Wednesday - 23 July 2014

A fifth of our sales are now online, say LAPADA members

24 July 2012Written by Ivan Macquisten

Nearly one in five of all sales by LAPADA dealers are now online, according to the fine art and antique dealer association’s latest survey, covering 2011.

That's almost twice the global average and just one of the statistics polled in a wide-ranging study that shows members are relatively bullish about prospects for business in 2012.

To appreciate how far things have come with the internet, LAPADA's 2007 survey polled only 7% of sales being made online. Having said that, there were still 21% of the respondents in 2011 who made no sales online at all.

The survey, conducted by international art market analysts Arts Economics, secured replies from over 15% of the membership, which stands at around 550, and found that, on average, sales enjoyed a gross profit margin of 37%.

Most encouragingly, an overwhelming majority held a positive outlook for the year ahead, with over half expecting sales to at least match those in 2011. While 28% of respondents anticipated somewhat higher or significantly higher sales, only 6% feared significantly lower sales for the period.

Business at the top end had held up since 2010, with 6.4% of respondents reporting total sales of between £3m and £5m for both years, while those enjoying sales of between £1m and £3m rose from 10.3% to 17.9%. Below this, however, average turnover fell, with 10% fewer dealers taking between £500,000 and £1m than in the previous year.

Despite all the headlines given to Far Eastern buyers over the past year or so, it is American clients who remain pre-eminent in importance to LAPADA dealers, accounting for nearly a quarter of all sales by value, followed by UK buyers at 20%. There is a considerable gap between them and the next most important nationality, Australians, who accounted for 8.4% of sales by value.

Meanwhile 72% of all business is still conducted within the UK.

Resale Right

The survey also revisits the Artist's Resale Right. Around 90% of all respondents deal in at least some form of fine art, although most are involved in areas that have not been affected by ARR until now, with only around 20% saying they had made payments. There is some evidence of dealers moving away from trading in works by living artists since 2010, but it is not clear whether this is significant. Average royalties paid dropped from £1750 to £750 over the period.

What is more of a concern, however, is the far greater number of works traded that were by artists who have died within the last 70 years and, as of January 1, 2012, qualify for ARR. The average number of such works sold per dealer in 2011 was 58, with the sales accounting for 23% of average turnover for the year. LAPADA called the anticipated effects for the coming year "worrying".

The average time per transaction given for administering ARR is 68 minutes.

When asked whether they had specific issues or difficulties with administering, paying or dealing with ARR, responses ranged from "None so far. Wait for it" to "Too many to list" and "No sales but still have to deal with their paperwork".

Internet Interest

The main focus of the survey, however, was the internet. Dealers who did not sell online gave a number of reasons for avoiding the internet. These ranged from "stock not suitable" and "not our way of doing business" to "I get enquiries but they never bear fruit" and "the difficulties of sending pieces securely".

There is still a feeling among some dealers that clients won't buy without handling pieces first and among others that they simply don't have the time to develop a web option for sales. There are others, however, who are working on improving their internet presence as a trading platform.

As buyers, meanwhile, dealers have been far more active across the board when it comes to the web, with 66% of respondents saying they had purchased stock via the internet in the past 12 months. The 34% who had not gave the same broad range of reasons for not doing so as they gave for their own clients not buying from them via the internet.

LAPADA chief executive Sarah Percy-Davis expects to spend much of the coming year trying to persuade non-converts that internet trading is an essential part of future business.

"In the coming year LAPADA, in responding to feedback from members, will be focussing its efforts on promoting our members online, thus raising the association's profile globally as well as promoting our industry as a whole to the home market," she said.

And she added: "We have already acted on our dealers' requests for more help with regards to internet business, as we have already announced a significant deal to benefit LAPADA members with the leading web marketplace 1stdibs."

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Written by

Ivan Macquisten

Tags

LAPADA

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