What Sotheby's is and how it operates

Sotheby's is a publicly traded auction house that sells fine art, jewelry, watches, wine, and collectibles to buyers around the world. The company holds auctions in New York, London, Hong Kong, and other cities, both in person and online. When you buy at Sotheby's, you are bidding against other buyers in real time. When you sell through Sotheby's, the house markets your item, conducts the auction, and takes a commission from the sale price.

Sotheby's has been operating since 1744. It is one of two major international auction houses (the other being Christie's). The company is owned by Berkshire Hathaway and trades on the New York Stock Exchange under the ticker BID. This means Sotheby's is a for-profit business, not a neutral marketplace — it makes money when items sell and when prices are high.

Key Takeaways

  • Sotheby's charges buyers a premium on top of the hammer price (the final bid amount), typically 25% for items under $5,000 and lower percentages for higher values.
  • Sellers pay Sotheby's a commission that ranges from 10% to 20% of the sale price, depending on the item category and sale total.
  • To sell at Sotheby's, you submit your item for evaluation; the house decides whether to accept it and estimates what it might fetch.
  • Sotheby's holds auctions in multiple cities and online, with different departments specializing in art, jewelry, wine, watches, and other categories.
  • Buying at auction means you pay when ready after winning a bid, and you are responsible for arranging shipping and insurance unless Sotheby's offers those services.

How the buyer's premium works

When you win a bid at Sotheby's, you do not pay only the hammer price (the final bid amount). You also pay a buyer's premium, which is a percentage added on top. For most items, the buyer's premium is 25% on the first $5,000 of the hammer price, 20% on the portion between $5,000 and $30,000, and 12% on anything above $30,000. This means a $10,000 hammer price actually costs you $11,500 before tax and shipping.

The buyer's premium varies slightly by auction house and by sale category. Some Sotheby's sales have different tiers. Always check the auction estimate sheet or the online listing before you bid, because the premium structure is printed there. The premium is non-negotiable — you cannot bid without agreeing to pay it.

How to sell an item through Sotheby's

To sell at Sotheby's, you contact the appropriate department (art, jewelry, watches, wine, or collectibles) and submit images and details about your item. A specialist evaluates whether Sotheby's will accept it. The house does not take every item — it focuses on pieces with estimated values above certain thresholds, which vary by category. For fine art, that threshold is typically $5,000 or higher. For jewelry, it may be lower.

If Sotheby's accepts your item, the house provides a pre-sale estimate (a range of what it expects the item to sell for) and schedules it for an upcoming auction. Sotheby's handles marketing, cataloging, and the auction itself. You do not have to do anything on auction day. After the sale closes, Sotheby's deducts its commission and sends you the proceeds, usually within 30 to 45 days.

The seller's commission at Sotheby's ranges from 10% to 20% of the hammer price, depending on the item type and the total sale value. Higher-value items and certain categories (like contemporary art) may have lower commission rates. You should ask about the exact rate before consigning your item.

Understanding pre-sale estimates and reserves

Before an auction, Sotheby's publishes a pre-sale estimate — a range showing what the house expects your item to sell for. This is an educated guess based on comparable sales, condition, and market demand. The estimate is not a may provide. Items regularly sell above or below the estimate.

Many sellers also set a reserve, which is a minimum price below which the item will not sell. If bidding does not reach the reserve, the lot is "bought in" (unsold). The reserve is confidential — buyers do not see it. If you set a reserve, you typically pay a fee to Sotheby's if the item does not sell. Reserves protect you from selling at a loss, but they can also discourage bidders who worry the reserve is too high.

Bidding and payment at Sotheby's auctions

You can bid at Sotheby's in three ways: in person at the auction house, by phone with a Sotheby's representative, or online through the Sotheby's website or app. Online bidding is available for most auctions. To bid, you must register in advance and provide payment information. Sotheby's may require a credit card or bank details to verify you can pay if you win.

When you win a lot, payment is due when ready. Sotheby's accepts credit cards, wire transfers, and checks, though wire transfer is preferred for large amounts. You are responsible for arranging shipping and insurance unless Sotheby's offers those services (which it does for some categories). Shipping costs and insurance are separate from the hammer price and buyer's premium.

Differences between Sotheby's locations and online sales

Sotheby's holds auctions in New York, London, Hong Kong, Paris, and other cities. Each location has its own calendar and specializations. New York is the largest market for contemporary and modern art. London handles Old Masters and British art. Hong Kong focuses on Asian art and contemporary pieces from Asian artists. Online-only auctions run continuously and typically feature lower-value items or broader categories.

Online auctions at Sotheby's work the same way as in-person auctions: you bid in real time, the highest bidder wins, and you pay the hammer price plus buyer's premium. The main difference is that you cannot inspect the item in person before bidding. Sotheby's provides detailed photographs and condition reports for online lots. If you are bidding on a high-value item, you can request an in-person viewing at a Sotheby's location or ask for a video inspection.

What happens if an item does not sell

If an item does not reach its reserve (or if there are no bids at all), it is bought in and does not sell. The seller does not receive any money, but the seller may owe Sotheby's a buyer's fee or insurance charge if those were included in the consignment agreement. Some sellers choose to relist the item in a future auction or try a different sales channel.

If your item is bought in, Sotheby's will contact you to discuss next steps. You can ask for the item to be returned, or you can negotiate a lower reserve and try again in the next appropriate auction. Repeated buy-ins can damage the item's market perception, so it is worth discussing strategy with your Sotheby's specialist.

Frequently Asked Questions

Can I bid at Sotheby's if I live outside the United States?

Yes. Sotheby's ships worldwide and accepts bids from international buyers. You will need to register with a valid payment method and may face additional shipping, customs, and import duties depending on the destination country. Some items have export restrictions that may prevent delivery to certain countries.

What is the difference between Sotheby's and Christie's?

Both are major international auction houses with similar buyer's premiums and seller commissions. Christie's is privately held; Sotheby's is publicly traded. They compete for the same consignments and often hold auctions on the same days. The choice between them usually comes down to which house has a stronger track record in your item's category and which specialist you trust more.

Do I have to use Sotheby's to sell my art or collectible?

No. You can sell privately, through a dealer, at a regional auction house, or online through platforms like eBay or Artnet. Sotheby's is best for high-value items with broad appeal. For lower-value or niche items, a smaller auction house or private sale may be more cost-effective.

What if I win a bid and cannot pay?

Sotheby's takes non-payment seriously. If you do not pay within the agreed timeframe, the house may pursue legal action, ban you from future auctions, and sell the lot to the next highest bidder (who then becomes responsible for payment). Always bid only on items you intend and are able to pay for.

How long does it take to receive payment after my item sells?

Sotheby's typically sends payment 30 to 45 days after the auction closes. The timeline depends on whether the buyer has paid and whether there are any disputes about condition or authenticity. Wire transfer is the fastest method. Checks take longer.