07.02.13 4:42 PM ET
Amazon to Start Selling Fine Art On Line
by Robert Frank
The gate-keepers of the art world have long dismissed online sales.
No one will pay millions for a painting they can't see in person, they have long said. Art is special. It can't be bought and sold like a mass-produced book or computer.
But news that Amazon is making plans to sell pricey art online may shake the foundation of the art world. And it could accelerate a sweeping shift—already underway at the auction houses and some galleries—where the art market is shifting from exclusive galleries and auction rooms to the online screen.
Reports from the Art Newspaper and the Wall Street Journal say Amazon is making plans to sell fine art online. The reports say the company is working with galleries around the U.S.—perhaps more than 100—to act as an online art market and collect a commission on the sales.
The online retailer is reportedly planning a major roll out of a grocery delivery business, reports CNBC's Courtney Reagan. And Kate Wendt, Wells Fargo Securities, weighs in on the impact this new service could have on grocers.
Amazon declined to comment on the reports.
Buyers can already purchase art on Amazon, but most of the items are cheaper posters, prints and watercolors. The most expensive pieces in the art category on Amazon tend to be under $400.
If Amazon starts selling six-figure or even seven-figure paintings, however, the company could send tremors through the staid world of professional galleries, famed for their big markups and limited market reach.
The Amazon model is fundamentally different from the big auction houses like Sotheby's and Christie's. Amazon would be selling art through the retail model, with fixed prices. Sotheby's and Christie's sell largely through auction, with competing bids for art consigned by sellers.
Still, auctioneers are proving that the market for high-priced art online is large and growing fast. Christie's says that about 27 percent of its $6.2 billion in auction sales last year came from online bidding at its regular auctions. It doesn't break out the total for its online-only sales in 2012.
Christie's last fall sold a $9.6 million painting by Edward Hopper, called "October on the Cape," to an online bidder. It also sold a $3.3 million Shang Dynasty bronze wine vessel to an online bidder in 2010. The company has been accepting online bids at its auctions since 2007, and in 2011 it launched its proprietary platform for online-only auctions offering art, wine, fashion and jewelry items.
Christie's is currently running an online-only auction of iconic computing devices, including an original, functioning Apple 1 computer from 1976. The company's four-day auction of "The Collection of Elizabeth Taylor," which fetched $183 million, included an online-only sale that featured 1,000 items and that fetched $9.5 million—about nine-times the pre-sale estimate.
Sotheby's BidNow program allows visitors to view all auctions live online and place bids in real-time from anywhere in the world. In addition to a copy of the Declaration of Independence that was sold to an online bidder in 2000 for $8.1 million, the company sold a 16th century portrait of Giovanni Gaddi for $2 million last December.