The consignor is the client. Bidders come to an auction because of what is in it, and what is in it comes from consignors, so an auction house’s long-term health is its consignor relationships. A consignor keeps legal title to each lot until the hammer falls, and the auction house acts as agent, selling the property under the terms of a consignment agreement.
The consignment agreement
The agreement sets the terms the auction software has to apply: the seller’s commission rate or schedule, any reserve per lot and who may lower it, charges for photography, insurance and cataloging, a buy-in fee if a lot is bought in, the settlement period, and what happens to unsold lots. It also usually gives the auction house the right to set estimates, to lot the property as it sees fit and to withdraw a lot it cannot authenticate. A clear agreement signed before the catalog is written prevents most settlement disputes.
The consignor statement
After the sale each consignor receives a statement listing every lot consigned, whether it sold, the hammer price, the commission and charges deducted, and the net amount due and when. Unsold lots show the reserve and the highest bid so the consignor can decide whether to re-offer at a lower reserve. Generating this statement from the clerked results, rather than retyping them, is one of the main reasons auction houses move from spreadsheets to auction management software; Circuit produces consignor statements and seller payments from the same lot records that produced the invoices, as described on the features page.
Keeping consignors
Most consignors never call back, not because the sale went badly but because nobody followed up after the statement went out. The auction house that tells a consignor what their lot made the same evening, and six months later tells them what a similar lot just made, gets the next consignment. We wrote about this in why most consignors never call you back; the short version is that the auction house CRM should track consignors with the same care as buyers, because the best buyers eventually become consignors.
