Sotheby's swift reversal of its recently implemented premium fee structure signals a miscalculation in understanding the art market's dynamics. Initially, Sotheby's reduced buyer fees to attract clients, but sellers responded negatively to fixed fees and incentives. Market conditions were complicated by jitteriness due to an impending US election, leaving potential sellers hesitant. The psychological aspects of buyer behavior versus seller priorities further complicated matters. Ultimately, Sotheby's experienced the largest drop in evening sale totals among major auction houses, losing market share to Christie's in the process.
Sotheby's reversal of its new fee structure reflects miscalculations regarding the dynamic and psychological aspects of the art market, leading to a loss of market share.
The timing of Sotheby's changes coincided with a jittery pre-election market, making potential sellers hesitant to enter the fray.
Buyers at auctions experience a unique emotional drive, making them less sensitive to premium costs, while sellers focus solely on negotiating fees.
Despite offering lower buyer fees, Sotheby's found that sellers remained cautious, exhibiting a stickiness that hindered their supply acquisition.
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