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đŸ”„ Alvaro minutes: Pricey Auction Realities + Rachel Jones

Hidden fees crush seller profits

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-In a Minute-

đŸ”„ Words I Like: cut, math, survival

What a Work Needs to Clear Auction

This is for you, Jon, so pay attention. For a work to turn a profit at auction, it needs to cover all the hidden costs first.

Start with the seller's fee, usually 10-15% of the hammer price, but it can go as low as zero for high-value pieces if you're a negotiation ninja (shoutout to Daniela Bianco-Duppen for this insight).

Then add shipping, insurance, and handling, which can eat up another 5-10%, depending on the size, weight, and destination.

Oh, and don’t forget cataloguing and marketing costs, especially for in-person auctions, which can tack on another 5-7%.

So, let’s do the math: for a $50,000 hammer price, you're already losing $10,000-15,000 in fees and logistics.

If you're working with David R’s estimate of 30-35% in total costs, that $50,000 piece must fetch at least $70,000 just to break even.

Want profit? Add your desired margin on top—say 20%. That means your piece needs to hit $84,000 at auction.

Online auctions? They’re cheaper but not free. Costs still hover around 30% for low-value works. You’ll need a smaller miracle, but a miracle nonetheless.

Now, toss in buyer’s premium (20-25%), which doesn’t directly hit you as the seller but could scare off bidders.

Daniela also points out that top-tier sellers can cut deals to lower costs or even take a slice of the buyer’s premium. Don’t count on it unless your piece is museum-grade.

In short: if your work doesn’t clear at least 140% of its hammer price in three years, you’re basically working for free.

So, Jon, when you sell at auction, ask yourself: are you chasing profits, or just hoping for a really expensive thank-you card?

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-Today’s Catch-

Rachel Jones

Rachel Jones, Red Cranes In The Dirt, 2018

💭 My 2 Cents: I’ve had my eye on Rachel Jones since she rocked the RA Schools Show in 2018. Her big, fiery style suits bold collectors who laugh at average dĂ©cor. The current listing at ÂŁ440,000 might seem steep, but early works from rising stars typically come with a premium.

🔑 Key Numbers: She boasts a 100% sell-through at auction, although the average sold price plummeted 88% between 2022 and 2024—ouch. “Red Cranes in the Dirt” is 250 cm by 160 cm, a scale that can command higher bids if the market rebounds. Auction hammer ratios average around 6.37, showing a knack for beating estimates.

🧠 Why It’s a Smart Pick: Institutional buzz from the Royal Academy and Thaddaeus Ropac bodes well for long-term value. The painting’s mix of raw color and conceptual depth still grabs attention in a crowded marketplace. If you’re comfortable riding out some volatility, this early piece packs serious potential for both bragging rights and future upside.

-Whenever You Are Ready-

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See you soon!

-Alvaro (@theartmarketguy)

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Disclaimer
Not financial advice. Frame&Flame is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.