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- đ„ Alvaro minutes: Pricey Auction Realities + Rachel Jones
đ„ Alvaro minutes: Pricey Auction Realities + Rachel Jones
Hidden fees crush seller profits
-In a Minute-
đ„ 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 donât forget cataloguing and marketing costs, especially for in-person auctions, which can tack on another 5-7%.
So, letâs 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 Râs 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 topâsay 20%. That means your piece needs to hit $84,000 at auction.
Online auctions? Theyâre cheaper but not free. Costs still hover around 30% for low-value works. Youâll need a smaller miracle, but a miracle nonetheless.
Now, toss in buyerâs premium (20-25%), which doesnât 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 buyerâs premium. Donât count on it unless your piece is museum-grade.
In short: if your work doesnât clear at least 140% of its hammer price in three years, youâre 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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-Todayâs Catch-
Rachel Jones
đ My 2 Cents: Iâve 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.
đ Key Numbers: She boasts a 100% sell-through at auction, although the average sold price plummeted 88% between 2022 and 2024âouch. âRed Cranes in the Dirtâ 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.
đ§ Why Itâs a Smart Pick: Institutional buzz from the Royal Academy and Thaddaeus Ropac bodes well for long-term value. The paintingâs mix of raw color and conceptual depth still grabs attention in a crowded marketplace. If youâre comfortable riding out some volatility, this early piece packs serious potential for both bragging rights and future upside.
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-Alvaro (@theartmarketguy)
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