Sotheby's Ups The Stakes

Sotheby’s has raised the commission charged to buyers on big-ticket auction purchases worldwide, reports Lindsay Pollock for Bloomberg. Sotheby's informed employees by e-mail on January 12 and has posted the fee increase on its website under “Buyer’s Premium.” Previously, the buyer’s commission was 20 percent on the first $200,000 bid at auction and 12 percent on the balance of the total bid. Now, buyers will be charged 20 percent on the first $500,000, or an additional $24,000, and 12 percent on the balance. In the wake of record auction sales at Sotheby's and archrival Christie's, charging collectors and dealers more for their purchases is a way to increase profitability. The last time Sotheby's increased its buyer's commission was in January 2005. Within weeks, Christie's raised its commission to match Sotheby's; as of now, Christie’s has not announced any plans to raise its fees.