The distinction between auction sales and retail sales is blurring as auctioneers move into the traditional dealers’ territory, writes Diggory Hadoke.
Watch collectors have been getting used to buying direct from auctioneers for some time. Take a look at Christie’s ‘Watch Shop’ on the website and see how it works.
Instead of waiting until auction day, interested buyers can simply browse the watches online and click to buy one instantly. In this respect, Christie’s is not operating as an auction house, but as a watch dealer.
The days of the dealer buying at the auction and selling to the retail customer from his shop are fading. It looks like gun sales may be heading in the same direction. Unsurprisingly, Holt’s is leading the charge.
Recent figures will tell the analyst that auction sales on the day are dwindling. The overall figures remain decent, with post-auction direct sales making up the shortfall, but a lot of punters seem to be avoiding the sale room and waiting to hoover up unsold lots at the reserve price. Holt’s is making an increasing percentage of its money in the online sale of unsold lots.
Nick Holt told me last month that his customers are changing in the way they like to buy. The internet age is generating a demand for instant gratification. The direction of the market is ‘buy now,’ an option provided by Ebay and familiar to millions of that site’s users.
As an innovator and a survivor, Nick has decided to move into the new age before sales figures dip significantly. Holt’s, after all, is a company with a large monthly wage bill that has to be paid on the back of four sales a year.
Now there is a new page on the Holt’s website, branded as ‘Holt’s Shop’. By clicking on this, browsers will see an array of guns that are listed for sale. To buy one of these, individuals can make enquiries online. A sales service will then follow and the purchase can be completed. Holt’s shipping and packing department will take care of the logistics and deliver wherever in the world is necessary. It’s as easy as that.
Holt’s has made its name and its money by dominating the gun auction market. To move into gun retail is something of a departure. Could there be a downside? I asked Nick Holt if he had considered this. As a commentator and a gun dealer, I saw a number of potential issues with this rather bold move into retail:
Conflict with other dealers
Although not without its tensions over the years, part of Holt’s business dynamic has been the auctioneer/retailer relationship. Traditionally, auctioneers provide the trade with a way of moving difficult stock. Acting as a clearing house, with an emphasis on wholesale terms, the nature of the auctions has significantly differed from that of the traditional dealer. Until now.
To fill the auctions, Holt’s does, to some extent, rely on the co-operation of the wider trade. As Holt’s is not seen as being in direct competition, this relationship has worked for years. Dealers offer more security to buyers, auctioneers sell cheap and move items that are hard to get rid of. The relationship benefits both parties.
The new style of sales will put Holt’s into direct competition with the dealers. Will these dealers be inclined to co-operate with a company that will become a rival rather than an alternative?
Holt’s sees its website becoming a hub for sales, relying on the massive hit rate it achieves to tempt dealers to hand stock over to it for listing, instead of using their own websites, which probably do not attract as much traffic.
We shall have to wait and see how the trade reacts to this. Some will reject it for reasons of pride, others will be reluctant to hand retail business to what is, in effect, another dealer. I am sure some will see an opportunity to sell, using Holt’s resources, and will make use of it.
Legal changes in the terms of sales
Any retail sales will have to allow for a period of inspection and rejection, as the old auction adage of ‘sold as seen’ and the warning ‘buyer beware’ attached to each sale will not hold in these changed circumstances. This should not prove too much of an obstacle for UK sales. However, guns sent overseas will potentially be more troublesome.
Further undermining Holt’s auction sales
The possibility has to be considered that Holt’s retail will be in competition with Holt’s auctions for attracting premium lots. Nick Holt has considered this and told me certain guns have to be sold through an auction: those from deceased estates being clear examples, as well as those which are below retail quality or condition, or unique guns of special provenance.
Nick sees the retail section of Holt’s as being focused on high-quality, good-condition guns that are unlikely to have any comeback. Unlike listing sites, such as Guntrader, Holt’s will require the guns it retails to be sent to the company in Norfolk for cataloguing and storage. They cannot be listed elsewhere at the same time, and Holt’s will be free to represent the guns as it sees fit, as sole agents.
Confusing buyers with mixed messages
Holt’s has been selling the public the benefits of auctions for well over a decade now. It has made the auction environment more accessible and, as a result, has seen retail buyers attending and bidding as well, at the expense of the wholesale trade.
To now start pushing the standard retail website model as well as running an auction may be sending mixed messages as to what the company is all about. A measure of the success or failure of the project will be how skillfully it manages this.
The December auction in Hammersmith will be the first one to fall under the new scheme. It will be interesting to see how well it is received by the trade and by the public. It is a bold move and one that is sure to provoke a reaction.