Rarely does the month go by without at least one breathless announcement, sent by some young, enthusiastic entrepreneur or his even more enthusiastic publicist, of a new art sales website, one unlike anything Internet commerce has ever seen before, one that offers everything the art buyer could ever ask, and above all, certain to “disrupt” (a favorite word, apparently) the art market globally, send Sotheby’s and Christie’s packing, and for good measure, do your laundry, too.
Okay, maybe not the laundry part.
But virtually every one of them promises the rest.
(Note to publicists and Internet market startup geeks: you are not disrupting anything. You will not change the dynamics of the art market. Really, you won’t.)
There are, of course, exceptions: The Spotlist makes no such boasts, for instance, nor does Artspace. But with the Observer’s Gallerist proclaiming 2014 the “year of truth” for the Internet art market, I thought I’d review the two enterprises I’ve come across most recently: Lofty.com, a New York-based site, and WeCoin88, based out of Brussels, Belgium. And after all, if we're talking about culture meeting culture, selling art on the Internet is about as close as it gets to defining our own right now.
I’ve selected these two largely for a single reason: the distinction between them elucidates what this “year of truth” is likely to reveal, exposing much of what is wrong about the wanna-make-a-million-bucks-and-art-is-the-new-black-motivated endeavors, and about what is right about those created by people who actually know – and care – about art and business, and about putting them together with intelligence and good will. That distinction matters – not just because one is distasteful and the other praiseworthy, but because it marks the likely future successes from the probable crashing failures.
WeCoin88 takes its name in part from the fact that the number “88” is the symbol of fortune and good luck in China, where they hope to focus much of their business. An initiative of Tutela Capital, a firm that focuses exclusively on providing advice and market analysis to art investors and high-end collectors, it is also the only online art marketplace I know of that really does take an innovative approach, whatever the chest-pounding claims of its competitors. For one thing, WeCoin88 doesn’t work with ordinary money. It’s entirely Bitcoin-based. “By focusing our efforts on Bitcoins rather than traditional currencies,” Tutela's co-founder Fabian Bocart explained to me in an e-mail, “we can drastically cut infrastructure costs to offer a buyer transaction fee of only 3.8%, and 0% for the seller while helping sellers tag artworks at a fair price (we eliminate overpriced artworks from the platform altogether)." What determines whether a work is “overpriced”? Tutela’s analytics, of course.
Once appraised, each work is individually inspected by Tutela’s experts in-house, and where necessary, local experts are brought in as consultants. “We produce a condition report internally and if we spot something wrong or if we have doubts about authenticity, we warn the buyer and ask if she wants to continue with the transaction after having received our independent opinion on the artwork,” explains Bocart. “If yes, we send the artwork to the buyer and the funds to the seller; if not, we send the artwork back to the seller at our own cost.”
So far so good. But with all prices on the site listed in Bitcoin, it’s virtually impossible for your average collector (or me) to judge what the prices actually are in “real” money – you know, dollars, euros, pounds, even Swiss francs. And while I respect Bocart’s market analysis enormously, I was disappointed to find very few names I recognized among WeCoin88’s first offerings. Worse, one of the names I did recognize was Natalia Goncharova, whose work is frequently forged. Granted, WeCoin88 offers a 12-month authenticity guarantee, but I’d have wanted to know that there was some real expertise – a certificate, a catalogue entry, something – behind the work; and the site mentioned none of these. (Bocart, however, assures me that provenance and other information is always available on request, and pointed to the 12-month authenticity guarantee.)
But beyond this, there is the matter of a potential conflict of interest. If Tutela is in the business of recommending certain artists as investment, should the same company also be in the business of selling works by those same artists?
Bocart laughed at the suggestion. “Good idea!” he said by e-mail. “Pushing artists by claiming it's a good investment. I should consider doing it.” Then he added, on a more serious note:
“From this point of view, I think you are right: short-term, it's impossible for uninformed investors to tell if we are honest or dishonest. We have built a reputation amongst art investors and funds. I have had many occasions, as have my colleagues, to bank on reports, and we have had several offers by dealers to produce such reports specifically to promote their artists, which we don't do. So to this day, we have not played that game, and I think it explains why we have thrived and why people trust our advice. With WeCoin88, we only aim at filling a new gap in art market efficiency. Only time will consolidate our reputation in this field, and it's too much a precious asset to spoil it. Otherwise, how would we be different from any Lambda dealer?”
Okay, he convinced me.
To their credit, too, WeCoin88 makes no pretense of aiming to unseat the major auction houses, as, say, Lofty’s and ArtViatic’s founders have been known to do, or to “disrupt” the entire industry. In fact, remarks Bocart,“WeCoin88 may yet be another online business that's going to smash the wall, or barely survive, which is even worse for an entrepreneur. In 300 years, it's clear that Sotheby's and Christie's have proven they were very resilient; In the same time frame, after all, France defaulted on its debt twice. So it's clear that from a pure historical/financial point of view, trying to take down these two mammoths is more difficult than to bring a big country down to its knees.”
Instead, Bocart explains, WeCoin88 has its own targets, which he describes as “investors, speculators, mavericks, bitcoins millionaires, entrepreneurs, nouveaux riches and real art lovers.” In other words, he's not pretending to avoid the speculators, as other e-commerce art sites do. But he takes a somewhat utopian view of it, centered on the image of a universe filled with people who are all rich, cultured, and happy; or as he puts it: “WeCoin88 is not for snobs. We are there for the pragmatics, the people who are actually interested in consuming art or investing in art and not the creepy social game around it. We are building our own little world in which everybody will be able to prosper and get rich and enjoy art.”
In many ways, this was the impulse that also drove 28-year-old Harvard MBA Mark Lurie to found Lofty.com: to create a place where pretty much anyone could buy or sell art and antiques. Concerned that the best opportunities were reserved for those living in major cities, Lurie aimed to create a site where even the most rural farm-dwellers would have the possibility of having family heirlooms evaluated by experts and sold to those who would recognize their value – and pay for it.
It’s a good concept. But I have the feeling it just doesn’t quite do the job. The art on the site is mediocre, for the most part, while the decorative arts are more high-end. The jewelry is a rather eclectic mix. The “vetting” Lurie repeatedly brags about isn’t what I would call “vetting” at all: it’s all done on the basis of photographs, and very few items ever actually receive an in-person inspection. One has the feeling, really, of visiting a good flea market or country auction. And despite “lofty” boasts, the site just doesn’t impress – though it’s a fun place to browse.
Founded in June, 2013, Lofty first came to my attention this winter through its publicist, whose press release cheerily informed me of all the new and revolutionary features the site had to offer: It would “bring transparency to what was previously an ‘iffy’ process” of buying art online. “ (Is buying art online “iffy”? If so, doesn’t that really have to do with how much you trust the venue? Is it truly “iffy” to buy art online from, say, Christie’s, or Gagosian, or even through 1st Dibs?)
Even more, I learned, buying through Lofty would “provide a prized intangible long missing from the online marketplace: peace of mind.” (Now when I search for peace of mind, I’ll know where to find it.) And Lofty also did something “most online websites” (are there websites not online?) fail to do: provide a seven-day money back guarantee and a five-year authenticity guarantee.
But there was more – a barrage of exaggerated claims that made me cringe, either because they were simply untrue or just plain laughable, like – and Lurie really did say this – the fact that the items come directly from the sellers allows Lofty “to promote and sell items that traditional auction houses would refuse, e.g. furniture.” (italics mine).
Or the claim that the site is the only one with staff experts to appraise the works that are presented for sale (just an outright untruth, as anyone from i-Gavel to Artnet to Artsy will attest.)
Or that the company’s fees are “lower than most dealers and auction houses.”
Well –no, they’re not.
Lofty charges a ten percent fee to buyers, and 15 percent to sellers. That’s a hefty amount compared to the ten-twenty percent dealers generally charge, and triple Paddle8’s eight percent. In fact, it’s not that much lower than the exorbitant costs imposed by Sotheby’s and Christie’s (though a long way from i-Gavel’s whopping 40 percent combined charge).
But okay. Overlooking the many exaggerated claims made by Lofty’s publicists and founder (and really, you can’t blame him; he’s never studied art history. He’s never worked in the art world), what is different about Lofty is that it is not, in fact, an art commerce site. In essence it’s a kind of a second-hand store with a few random items oddly thrown in for auction -- a kind of Vestaire.com for art, jewelry, and collectibles along with a bit of designer fashion (though unlike Lofty, Vestaire allows you to negotiate with sellers, and all commissions are reflected in the prices that they post).
So as a player in the “Internet art market” race, I’d tend to hold Lofty (and those like it – of which there are more than Mr. Lurie seems to be aware) on the sidelines. For the most part, after all, the art on offer at Lofty is insignificant, except for a $230,000 Dale Chihuly chandelier that weirdly seems to have gotten mixed in among the $1000 canvases, a $16,000 Tom Lovell painting, and signed-in-the-plate Miro editions.
And speaking of those Miro editions, Lurie also informed me that while they will inspect some items in person, particularly jewelry, most things offered on the site do not go through a physical review. And though he pointed out that Lofty "has had no returns" of artworks sold to date, he also refused to tell me how many art works had actually sold, which makes the claim somewhat empty. Buyer beware.
Indeed, it is that lack of a physical inspection that is most troubling. Lofty repeatedly brags about “vetting” the items that it sells. But vetting – proper vetting – is not done on the basis of photographs. It involves real inspection of real items, in detail. Lisa Ramaci, a freelance appraiser and consultant to a number of auction houses -- including some that specialize in Internet sales -- insists that items should always be examined prior to offering. "We have to see anything of any value that we agree to sell before we sell it,” she says. “Not only does it need to be examined firsthand, it needs to be catalogued and checked for condition issues. If photos come in and things look interesting, the potential consignor is called and told, we like x, y and z, and based on the photos we will give them an auction estimate of x-x; but once we see the property firsthand those estimates might go up or down depending on what we find.” In the case of one internet-based auction client, she recounts, "we got in a bronze Buddha that looked great in photos and was given a $5,000-7,000 estimate; but when we saw it, it turned out to be a fake worth $35 -- so back it went."
On the other hand, some offerings in Lofty’s decorative arts and jewelry sections are—if not exactly 1st Dibs material – intriguing, and many of these do, it seems, go through a proper vetting process. (Lurie describes the decision to inspect an item as being “based on common sense.” Whatever that means.)
In fact, despite my bruising initial skepticism, when I visited Lofty’s site, I found myself drawn to a particular diamond band, one unlike any I’d ever seen before. But the photos were hazy. Lurie had told me many of the items were photographed with the owners’ i-phones, like on e-Bay or Craig’s List, and this was clearly one of them. Nor could I quite figure out how the ring could, as its description stated, be resized. There’s no way to cut an infinity band.
So I e-mailed the Lofty team for more info and better images. What was the grade of the stones? I asked. And was the ring all diamonds, or was part of it plain gold? If so, why was that part neither shown nor mentioned in the listing?
Indeed, I learned, the diamonds did not go all the way around. They sent a photograph to show this. Other images they sent, however, were no clearer than the ones on the site. And no one ever answered my question about the quality of the stones.
Again, it’s not really that I think Lofty is a bad site. It isn’t. But its claims are simply ridiculous. It is not revolutionary. It is not groundbreaking. It is certainly not, as Lurie maintains, “disruptive,” a force winding up to knock Sotheby’s and Christie’s (the latter of which boasted $20.8 million in online sales last year) to their knees. It’s just – another place to buy expensive second-hand stuff on the Internet, with a better guarantee than some, more expertise behind the items sold than many, and higher fees than most. And if it had been presented that way (and if the listing about the ring had been a bit more honest), I probably would have liked it a whole lot better – though my experience with the ring was enough to keep me from probably ever going back. And I certainly, given their "iffy" (to use their word) art authentication policy, wouldn't buy an art work there.
WeCoin88, however, is different -- even sans "disruptive" ambitions. But it, too, has its share of kinks to work out; items can be listed by anyone at anytime, for instance, in order to facilitate the process and make it “seller-friendly,” but at the risk of offering an item for sale that is below WeCoin88’s own strict standards, or which, worse, has authenticity or condition issues. (Lofty, by contrast, at least reviews photographs of each item prior to posting.) Bocart assures, however, that because the buying process takes time on WeCoin88, no one can actually complete a purchase before an item has been physically reviewed by Tutela and WeCoin88 staff and a full condition report issued – something that, in fact, few other such sites provide. If a problem should be discovered, the buyer will be notified and given an opportunity to withdraw from the sale. It's good, and certainly better than I've mostly seen elsewhere. But I still don’t like it. No reputable company should be offering art it hasn’t fully checked out first.
But then, perhaps I’m a dinosaur. Maybe that’s just the old way, and in the world of e-art sales 2.0, finding an art dealer you know and trust, visiting his or her web site, and making an inquiry from there – knowing that the works on view have already been fully vetted and approved – is just too old fashioned nowadays. (What, go to a gallery? Like, and see the art yourself, and not a jpeg of it? People really do that?) But something tells me that, in the long run, the classic will outrun the trend. The e-commerce billionaire-wannabes will realize their billions are better found somewhere else, and collectors – real collectors – will still buy art that they can see, that they can touch, that they can trust. Marvin Gaye knew: There just ain’t nothin’ like the real thing. In love or in art.
Editor's note: First published 12 April 2014