We recently looked at the rising prices of auctioned artwork, but we did not discuss the mechanics of art auctions and it’s a relevant topic given the world today. With the pandemic, people have been relying on the internet for many experiences that they would have previously had in person, from zoom meetings to virtual tours of art museums. This shift has also occurred in the art auction world. Artnet and Paddle8 are examples of online-only art auction sites and even powerhouses like Sotheby’s and Christie’s host online auctions now.
Artnet has really exploded in the last year as art buyers have needed to shift to online auctions. There has been a “year-to-date we have seen a 30% increase in total buyers, a 39% increase in total bidders, and a 21% increase in total sellers 1 ” on the platform. Artnet has also managed to sell art for over $1 million, which is a far cry from the $80-450 million that we were talking about in the last art auction article, but it does put them in a similar category as the big auction houses. In a way, online auctions have become a haven for average buyers looking to buy quality art, but who cannot compete with billionaires in the traditional auction houses.
Online auctions were projected to be huge about twenty years before they actually were. Artnet was founded in the year 1999, expecting to be the next big thing, but they rapidly failed and had to regroup, losing millions of dollars in the process. They started gaining traction in the early 2010s and, with the pandemic, have really taken off. Artnet also prides itself on housing auction knowledge; it has a database of over 14 million auction records from all over the world. They’ve also recently partnered with Artifacts, which is a curatorial database. People can research the piece they’re contemplating buying on Artnet and never leave the website.
There are several advantages to online auctions. The summer is usually a slow season for auction houses, but “Artnet Auctions continues to post record successes 2 ” in that season. They are also very flexible and convenient. Younger people are more likely to look for ways to purchase art online and there is an influx of new, young art buyers in markets like Hong Kong. Create a scenario where traditional auctions are closed because of a global pandemic and, suddenly, online auctions are the perfect solution.
There are risks with the online auction model. It can be difficult to fully see an object when looking at pictures online, information about the piece can be limited, and there are often fewer protections in place than with offline auctions. Researching a piece is important to a lot of buyers, especially seeing a record of lots that have gone up for auction before and not sold. Online auctions rarely disclose this information, which may affect the object’s perceived value. Offline auction houses also have powerful protections in place for buyers; they will refund a buyer up to five years after purchase if the artist attribution is successfully disputed. They will also refund for up to four years for most other issues. Online auctions usually have a refund policy of a few weeks.
Online sales have become standard practice across the board in the last few decades and many people shop exclusively online during the Covid-19 pandemic. It is not surprising that art is following suit. There are risks, as there are with any online sale, but the benefits of convenience and instant access have outweighed those risks for many. Online auctions are not going to go away, and they will only become more popular and more protected. As long as the average buyer and the emerging artist are both represented and protected, online auctions will succeed and flourish.
What are your thoughts on online auctions? Have you made an online auction purchase? Let us know!
- “Artnet Auctions Sets Sights on the Million Dollar Market and Succeeds,” accessed July 15, 2021, https://finance.yahoo.com/news/artnet-auctions-sets-sights-million-131500193.html.
- “No Summer Slow Down for Artnet Auctions,” accessed July 15, 2021, https://finance.yahoo.com/news/no-summer-slow-down-artnet-133500152.html.
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