Tim Goodman is no stranger to shaking up the artworld and is about to do it again with the re-launch on July 28th of his new auction house, Fine Art Bourse
(F.A.B.) targeting industry leaders with a flat 5% deal to both buyers and sellers.
EYEBROWS WILL BE RAISED
Some eyebrows may be raised with F.A.B.s first global cloud based auction, Erotic, Fetish & Queer Art, at 6.00pm Monday, 11 September (GMT - London Time). This follows a successful auction sale of erotic art conducted in London last year by Sothebys and the highly successful exhibition at the Tate, Queer British Art 1861 1967. . We are looking to source erotic art in the UK which has been home to some of the greatest collections of erotic art for years, says Goodman.
He believes that the industry dominated for over 200 years by a duopoly is ripe for a challenge given the huge charges they levy on their clients, anything from 20% to sellers and 25% to buyers plus a plethora of additional costs.
Indirect sales taxes as well as copyright and resale royalty charges, both of which directly benefit artists will also not apply because the hammer will fall on a Hong Kong server.
Goodman says: Digital technology has disrupted many industries. Now, it is about to happen again this time in the artworld. The High street art galleries are on the nose with the artists they represent. The traditional auction industry dominated by a duopoly is vulnerable, their fees spiralling out of control whilst their profits go south - and all this during an unprecedented art market boom.
Something has to give. For decades now the traditional auction industrys costs have risen far quicker than revenues like in many other industries. Auctioneers have understandably raised their charges. However, for a seller today paying up to 50% fees (including buyers premium) this is ridiculous and simply unsustainable.
I was a traditional auctioneer for 40 years having owned and operated the largest fine art auction enterprise in the Southern Hemisphere incorporating Sothebys Australia (under a brand license).
After selling all my auction houses to management buy outs in 2011 I started to conceive a new digital alternative. In 2014, Fine Art Bourse (F.A.B.) was born. It has taken three years to raise money, incorporate the global business structure and most importantly, build the technology.
F.A.B. is now ready. On 28 July 2017, we went live with a soft launch and an announcement of the first auction of Erotic, Fetish and Queer Art scheduled for 11 September 2017.
F.A.B. is a digitalised online auction house based on traditional values. We have no bricks & mortar or fossil fuel powered trucks and aeroplanes delivering thousands of tons of paper catalogues made from the worlds diminishing forests. We outsource our specialists.
We have started a journey to share our discoveries and change the way people do business in the artworld.
Further, the company has formed a strategic alliance with Australias oldest Aboriginal art gallery, Cooee Art, as the latter launches its new auction platform Cooee Art MarketPlace. Cooees first auction, a collaborative project with F.A.B. will be a hybrid combination of a live experience and a simultaneous online auction of Aboriginal Art scheduled for 14th of November 2017. Already consigned, the cornerstone work is the most important contemporary Australian painting to be offered for sale at public auction in a generation.
This is the first of a series of similar alliances to be announced by F.A.B. in the coming months.
The new online model is streamlined, eliminating the need to pack & ship lots to London or New York prior to the big auction events associated with those cities.
Unlike other online auctions, F.A.B. auctions will take place in real time, allowing bidders 30 seconds (extended if a bid occurs in the last 5 seconds) for each lot with telephone and absentee bidding still available. Again, unlike most other onliners F.A.B. has possession of the goods held in escrow providing guarantees of authenticity and good title.
The authenticity and good title of all lots are guaranteed for six years
Most traditional auction houses use their customers money to help fund their businesses. F.A.B. operates a custodian account at a third party listed institutional escrow service provider where all client monies are held in trust.
The traditional auction business model is no longer sustainable, says Goodman. Weve already competed with some of the big brands and won business against them. People come to an auction house for the service and for professional advice the best advice we can give sellers is to cut their costs and not pay huge fees.
As the world unremittingly grows more dependent on mobile devices, it only makes sense for art to join the ranks of industries disrupted by digital technology. With each coming generation, the leap to purchasing art online gets smaller and smaller, with portals like Instagram changing the dialogue by providing a platform for a new generation of younger people to admire influencers, source artists, and purchase art without third-party intervention.
Goodman believes that in the coming years, the process of buying art online has the potential to grow exponentially with a deeper and more robust secondary art market outcome.
Our mission is to democratize the secondary art market. To make more art more accessible to more people. Goodman said.
Rather than having the massive cost of immobile human resources providing for hundreds or thousands of full time staff, F.A.B. relies on a small team of financial and database administrators. In addition to this core staff, F.A.B. engages specialists from around the world for specific projects. From consignments to condition reports, FAB outsources the very best people in and outside the industry, providing a highly professional international service to both the seller and the buyer.
THE MOST IMPORTANT PAINTING OFFERED FOR SALE IN A GENERATION
The new venture between Cooee, Australias oldest Aboriginal Art Gallery and the worlds newest online auction house, Fine Art Bourse (F.A.B.) has consigned the most important Australian contemporary painting to appear at auction for a generation.
Earths Creation by Emily Kame Kngwarreye
A year ago, Goodman appointed a new board of investment bankers, raised new capital, re-designed and totally rebuilt the technology. F.A.B. went live at midnight last Friday, 28 July 2017. Three international auctions and a series of Australian sales are scheduled for the period to December 2017.
It has taken Goodman nearly five years and a journey of Pilgrims Progress proportions to build and launch, re-build and re-launch this groundbreaking venture. Why has nobody else done it? There is no answer to this commonly asked and obvious question.
Fees: 80% less
Packing & shipping: free worldwide
Sellers property stays in the country in which it is sourced.
No VAT, GST, Sales Tax, copyright fees or resale royalty
The F.A.B. Auction Platform provides unique user experience, including: number of people who viewed the lot, number of people watching the auction, the sound of a auction caller, 30 second countdown with 15 second extensions if a bid is received in the last 5 seconds of the countdown. Currency convertor, three different bid increment options instead of only one, bid history with identification of the nationality of the bidders, encrypted absentee bids and manual telephone bids, zero time lag on bidding, online bids, absentee and telephone bids clearly distinguished with icons, auction results in real time, ability for the auction caller to pause the auction and play a short video and/or show the viewers varying stills of the lot.
The F.A.B. indirect tax model is totally new and may become the thin edge of the wedge opening up loop holes for the legal avoidance of VAT, GST and Sales Tax on service charges in the future.
Under ancient Anglo Saxon common law, an auction takes place where and when the hammer falls. F.A.B. auctions take place on an electronic device in Hong Kong. Lots are located all over the world. Buyers and sellers are located all over the world. Fine Art Bourse Limited is a Hong Kong company. The contracts between F.A.B. and its sellers and buyers are completed within the jurisdiction of Hong Kong.
Hong Kong does not have indirect tax. Nor is it a party to treaties relating to resale royalty or copyright.
The jury is out as to what the United Kingdom will do about the hated artists resale royalty after Brexit. In the meantime, F.A.B. will not be charging it anywhere as its auctions take place in Hong Kong (unless otherwise instructed by the seller).
Currently the leading auction houses or the oligopoly as they are referred to, have built their own online auction platforms. Thousands of other auction houses mostly outsource their requirement of a live bidding platform to auction aggregators such as invaluable.com. If the bidder buys a lot on the aggregators live auction platform, the aggregators charge buyers an additional premium of around 5%. This spirals the traditional auction house charges to beyond 50% which anyone would agree is simply unsustainable.
During his 40-year career as a traditional auctioneer Goodman was to change the face and shape of the Australian fine art auction landscape. He was a visionary then as he is now with the launch of Fine Art Bourse (F.A.B.). He achieved the pinnacle of success as the Australian market leader and proprietor/operator of the largest fine art auction enterprise in the Southern hemisphere employing seventy staff with group annual sales over $60m. Tim has conducted hundreds of charity auctions raising over AUD$11 million. Goodman successfully conducted mergers and acquisitions including the iconic industry brands, Sothebys Australia, Leonard Joel and Theodore Bruce.