The Art of Auctioneering
by
Anayat Durrani
Auctioneers are the ones who run the show at auctions. Auctioneers must be adept at computing a constant barrage of numbers, all the while keeping their attention on bidders in the audience. They must maintain an upbeat, sophisticated, charming personality to encourage bidders to produce bids in increments that yield exorbitant sales at auction close. And, at the same time, the auctioneer must make the bidder feel they have made an exceptional purchase and eager to return for more.
"A good auctioneer knows how to charm the room. He should be charismatic whilst being focused on the job at hand," says Charlie Thomas, auctioneer at Bonhams in London where he serves as Head of Department, Knightsbridge Furniture and Works of Art.
Auctioneering is indeed an art. It takes a special talent to be successful at auctioneering. And only those who possess those unique skills do well live on the auction floor.
"[An auctioneer] needs to be able to keep a calm head under pressure and above all to hold the attention of the bidders," says Thomas.
Several factors are at play on the floor. And a good auctioneer must be skilled at keeping one step ahead of the game. From the bidder seated in the fifth seat third row, to the anxious bidder on the phone, the auctioneer must see and handle all things at the same time, while moving the sale.
"Once the auctioneer takes to the rostrum he controls every aspect of the sale," Thomas told Fine Art Registry™ "He takes bids from buyers in the room and those on the telephone, as well as absentee bids that are left on the book."
Absentee bids left on the book are those made in advance of the auction. Auction catalogs list items to be sold at auction, and are sometimes available by mail or through an auction house's website. Each item in the catalog is typically listed with a lot number. The catalog can include descriptions of each item up for auction, such as their provenance, history, photographs, dimensions and other related details. The catalog also includes an estimated price or a "reserve" price below which the item will not be sold.
"An auctioneer must always be aware of the reserve on the lot and must not sell the lot beneath that price," says Thomas.
When potential buyers arrive at auction they register for a bidder number. Some auction houses ask that clients pre-book seats for the auction. Potential buyers make bids in the room by using numbered bid cards or paddles. Nods and hand signals are sometimes also used in some auction houses, such as the horizontal hand motion, which means a bidder would like to bid half of what the auctioneer is asking. However, nods and hand signals should only be used at auction houses that use those forms of bidding. No matter the method used by the bidder to place a bid, it is the job of the auctioneer to ensure the going price of the item steadily increases as they go along.
"When taking bids an auctioneer must make sure that he uses the correct increments. This is normally 10% of the last bid," says Thomas.
Potential buyers are provided with the printed terms and conditions for that particular auction, which are normally found in the auction catalog. The terms and conditions outline the policies, terms and rules related to the sale at auction. The terms and conditions may state, "all sales are final" or "property sold as is" and discuss payment and other important information related to the auction. Not all art auctions are the same and terms and conditions may vary from auction to auction. Auction houses typically offer a preview a few days before the actual auction. On the day of the auction, many auctioneers will answer questions before the auction begins and some even do practice or warm-up sessions.
Art Auctions at Sea
[What are called "auctions" on cruise lines are very different from what is described above. They are not really auctions so much as art sales conducted in the carnival/vacation atmosphere of a cruise, with bidders mostly under the influence of free alcohol provided by the "auctioneer". The auctioneers aboard cruise lines know virtually nothing about art. In fact, one auctioneer who was going to be hired by Park West, when it was discovered during her training that she had degrees in art and art history, was promptly let go. It seems that many of the sales people who work for the cruise line art "auction" companies are genuinely ignorant, at least to begin with, of the fact that the posters and prints they are selling are virtually worthless and that they have been appraised by the "art auction" company in house for sums averaging several hundred to thousands of percent more than they cost and are worth. Since these so-called art auctions on cruise lines have become very popular and result in a steady stream of people who have been duped and defrauded, it is worth knowing the viewpoint of one of the people who was conducting these so-called art auctions. Ed.]
Following is a Q&A with a former Park West auctioneer who has worked on all major cruise lines.
What makes a good auctioneer?
"I believe there are three keys that unlock the door to a good auction: good art, willing crowd, good auctioneer. A good auctioneer knows the art, knows the artists and knows how to watch and listen to the audience without prejudice. Never pre-judge a customer. Ability to pay is not the same as willingness to pay. Watch body language, listen to the questions, who's asking them, who's the decision-maker, do they collect art for perceived investment or visual enjoyment?"
What is it like on the floor live for an auctioneer at sea?
"There is in fact a difference [between land and sea auctions] because on the ship, your audience is not necessarily there because they love art and want to collect. Some like auctions in general, some have never been to an auction before, cruises are the perfect time to try new things, there is no obligation to stay, there is no charge to attend, there's free champagne, there's a free gift, and, for those who have done it before, they know it is going to be entertaining. As a matter of fact, I frequently had people come up to me afterwards and tell me that they really enjoyed the "show". On the contrary, at land auctions, people come because they collect art. Regardless of their reasons for being there, you must assume that everyone is a potential buyer."
What type of art is sold on the ship?
"The art on the ships are serigraphs, lithographs, etchings, engravings, woodcuts, lino cuts, and giclées some hand embellished. The artists are contemporary artists who have achieved a certain level of international success and who have a specific style which makes them special or unique. In addition, there are some original paintings. The pieces by the masters (Picasso, Chagall, Dal&icute;, M&icute;ro etc.) are graphic works...limited edition original prints, most hand signed, all authenticated, all guaranteed authentic. I emphasize that last bit because it is not always the case and I know for a fact that there have been issues of authenticity with at least two other companies that do this."
[As covered in a variety of other articles on the subject of Park West at Sea, much of the work offered for sale is not authentic: Dalí prints that are not part of the official Dalí catalog; embellished prints where the embellishment is carried out by some minimum wage MFA in the basement and passed off as embellished by the artist himself, and so on. It is interesting to note that this auctioneer seems to really believe that the art she was selling was all guaranteed authentic. Ed.]
How do the Park West auctioneers know that a certain art work is really worth what is stated?
[Again, this is hard to believe since the Park West at Sea mark-up is often over 1000% and many who have bought art from the Park West at Sea gallery have gone home and tried to sell their bargain art only to discover that nobody is about to pay anything like what they paid for it. Ed.]
Do the auctioneers do their own research or accept PW prices at face value? Is there any due diligence on the part of the auctioneer?
"I think in the beginning, you just accept PW's word. As time goes on, experience will do a lot for you. Just like any other profession, it always pays to know what your competition is up to. Each artist demands a certain price for their art, therefore, almost every piece by Peter Max, in the same size and medium, is likely very similar in price. As far as due diligence, I can only answer for myself. Whatever port we were in around the world, I always checked out the local galleries and compared art and prices where applicable. PW prices were always better, especially in Maui. I was on the internet poking around all the time and your very best source of info...ALWAYS LISTEN TO THE CUSTOMERS! If ever a customer told me that they saw the same piece somewhere else for a lot less, I would get on the internet and check out what they told me. Every single time it was an unsigned piece or a poster."
Do you think the art being auctioned off by Park West is worth the prices it's going for?
"Some of the PW art is well priced based on the market. Some are perhaps a little higher than the market, but I think that's true of every item you buy on land also. First of all, you MUST compare apples to apples. You can bid on a Tarkay, limited edition, hand signed serigraph through PW and if it's a new release, it might have a $250 opening bid. You can buy artwork by the same artist on the internet for $25. Are they the same? Not by a long shot! They are likely either unsigned posters or not even by the artist. Most people don't know the difference, some don't care. "Looks the same, 1/10th the price, my friends will be impressed". This is the same market segment who buys fake Rolex watches, fake leather sofas and no name brand foods. Looks the same, but a fraction of the price. That's all fine and dandy but you can't compare apples to oranges or a real, hand dipped, buttery caramel apple to a styrofoam ball painted red and dipped in glossy toffee colored paint. They may look the same but...I think perhaps some of the collectible artwork may be a little higher priced than some land galleries, but still in line with many others. Let the buyer beware. If you want a fantastic deal on something, you should do a little research to at least know what the prices are elsewhere, and don't forget to compare apples! Regarding appraisals: the purpose of an appraisal is for insurance documentation. The amount of the appraisal is always much higher than the market value of the item. The assumption is that if the item gets lost, stolen or destroyed and you are now required to replace it with the exact same item, you may get lucky and find it or something similar enough. If you want the SAME piece of artwork you lost, an agent can perhaps locate one through a dealer and it is in a private collection. Well the owner may not be willing to part with it at market value and you may have to pay a surcharge or you may have to commission the artist to paint another one. The appraisal is an estimate of replacement value taking all these scenarios into consideration."
[Much of the art sold by Park West on the cruise lines is very far from original and absolutely not irreplaceable. You can pick the same piece up on eBay for a fraction of the price. You know it's the same piece because it's been "authenticated" by Park West of course. It's hard to tell if this auctioneer really believes what she is saying. If she does, then that's what she was told in her initiation into Park West because it is simply not the truth. Ed.]
You hear about auctioneers at Christies or Sotheby's, for example, making gigantic sales at auctions all the time. Are Park West auctioneers taught a certain method toward achieving those big sales? How do they/you get the sale so high?
"Every piece of art on the ship is listed on the computer inventory. When the auctioneer is at the podium, they have a laptop with the detailed item listing including the art info but also the $$$ details. For each piece there is an estimated value and the reserve. "House bids" are normal auction practice and are done very openly. There may be a bid below the reserve. The auctioneer may accept the bid, ask for additional bids and then also bid for the house in order to increase the bid to get it to the reserve. The auctioneer will say something like "the bid is with me at $4,000, do I hear $4,500?" The other alternative is to refuse the low bid, which you can reasonably do if the bid offered is so ridiculously low (say a $50 bid on an item with a $5000 estimate). There are other methods I know of that are not only deceiving but terribly uncomfortable. PW strictly forbids use of any of them with the penalty being dismissal."
[Do not be misled by this statement. The fact that a Park West "auctioneer" is placing a "house bid" on a piece of art which is owned by Park West in the first place and also "authenticated" and "appraised" by the owner of the "auction house" is actually monstrous. It violates the very fiber of the Uniform Commercial Code on the subject of auctions. Real art auctions consist of auctioning off the property of a third party. In that case, a "house bid" actually means something. It means the auction house is prepared to buy that piece from the seller, a third party, for that sum. If that was the highest bid, then the auction house would be buying it from the seller for that price. This is not the case in the Park West cruise line "auction" at all. Here the piece is already owned, and usually manufactured (printed) by the "auction house" Park West. So if they bid on a piece and no one bids higher, it just means they havent sold the piece and one of the next luckless crowd that shows up for the three ring circus (sorry "auction") will get a chance to become the proud owner of the usually worthless piece of paper. If this sounds a little bitter, we are on the receiving end of the complaints by the victims of these "auctions" who get home from their cruise with their great "bargain" only to find out that they have been duped and the piece they paid $17,000 for is really worth $1,500 if they're lucky. Ed.]
Does the winning bidder actually get the exact piece that was auctioned or does PW have stocked art on board that buyers can take home with them?
"The short answer is no, they usually don't get the one on board, but it makes no difference at all. On board, you will find one piece from an edition. If the edition is 300, say 75 ships have an art collection, each ship can only sell one. Each week you get an updated Point of Sale program for your laptop and it lists your inventory on it. If it is a really great piece, it could be sold out in 5 weeks that way. Sometimes, with new editions, the auctioneer may choose to do what we call a "multiple sale" or "blind bid". These are ALWAYS a great deal for the passengers, and the auctioneer could sell 20-30 of them in one shot. If the auction is a blind bid, the client can opt out of the deal if they don't like it when they see it. That whole myth that the smallest numbers in the edition are the most valuable is a crock! The numbering doesn't mean a thing with serigraphs or lithographs. It can matter with etchings but etching and engravings are generally released in small editions of 25-50 anyway."
How do people who buy art at sea actually get their artwork home?
"Almost all the artwork is shipped directly from the warehouse to their address, anywhere in the world. There are a couple of exceptions: If the piece is the end of an edition, the gallery will indicate on the computer that the buyer MUST take this piece with them off the ship. The benefit to this is that you save the shipping and framing charge, but it is only possible if the buyer lives in the ships debarkation port, or if they are staying there long enough to arrange transport via Mailboxes Etc/FedEx etc. Also, the buyer has the option of taking a painting with them if it is a unique, one of a kind piece (original painting). Before 911, the airlines used to let clients take huge pieces on the plane as carry on. Now, there is NO WAY you can do that."
How many pieces are typically on hand for a sea auction and how do they get all their inventory on ship?
"The onboard collection depends on the available space on each individual ship. All ships get the same core collection, and then more pieces are added depending on the storage facilities the auctioneer has. When I first started out, the collection was around 300 pieces but as the years went on, the program became more successful and the collection grew. The last ship I was on, the collection was around 1000 pieces plus the e-gallery which had many, many more high end works available for viewing by appointment. Inventory arrives to the ship every few weeks, in boxes and containers, usually in the debarkation/embarkation port a.k.a.turn around or home port. It is complicated but the machine is well oiled and it is a beautifully choreographed dance by now."
As an auctioneer, if you or other auctioneers should run into any problems onboard, who do you go to for help/guidance? Does anyone supervise you or are you on your own?
"The Hotel Director is a senior officer and is your direct contact on most ships. Sometimes it is the Revenue Manager or whatever title they give them. That person is your "go-to" guy/gal for shipboard issues like, venue, storage, display or announcement. Regarding art questions, 24 hour support from the gallery (ships are sailing in all time zones so someone is always on duty to help you), it pays to forge good relationships with other auctioneers who may know the answer to your e-question straight away. A phone or email message to the Sales Manager will almost always be returned within 24 hours. I was always getting email inquiries from new auctioneers whom I had met at a conference or in port. You tend to be in port with the same ships over and over so I always emailed the ship, found out who the auctioneer was and then arranged to meet over coffee the next time we were in port together. If you have a good relationship with the security people on your ship, you can sometimes arrange to transfer excess catalogues and promo materials from one ship to the other if another auctioneer is desperately short. There are very clear guidelines on the ship regarding acceptable behavior, branding, signage, announcements, cabin deliveries, etc., so unless you are young and foolish and the ships staff think you are arrogant and snotty (some auctioneers are puffed up and condescending), you can usually coast under the ships radar. If the passengers like you, there will be positive remarks on the "comment cards" and the officers will like you. If the ship likes you, PW is tickled pink. If your sales are good, you're a star and everyone likes you. In this case, there are no problems so no need to ask anyone anything. Problem solved!"
[Calling these art sales at sea "art auctions" is a complete misnomer. They actually do not fit into the description of an auction as defined in Black's Law Dictionary or as covered in the Uniform Commercial Code (see articles on this subject ). They are really a show and would be amusing were not so many people fraudulently deprived of so much money as a result of the false representations made as to the value of the items up for sale. As a result of the fraud and rip-off they are actually very harmful and come under the heading of deceptive trade practices and should be outlawed.
Perhaps the cruise lines will wake up at some point to the fact that these high revenue carnival "auctions" which use the cruise lines' reputations to lend credibility to their smoke and mirrors shows will eventually ruin their (the cruise lines') reputations and put people off cruises in general.
Real art auctions can be great fun and can result in valuable acquisitions of art that is collectible for its beauty and its potential as an investment.
One must be careful to distinguish between a genuine, serious art auction and the carnival-like, alcohol-ridden dog and pony show that passes for an art auction on most of the cruise line ships today. They are a sad commentary on the gullibility of the general public and the willingness of the unethical strata of society to take advantage of it. Ed.]
— Anayat Durrani
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January 22, 2008
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