The click of a mouse, the sound notifying you of an incoming email – these are not sounds one would normally associate with a fine arts auctioning process. Enter Paddle8, the 4 year-old virtual auction house which has emerged as a force to be reckoned with.
Their business model is to be, in their own words, ‘an auction house for the 21st century collector through giving the global collecting community unprecedented access to online auctions of high-caliber inventory’. In other words to do everything that the grand old dames of auction houses, Sotheby’s and Christie’s, have done, but cater their business to a younger, more global and eclectic crowd.
That meant that three things were key:
- Providing convenience and enhancing the user experience of both sellers and buyers
- Offering pieces at price points which would not deter buyers from making their purchases online
- Ensuring that their inventory consisted of high quality, exciting works.
Hence, the online and mobile application platform to allow a globe trotting consumer base 24/7 access to inventory, pieces priced at a lower price segment (between $1,000 to $100,000), and having a highly experienced team of specialists to source for and authenticate pieces.
Paddle8’s online platform model has resulted in low operating costs for the company by doing away with the need to have a physical space and paper catalogues. In addition, their remote consignment model with sellers further reduces operating expenses, as the company does not need to bear the cost of storage or shipping of the pieces. Paddle8 has been able to transfer some of these savings back to both buyers and sellers in return, charging the lowest buyers premiums (12%-20%) and sellers commission (average of 8%) in the industry.
What the company has invested in is in a highly experienced team, consisting of veterans from both the art industry as well as the digital sector. In doing so, Paddle8 has been able to maintain a supply of unique, quality pieces which are showcased on a beautiful and easy to navigate platform.
Pre-auction: Sellers upload details and pictures of their pieces via Paddle8’s website or mobile application. Their team of specialists then provide free auction estimates within 5 days and work with the sellers to decide which auction platform (themed or private) would be most suitable for the piece.
Auction: After placing their initial bids for a piece, buyers are kept informed via email whenever they’re outbid, and can place a bid either through the website or mobile application.
Post-auction: Throughout this process the piece remains with the seller through a remote consignment model. Once the piece has been successfully auctioned off, Paddle8 acts as the middleman and makes arrangements to ship the piece to the buyer, who bears the cost of shipping.
The results of the effective alignment between the business and operating model? Half a million collectors from over 90 countries contributing to sales which are projected to increase two-fold from 2014.