Sothebys.com Inc. yesterday added a retail option in addition to its auction pricing mechanism, a move meant to widen its customer base.
Sothebys.com, the online arm of Sotheby's auction house, added a “Buy Now” function on its site, allowing visitors to purchase select lots for a predetermined price that is higher than the low estimate. EBay.com and Amazon.com already have this option against select listings.
“The Sothebys.com associate or dealer who offers the property sets the `Buy Now' price, but it has to be above the low auction estimate,” said Patty Fox, spokeswoman for Sothebys.com, which debuted in January 2000.
So, a Sothebys.com listing that has a “Buy Now” option will be marked with a blue “Buy Now” button. The lots will list both the “Buy Now” price and the low auction estimate side by side, and they will pop up when the user searches for lots within a category, special sale or through an advanced search.
“If a bid is placed on a lot that has the option of 'Buy Now,' the 'Buy Now' option goes away and it becomes a regular auction,” Fox said.
Sothebys.com's 5,000 dealers, who supply the lots, also set the auction estimate and “Buy Now” prices. An estimated 1,600 lots have been listed under this dual pricing mechanism.
“The dealers obviously not only understand auctions, but they understand the retail model perfectly well and so having a fixed price is of interest to them,” said David Redden, chairman of Sothebys.com.
“We don't get any commission on the selling side, but we get a commission from the buyer,” he added. “So that's where we get our reward.”