Amazon.com has expanded into a new market: Art. The Amazon Art marketplace launched this month with more than 40,000 works, a few of which aren't from the bargain basement: a $1.45 million Monet, for example, and Norman Rockwell's Willie Gillis: Package From Home for $4.85 million.
The seller is M.S. Rau Antiques of New Orleans, which says it's the largest art retailer in North America and has its own online catalog. So why join the Amazon marketplace when it takes a commission of between 5 and 20 percent on each sale? Can they charge more to make up for it?
"A lot of our pieces have slight wiggle room in them," owner Bill Rau said. "All that means is that there'll be a little bit less profit."
Talking to Rau, it seems clear that he doesn't think that Amazon threatens brick-and-mortar galleries — all of which can also drive sales on the site — as much as it does smaller online art marketplaces, such as Artsy, Artnet and ArtQuid. Having a gigantic reach makes an online platform much more valuable.
A gallery might be represented on another site but if it's getting most sales through Amazon anyway, it might figure it's just not worth the trouble — and if Amazon wants to compete even more aggressively, it can lower its commissions (Artnet charges 15 percent, and Artsy charges between 10 and 15 percent).
Tyler Cowen points out that eBay's auctions are valuable for a buyer, and that a sticker-price site might not work well for high-end stuff. But there's nothing to prevent Amazon from developing an auction capability. And if the price is really too high, a prospective buyer could go around Amazon and ask the seller for a lower price; visibility might trump the pricing mechanism in this case.
That's frustrating for some of the smaller online marketplaces, which have put a lot of thought into new ways of discovering art.
"I don't think what Amazon is doing is very innovative," said Patrick Coughlin, co-founder of ARTtwo50, which allows artists to list their own work and has an iPad app that will show you what the piece would look like on your wall. "What they're doing is perpetuating the model that currently exists. They're putting galleries online, which has been going on for 15 years. There's nothing innovative except the scale."
Eventually, Amazon may just decide to buy up the smaller marketplaces that have something unique to offer. Discussion, for example, is still valuable; Amazon could acquire Artsy for its commenting platform, just as it bought Goodreads for a center of chatter around the books it sells. Which might mean you can have your gigantic, relatively transparent, consolidated art market — and your cozy community as well.