Description
This is document describes about case analysis of sotheby's.
Sothebys.com
Problem The commission and related fees has declined by 2% on sales of goods at auction. Also the revenue from “Other” option has declined by 2%. The expected consigned lots have increased in 2000 but many of which are of below $1000 category. Also, the question remains as to where the auction should be conducted i.e. physically or online. It is given in the case that they are spending a lot of time in training associates and making them comfortable with Sothebys process. Analysis The decrease in commission and revenue from others (percentage wise) in spite of increase in sales of goods is because many of the goods may be below $1000 category or of lower values. Due to this Sothebys may not be able to charge higher amounts as premiums to the person who is selling the lot. Although the increase in no of lots have decreased the salary and related costs (as percentage of ‘sales of goods at auction’) due to better utilization of resources either the specialist or the packing personnel. But the improved efficiency hasn’t generated revenue in the same proportion. It is advisable that Sothebys stop selling goods which are less than $1000 as it may not be attractive to the customer (buyers). It is given in the case that sometimes for a typical purchase of $300 the buyer has to spend around $500 for packaging and transportation of the item/lot. This is not a good value proposition for the buyer. Also, such goods the buyer may be able to buy from a normal brick and mortar company rather than buying on Sothebys.com Having associates/dealers is a good idea as it increases the number of lots on the website. At the same time it also increases the number of lots with value less than $ 1000. Care should be taken by Sothebys to allow only those lots which are premium and higher in value. As a result of this they will be able to get higher revenue with respect to the time spent. The time spend by
specialist in making sure that associates understand the process of Sothebys is important and it is only a one time investment of time. Sothebys should continue training the associates and increase the number of premium lots on its website.
doc_614311138.docx
This is document describes about case analysis of sotheby's.
Sothebys.com
Problem The commission and related fees has declined by 2% on sales of goods at auction. Also the revenue from “Other” option has declined by 2%. The expected consigned lots have increased in 2000 but many of which are of below $1000 category. Also, the question remains as to where the auction should be conducted i.e. physically or online. It is given in the case that they are spending a lot of time in training associates and making them comfortable with Sothebys process. Analysis The decrease in commission and revenue from others (percentage wise) in spite of increase in sales of goods is because many of the goods may be below $1000 category or of lower values. Due to this Sothebys may not be able to charge higher amounts as premiums to the person who is selling the lot. Although the increase in no of lots have decreased the salary and related costs (as percentage of ‘sales of goods at auction’) due to better utilization of resources either the specialist or the packing personnel. But the improved efficiency hasn’t generated revenue in the same proportion. It is advisable that Sothebys stop selling goods which are less than $1000 as it may not be attractive to the customer (buyers). It is given in the case that sometimes for a typical purchase of $300 the buyer has to spend around $500 for packaging and transportation of the item/lot. This is not a good value proposition for the buyer. Also, such goods the buyer may be able to buy from a normal brick and mortar company rather than buying on Sothebys.com Having associates/dealers is a good idea as it increases the number of lots on the website. At the same time it also increases the number of lots with value less than $ 1000. Care should be taken by Sothebys to allow only those lots which are premium and higher in value. As a result of this they will be able to get higher revenue with respect to the time spent. The time spend by
specialist in making sure that associates understand the process of Sothebys is important and it is only a one time investment of time. Sothebys should continue training the associates and increase the number of premium lots on its website.
doc_614311138.docx