(Bloomberg) — Phillips, the auction house best known for catapulting the prices of hot young artists into the stratosphere, is moving into e-commerce. Starting on Aug. 20, the auction house will launch Dropshop, a buy-now platform at which collectors can purchase fine art.
The traditional auction house model doesn’t benefit artists directly. In the US, artists receive no proceeds from secondary market sales; in fact, wildly expensive auction prices can damage young artists’ long-term career prospects.
On Dropshop, however, artists will sell their work directly to collectors, and Phillips will collect a fee. (The auction house declined to disclose the figure.)
“It’s something that’s appealing to both sides,” says Amanda Lo Iacono, Phillips’s global managing director of 20th century and contemporary art. “We identified this ability to act as a platform for artists and bring them into direct contact with collectors.” The auction house is sweetening the deal for artists by offering them a 3% portion of the proceeds if a piece purchased on Dropshop is then resold through Phillips. “We’re trying to expand how we can shift our place in this ecosystem,” Iacono says.
Each month, Phillips plans to offer a new release—often by stand-alone artists, although down the line Iacono allows that the house might hand the site over to a gallery or curator that could involve multiple creators. “We’re really dedicating each month to one artist or maker or collaborator, and they get the full real estate of Dropshop,” she says. “When that month is over, the works are gone,” she continues. “It’s not a marketplace. They’re not available in perpetuity.”
Works on the site will range in cost from $5,000 to $50,000, with a few exceptions.
Launching With a Bang
The first artist to offer work on the platform is Brooklyn, New York-based “hyperrealist” Cj Hendry, best known for detailed depictions of luxury collectibles, which she tends to sell via Instagram or directly out of her studio. She’s recently branched out into more experiential art such as a jungle-gym style “interactive” exhibit in Brooklyn that included a ball pit.
For her Dropshop launch, Hendry will install 50,000 inflatable crowns in Phillips’s Park Avenue headquarters, among which she envisions crowns she calls “golden tickets.” Admission on opening day will be free; anyone who finds one of the special crowns will be entitled to a free artwork—a bronze crown painted red, created in an edition of 100. Hendry will also be selling a unique, large-scale drawing on the site for around $100,000. The rest of the editioned crowns that aren’t found will be available online. Prices for those will be announced on the day of the opening.
“This is great for them, it’s great for me, and they’re working as fast as I work,” says Hendry in an interview. “They can clearly see there’s a need to reach a younger contemporary collector, so it works well for everyone.” Her direct-to-collector sales model suits the site well. “I don’t have a gallery, so I’m not stepping on anyone’s toes,” she says. “I go straight to the horse’s mouth.”
The Competition
The world of online print sales is hardly virgin territory. Exhibition A sells a variety of prints and original works, as do Avant Arte and Platform, David Zwirner Gallery’s e-commerce site. Individual artists have set up sophisticated platforms of their own: Daniel Arsham sells editioned work and collectibles directly from his site, as does the artist KAWS. The site of Sotheby’s, Phillips’s much larger competitor, offers a “buy now” section at which collectors can purchase prints and multiples by artists including Ed Ruscha and Kehinde Wiley.
Even if the work isn’t necessarily consigned directly by the artist, the final product—an editioned artist print—is the same. And this doesn’t include the vast world of sites selling non-editioned prints (see: the Cool Hunter) and collectibles.
“There are several great companies doing really interesting things in the space,” says Iacono, who adds that “no one has quite the same breadth of what we do.”
Headwinds
Dropshop’s launch comes at an awkward time in the lower-end of the fine art market. The pandemic-era craze for lower-priced artworks and objects has faded as the buyers of those works—presumably people whose disposable income is more limited than, say, that of Picasso painting collectors—face a rising cost of living. Last year, the market for sub-$50,000 artworks at auction fell by 14% from 2021, according to a UBS report, even though the volume of works for sale fell by only 5%.
Still, Phillips says 2023 is on track to be its best-ever year for edition sales. Last year’s $40 million total was the highest in company history, the auction house says, and it’s already notched $22 million in edition sales with almost five months remaining.
“In general, we feel really confident with the growth and robustness we’ve seen in contemporary art and editions,” Iacono says. “A lot of these [Dropshop] partners have demand that is not being met through other channels, whether it’s their gallery or however they’re reaching collectors. We hope we’re on the vanguard.”
Source: One of the World’s Oldest Auction Houses Gets Into E-Commerce – BNN Bloomberg
