Phillips to Introduce Pioneering Bidding System Exclusively this Autumn

Phillips to Introduce Pioneering Bidding System Exclusively this Autumn

Phillips, a renowned auction house, is set to debut a groundbreaking buyer's premium model called Priority Bidding, starting this September (excluding Watches). This innovative approach aims to incentivise early and committed bidding, offering a discounted buyer's premium rate to those who submit priority bids at least 48 hours before the auction.

How Priority Bidding Works

The core mechanism of Priority Bidding allows buyers to submit a binding written bid at or above the published low estimate at least 48 hours before the auction starts. This bid not only locks in a discounted buyer’s premium rate for that lot but also applies to all subsequent bids on that lot, encouraging sustained participation with lower fees.

Key Features of Priority Bidding

• Early engagement: Buyers who make a priority bid early demonstrate serious interest and secure reduced buyer’s premiums.
• Discounted fees: These buyers pay lower transaction costs compared to standard buyer’s premiums, rewarding prompt commitment.
• Binding but non-final: The priority bid is binding in good faith but does not require buyers to commit to a final hammer price; it mainly secures early interest and a fee advantage.
• Encourages bidding momentum: The structure aims to create energetic bidding activity early in the auction, building price momentum.

Impact on Buyers

• Lower buyer’s premiums reduce transaction costs for committed buyers who declare their bids early.
• Buyers gain an advantage by securing preferential fees for all later bids on the lot, promoting active participation.
• Early bidding signals seriousness and could improve the competitive dynamic in the auction.

Impact on Sellers

• Increased early bidding interest provides greater certainty about demand levels ahead of the sale.
• Sellers benefit from stronger price momentum, as early bids help energise the auction atmosphere.
• The model reduces reliance on third-party guarantees or irrevocable bids, which have increasingly dominated the auction market.
• By encouraging authentic early commitments instead of pre-arranged guarantees, sellers gain better visibility and confidence in bidding dynamics.

Phillips' CEO, Martin Wilson, emphasised that this approach is meant to strengthen Phillips’s market position by balancing buyer motivation and seller confidence, potentially reshaping auction engagement norms.

Table: Summary of Priority Bidding Impact

| Aspect | Impact on Buyers | Impact on Sellers | |-------------------------------|----------------------------------------|---------------------------------------| | Early commitment requirement | Lower buyer’s premiums | More demand certainty pre-auction | | Discount applies to all bids | Reduced transaction costs for bidders | Better price momentum during auction | | Binding pre-auction bid | Fees locked in early, incentivizing early action | Reduced dependence on guarantees | | Encourages spirited bidding | More competitive, engaging experience | Stronger auction dynamics and confidence |

This model marks a significant shift in auction fee structures by proactively rewarding early bidder engagement while enhancing selling outcomes through upfront visibility and momentum generation. Dane Jensen, an art advisor, stated that the new fees at Phillips should have a limited impact, primarily affecting moderately priced lots.

The updated rates for New York sales are: 29% for hammer prices up to and including $1 million, 22% for the portion above $1 million and up to $6 million, and 15% for the portion exceeding $6 million. Priority bidding rates begin at 25%, decreasing to 20% and then to 14% for portions above $6 million. Watch auctions will continue to use the existing buyer's premium rates.

The new bidding structure will be used in London, Hong Kong, Geneva (for jewelry only), and Paris, with hammer prices listed in local currency and corresponding to approximately the same thresholds as the New York sales.

This article was based on comments made by Dane Jensen to a news website. A correction was made to an earlier version of this article on July 22, 2025, regarding the deadline for priority bidding at Phillips. The new structure is a "first-of-its-kind buyer's premium structure" with "priority bidding." The new structure is expected to apply to live auctions beginning this fall and potentially to all categories moving forward.

[1] Phillips Press Release, "Phillips Introduces Priority Bidding," 2025. [2] Jensen, D., "Phillips' New Fee Structure: What Does it Mean for Collectors and Auction Houses?", ArtInsight, July 2025. [3] "Phillips' New Priority Bidding Structure: A Game-Changer for Auctions?", Art Market Monitor, July 2025.

1. The innovative Priority Bidding model, introduced by Phillips, encourages buyers to submit binding written bids at least 48 hours before auction starts, securing discounted buyer's premium rates and reduced transaction costs.
2. The new Priority Bidding structure, a first-of-its-kind in the auction market, aims to incentivize early and committed bidding, creating a more competitive, engaging experience for buyers and providing greater certainty about demand levels for sellers.
3. Early bidding under the Priority Bidding model applies a discount to all subsequent bids on a lot, promoting active participation and building price momentum during the auction.
4. Phillips' CEO, Martin Wilson, believes that this approach will reshape auction engagement norms, balancing buyer motivation and seller confidence while potentially reducing reliance on third-party guarantees or irrevocable bids in the art market business.

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