:No press releases emanated from 1334 York Avenue, nor was there a banner proclaiming it on the firm's website, but in a January 12 internal memo Sotheby's notified its staff that, effective immediately, it was raising its buyer's premium to 20 percent of the hammer price of the first $500,000 and 12 percent of the rest.
Since 2005, the auction house had been charging 20 percent on the first $200,000 and 12 percent on any amount above that. The example now provided on the firm's website under "Buying and Selling" states, "On a lot sold in New York for a hammer of 750,000 USD, the buyer's premium would be 20 percent on the first 500,000 USD, and 12 percent on the remaining 250,000 USD, for a total buyer's premium of 130,000 USD. The purchaser would then pay Sotheby's 880,000 USD (not including any other applicable fees, such as taxes)."
Under the previous commission structure, the purchaser would have paid Sotheby's $856,000 in the example above.
In Sotheby's London salerooms, the US dollar threshold will be converted to £250,000, in Hong Kong it will be HK$4 million and other salesrooms will use an appropriate local conversion, according to the memo.
"While this change will only impact a very small percentage of the lots we sell worldwide, it will further strengthen our business and our ability to compete in this challenging marketplace," the memo said.
No word yet on whether Christie's plans to follow with a similar fee increase, but two years ago when Sotheby's moved to "adjust" its fee to 20 percent of the first $200,000 of the hammer price from 20 percent of the first $100,000, Christie's quickly adopted the new pricing.
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