Dealers push excreta through the fan blades, following 1st dibs draconian changes. Read more in the New York Times:
On Tuesday evening, a sign was placed in the window of Lost City Arts, a high-end vintage design store in Lower Manhattan, saying the shop was closing early. Inside, 30 of the city’s top antiques dealers had gathered for a tense, hastily arranged meeting. Other dealers dialed in from Texas and California to hear the proceedings.
The topic: the online antiques marketplace 1stdibs and its new approach for enforcing commissions.
Jim Elkind, Lost City’s owner, addressed his colleagues, who sat amid the kind of $4,000 Italian floor lamps and $2,800 midcentury modern low tables that are routinely sold (or just ogled) on 1stdibs.
“This sort of reminds you of that moment in ‘The Godfather’ when all the heavyweight bosses from the mafia show up to the big party,” Mr. Elkind said to laughs. “I think we are a formidable group here.”
But as the dealers began to voice their concerns and frustrations, it became clear they view themselves not as powerful figures but as little guys being pushed around and financially squeezed by an influential company they have come to rely on.
Under its new guidelines, which are to take effect April 4, 1stdibs requires that all sales resulting from what it calls a “1stdibs lead,” or interaction generated on the site, be processed through the company, so it can charge a commission of as much as 10 percent. The move effectively closes a loophole whereby dealers could finish a negotiation offline, thus avoiding the fee.
The company will also start monitoring and recording conversations that take place over a message center and dedicated phone number where dealers and buyers interact.
“The idea of them having a recording of all of our phone calls, it feels Orwellian,” said Paul Donzella, owner of Donzella in TriBeCa and a 1stdibs dealer for more than a decade, who attended the meeting. “If I ask the buyer for their phone number, the site’s detectors will pick up those keywords and shut the communication down.”
Some dealers (though not Mr. Donzella) have already experienced such a rebuke from 1stdibs. And they said they are troubled by the way, in their view, 1stdibs is prizing revenue growth over dealer relationships, and increasingly removing the ability for them to work directly with clients or be forthright.
For instance, since 2014, dealers have been forbidden to tell buyers that 1stdibs charges transaction fees or refer to “1stdibs fees of any kind.” Guy Regal of Newel, a decorative arts store on the Upper East Side, told his colleagues at the meeting that it puts dealers in a difficult spot both financially and ethically.
Other dealers present, including Eric Appel and Dobrinka Salzman, said they would most likely have to raise prices or reduce or eliminate the discounts they routinely give to interior designers and architects. Yet they can’t tell their clients why.
“Do you understand the politics of that?” Mr. Regal said in a phone interview later, explaining that the antiques business is based on relationships. “You don’t spend $60,000 on something without seeing it, talking to the dealer and getting a sense of who they are.”
Indeed, the old-school way of selling rarefied objects face to face is clashing with the culture of a tech company focused on growth. Once an exclusive club for a few hundred tastemakers to sell their curated wares, 1stdibs now has more than 2,000 dealers.
For all the complaints about 1stdibs and talk among the dealers about staging a walkout, many acknowledged its crucial importance to their business, as well as the site’s ability to expose their goods to a global clientele.
Founded in 2001, 1stdibs basically pushed the antiques business into the 21st century, allowing dealers to rely less on costly brick-and-mortar stores and reduce the amount of time and money they spend on marketing. In recent years, the company has aggressively ramped up its staff and marketing in its ambition to become a major global brand such as Christie’s or Sotheby’s.
David Rosenblatt, the chief executive of 1stdibs, defended the new policy as necessary for the company’s continued growth, saying that when he was hired five years ago, the site began transitioning from a place for dealers to advertise their goods to an e-commerce platform. The improved site, he said, has resulted in favorably negotiated deals with shippers, programs like fraud protection for dealers and online sales of $150 million so far.
“Like any company, we need to see a return on our marketing investment,” Mr. Rosenblatt said, explaining the reason for the dealer commission, which was introduced three years ago but difficult to enforce. (The site also generally charges dealers a fixed monthly fee and per-item listing fees that are credited back to them if the item sells through 1stdibs.)
Mr. Rosenblatt added that the new monitoring system was needed to prevent dealers from steering buyers offline to avoid paying a commission. Those dealers, he said, “reduce our ability to market on their behalf. We wake up every morning thinking about how to grow their business.”
While some dealers feel the fees are excessive (“They’re triple- and quadruple-dipping,” one exasperated dealer said at the Lost City meeting), others say the potential for profit and prestige is worth the cost.
“If you are providing me with a top-notch clientele all over the world, I am not going to be questioning the fees,” said Jimmy Lam, owner of Antique Textiles Galleries in Fort Lauderdale, Fla. “I am selling double or triple what I was selling three years ago,” before joining 1stdibs.
Mr. Rosenblatt said the customers will ultimately decide — and they are choosing to shop online. “If the dealers are not comfortable,” he said, “they have the ability to move their business elsewhere.”