Higher Premiums for Sotheby's Buyers

Sotheby’s and Christie’s have enjoyed record-breaking high-end sales in 2013, but both auction houses are seeking to increase revenue. Less than two weeks after Christie’s announced a coming raise on its buyer’s premium, Sotheby’s announced a similar policy change. 
Neither Sotheby’s nor Christie’s had raised the fee charged on auction purchases since 2008. Now the two leading auction houses in the world have announced that they will raise the buyer’s premium on purchases in the new fiscal year. 
Christie’s recently announced its new policy, effective March 11, which will charge a 25% fee on the first $75,000 spent, 20% on the purchases from $75,000-1.5 million, and 12% beyond that. This represents an increase from their previous policy of 25% charged on the first $50,000, 20% through $1 million, and 12% beyond that. 
Art collectors worldwide were waiting to see whether Sotheby’s would follow suit. On Thursday it did announce a new policy, effective March 15, that is slightly more expensive than its main competitor’s. Sotheby’s will charge 25% on the first $100,000, 20% from $100-2 million, and 12% beyond that. Previously it charged the same fees as Christie’s. 
For both auction houses the decision reflects an attempt to increase slimming profits. Despite record sales of late and consistent buying from the upper echelon of collectors, Sotheby’s recorded a decrease in net income for the 2012 fiscal year (Christie's is not a public company and thus did not report profits). By raising the commission made on each purchase, the auction houses hope to increase revenue while affecting most buyers minimally. Sotheby’s stated that 98% of buyers would see an increase of less than 2% on their purchases, and no sales would see more than a 3.6% increase on the final purchase price. 

Read more from Kathryn Tully of Forbes.

This article was featured in Fine Art Today, a new weekly e-newsletter from Fine Art Connoisseur magazine. To start receiving Fine Art Today for free, click here.

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