To Auction or Not to Auction?

The emergence of auction houses go hand-in-hand with the creation of arts markets that put a public price tag on art. Nowadays, it is often noted that about 40-60% commission goes to the auction houses to cover media, handlingpublicity, auction fees, etc. So if you are thinking about consigning your art, here's a very brief introduction to what you might want to know / what it takes to list your artwork for auction:

Top 5 Auction Houses in the world: Christie's, Sotheby's, Heritage Auctions, Poly International Auction Company, and China Guardian. To locate the auction houses in your neighborhood, visit Artnet or similar directories.  

Since we are founded in Princeton, we will zoom into the two New Jersey-based auction houses for comparison: Rago Arts and West HIghland Art Brokers. Here's what each says about commissions and fees: 

Our commission rate is based on both the size of your consignment and its rarity. Our auction estimates are free of charge. Our experts can make initial valuations either through photographs and descriptions or by seeing your property at the auction house or on site. Unlike some other houses, our commission is all-inclusive. We do not offer a low seller’s commission and then inflate it with undisclosed surcharges for insurance, marketing or photography. Nor do we charge you a fee for bringing your property to market if it doesn’t sell, as many auction houses do. (This is called a buy-in fee.) If you are speaking with other auction houses, please make sure you ask them about all these fees before deciding where to sell.
— Rago Arts
First, we expertly appraise your art. Second, we buy your art for cash. Your art is then consigned to an auction house (like Sotheby’s or Christie’s) for public sale. If it sells for more than we paid you, you receive 50% of the profit, and we receive the other 50%. We buy original oil paintings and watercolors by ‘listed’ 19th and 20th Century artists with auction records. We do not buy prints or reproductions. If necessary we will have your painting cleaned, restored and re-framed, and split these costs with you.
— West Highland Art Brokers

For more information on the various fees that one may encounter when consigning for auction, here's an informative blog by Karen Keane. Do note that many auction houses, especially online auctions, only accept works from artists that have prior listings and auction records, creating quite the catch-22 for emerging artists. 

Generally, what auction houses spend their money on to get your artwork to sell include: catalog printing, gallery exhibitions, networking/courting buyers, paying employees, media glamour, curating, valuation and basically eliminating the "friend and family rate" from the exchange so profit margins can increase. This reinforces the fact that buyers/patrons/collectors will get a better deal going straight to the source (the artist), and sellers/artists would benefit from using intermediaries to increase the value of their art.