In August 2022 a first sale of recent work by emerging artists via an innovative live virtual public auction was launched by veteran art market professional Simon de Pury, drawing upon his vast experience as both public auctioneer and private dealer, and especially his reputation for championing careers of contemporary artists, photographers and designers. De Pury’s new art business model is disruptive: aiming to be both altruistic and profitable, and combining private dealing with public auctioneering.
Many artists, and dealers exclusively representing them, are customarily reluctant to have works offered for first sale at public auction, for the following typical reasons. Even though artists could require the auctioneer to operate a reserve price, below which their works could not be sold if the reserve price were not reached or exceeded, such publicly observed failure to sell might damage the development of the artist’s status in the art market. Conversely – perhaps perversely – works first selling for what could be perceived as unusually high prices, might inhibit the willingness of interested buyers to pay such high prices for these artists’ works in future.
A further typical reason for artists avoiding auction selling is their reluctance to pay the customary consignment commission fee of around 10% of the realised hammer price. In any event, gallerists representing artists exclusively for primary sales, are also reluctant to agree to auction consignment, instead preferring to negotiate sale prices directly with known private buyers.
De Pury’s new business model addresses many such typical concerns, by offering uniquely conceived T&Cs via consignment contract guarantees, such as follows. 100% of the realised hammer price would be paid to artists and/or their gallery representatives – effectively foregoing artists’ payment to de Pury of any auction consignment fee. All bidders/potential buyers would be required (via contractual conditions of sale) to agree not to resell their purchase via auction for three years. Artists would be informed of who had purchased their works, and identities of so-called underbidders whose bids failed. The buyer’s premium paid to de Pury by the highest bidder would be 18% on top of the realised hammer price – around 8% less than the current buyer’s premium rate of leading art auction houses. 3% of the 18% buyer’s premium paid to de Pury would be remitted to an established charitable organisation.
De Pury’s conditions of sale for bidders/potential buyers require them to accept no reselling at auction within three years, conveying of their identities to artists, and also customary conditions: bidders must pre-register, supplying valid credit card information from which a refundable $200 charge is taken; the actual contract of sale is between buyer and artist, for whom de Pury acts as seller’s agent; highest bids accepted are legally binding for two business days after the auction’s close, which are payable in full plus buyer’s premium by that deadline (note: artist’s resale right payment does not apply to a first sale); works are sold on an ‘as is where is’ basis (effectively meaning ‘caveat emptor’ or ‘buyer beware’ – the work is being sold in its current condition that the buyer is deemed to have checked before bidding).
In these ways, de Pury aims to achieve many key objectives. For his August 2022 venture, for example, de Pury presented ‘WOMEN: Art In Times of Chaos’: he chose 16 works by ‘outstanding contemporary women artists that have been created over the last two and a half years’ – a curated exhibition of which ran online for three weeks before the live virtual auction. Linked to this venture’s theme, de Pury guaranteed to remit 3% of the 18% buyer’s premium payment to ‘UN Women’: the world’s largest women’s charitable organisation, which delivers policies and standards that uphold women’s rights for the United Nations. Furthermore, as a virtual exhibition and auction, purchased works would only physically travel once: to leave the artist’s studio or storage after being sold and paid for – thereby also being ‘environmentally friendly’. Such notable features of de Pury’s latest venture demonstrate how his innovative ideas translate into workable reality.
That reality has inevitably received wide art world media attention in recent months, through which de Pury has been keen to amplify his original motivation and thinking. He thinks that it is ‘not completely fair and right’ when a ‘hot’ emerging artist’s first sale of work is not retained by the buyer, but is quickly ‘flipped’ for resale at one of the main auction houses to realise a significant profit. He cites recent auctions in New York and London where works of ‘young artists’ sold for ‘ten times the price they were selling less than a year before on the primary market’. He emphasises his commitment to conveying particulars about the successful buyer and unsuccessful underbidders – information that is normally retained only by auction houses – to help the artists (and any representing gallerists) with the identities of future potential collectors.
Auction houses and dealers have for decades competed to attract clients from the same pool of potential buyers. De Pury’s extensive experiences – performing both art market professional roles – have evidently driven his disruptive new art business model. In the 1990s the main auction houses decided to also broker private sales, which have since become a key factor in their profitability; but these are mainly secondary sales because gallerists continue to dominate the primary sales market.
However, in fact auction houses depend on there being a thriving primary market for fairs and galleries. Equally, galleries depend on the success of the secondary auction market. De Pury’s new model subverts that customary division of selling roles, by offering a symbiotic market relationship between auction houses and gallerists together conducting primary sales. For de Pury’s inaugural August auction, most of the chosen women artists were represented – and supported – by their own gallery dealer.
It is of crucial significance that during the Covid lockdown period the art market fully embraced, for the first time, digital auction selling. Not merely in terms of the business of selling, but also in bidders not physically viewing the works for sale. De Pury has seized upon this mode of trading, continuing with virtual selling, thereby substantially reducing overheads and carbon footprint; and also removing the need for buyers and works to be in a single, physical gallery or auction house.
De Pury puts his faith in a ‘young generation’ of artists who have no preconceived ideas about the market, and are ‘much more open to try things in a new way’. Thus, a new way of selling for artists new to the business of selling.
© Henry Lydiate 2022