Antiques Netshow

Steve Westly, eBay's vice president of marketing and business development, says that thousands of items costing over $1,000 are sold on eBay every day; hundreds of items over $10,000 are sold monthly. This is exactly why eBay is, in turn, about to launch its own high-end, professional-to-person auction area, complete with authentication and guarantees. "We didn't sit around and say 'They might want this, let's throw it out there,'" says Westly. "The users came to us by putting more and more expensive items on the site all the time."

EBay bought Butterfield & Butterfield, the world's fourth largest auction house, in April and is planning to launch its "upscale" auction area within weeks. The new "Great Collections" category will be housed on the eBay site and will be similar in scope to Sotheby's and Christie's: Using the Butterfield & Butterfield name as a draw, eBay is partnering with big-name galleries and dealers around the world to produce a professional-to-person auction, selling expensive and authenticated objects. Individuals who currently sell the more expensive items on eBay can continue to do so in the existing direct-sales categories, but to sell in the "Great Collections" area, they will have to go through an authentication expert and pay higher fees.

Initially, all three institutions will be targeting the same group of "expert" dealers and galleries -- and going after a market that, for now, is relatively small. For Sotheby's and Christie's in particular, this means competing with eBay, a brand that currently has much more online cachet.

"In the old world, Sotheby's and Christie's had the great brand, and because of the channels of distribution they could control the auction world," says Westly. "In the new world, where you don't have to go through one of those two or three auction houses, all of a sudden it gives the little guys the chance to work together with the company that works best for them."

Current eBay users like Jeff Hess are a perfect example of the type of person that Sotheby's, Christie's and eBay all hope to target. Hess is the author of a book on antique Rolex watches and is a dealer in fine jewelry and antiques with 20 years of experience under his belt. He currently moves nearly $1 million of merchandise a year on eBay, selling objects in the $2,000 to $10,000 price range every week. Hess is currently one of eBay's "Power Seller Gold," receiving special treatment for selling over $25,000 a month.

But Hess is about to abandon eBay, he says, because he's been invited by Sotheby's to be one of its 2,800 "Charter Master Dealers." (Sotheby's requires its partners to sign an exclusivity agreement, which forbids them to sell any item priced above $300 on competing auction sites.) Hess says he's "very excited" about working with Sotheby's, and is convinced that the reputable brand name will bring in more customers, particularly foreign collectors; despite his success on eBay, he believes that the site still scares off many people.

"EBay has dropped the ball because it's fostered this image of a flea market," says Hess. "It made a mistake by not fostering a more serious, higher-end image even though, obviously, it does have a lot of people that buy expensive, serious antiques."

But for Hess -- and other fine dealers in antiques -- these upscale professional-to-person auctions are not just the gateway to serious buyers, they could also drive the cost of selling antiques up and the audience size goes down.

While eBay currently charges a 1.25 percent commission on objects that sell for more than $1,000, Westly asserts that the new high-end endeavors will charge significantly more. Sotheby's will charge 10 percent to both the buyer and the seller. It's a more lucrative profit margin for the auction sites, but a risk for the middlemen like Hess. "Not only are you taking that gamble of moving to a less-trafficked site, but you're taking the gamble that sales will bring in 20 percent more," he explains. Still, he says he believes that the Sotheby's name will draw customers willing to fork out a little bit more.

But eBay pooh-poohs this argument, and is betting on its current market share to beat both Sotheby's and Christie's. Westly quotes a Media Metrix figure to say that 5.4 percent of all people on the Net visit eBay.com every day, while only .4 percent visit Amazon.com's auction service. Certainly, a quick visit to both sites shows eBay's current advantage: for example, Amazon.com's "Ancient World" antiques area has merely 387 listings, while eBay's boasts 1,844. If you're trying to find an obscure item or a willing buyer, Westly argues, you are still more likely to find it at eBay than Amazon.com.

"In terms of success at high-end auctions, it's completely driven by how many people will come," says Westly. "EBay is already doing hundreds and hundreds of these items; when we consciously bring in more merchandise from around the world with authentication, in concert with this huge audience, we'll do very well."

Of course, once Sotheby's launches its marketing campaign and draws on its international customer base, the balance could change.

One of the stranger aspects of these high-end auction areas on eBay and Amazon.com will be their competition with the direct sales taking place in the open areas of the sites. The launch of the upscale auctions could pillage the existing antiques area of eBay; however, the opposite could also be true.

Since many smaller sellers may not want to go through the hassle of taking their antique to an expert for an authentication and then paying the extra commissions -- slapping it straight up on eBay is cheaper and more time effective -- the unmonitored auction areas may continue to be richer hunting grounds for quirky items. They could also be more appealing for bargain-hunters.

And as Karen Ewart, an antiques dealer who sells 10 to 20 expensive items a day on eBay, explains, "Buyers may believe they will get a 'more fair' price for the item they are interested in with the 'small independent' vs. the 'large conglomerate.' We shall see."

But the main hope is that the market is simply going to grow in both directions, making room for both the chaotic open markets and the new dealer-sanctioned auctions. Hess is optimistic: with the brand names hitting the Web, he says, "the market is going to explode for upscale items."

Redden of Sotheby's, in turn, talks about the emergence of a materialistic American marketplace that has "a growing fascination with objects and antiques ... We know there's a strong marketplace for what we sell, but it's constrained by access. When we expand the access, it will grow like wildfire."

The question, ultimately, is whether the risk and chaos of person-to-person auctions is truly a drawback that needs to be eliminated -- or whether it's what lures people to sites like eBay in the first place. Do people want to buy expensive antiques from what is essentially a gallery or dealer working online -- even if they are competing with strangers for the price? Or is half the fun of online bidding the fact that your "find" is buried within a democratic frontier that lists $200,000 gemstones next to $5 leather fanny packs -- and that the seller could be a person just like you? Will the frivolous nature of throwing a few hapless dollars down on a whim -- the basis of eBay's success -- still keep things fun when you're dealing with heirlooms and artwork?

Of course, in the world of expensive antiquities, and wealthy collectors, the rules may change. "If you have some wherewithal," Redden puts it obliquely, as he talks about Sotheby's moneyed customers, "you can have fun. It's all relative."

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