Published: March 15, 2016
By Laura Beach
NEW YORK CITY — A March 1 letter from 1stdibs CEO David Rosenblatt to online sellers has some dealers questioning their partnership with the e-commerce giant. The letter, along with a linked message to participating merchants, outlines the company’s increasingly aggressive tactics for monitoring sales and extracting commissions on transactions initiated on the site. The new policies are set to take effect on April 4.
Dealers, who already pay the company sizable listing and processing fees, say the measures are both intrusive and arrogant, violating their privacy and that of their customers while treating specialists, who have spent years honing their expertise and developing collectors, as servants to 1stdibs’ corporate ambitions. Their resentment mirrors that expressed by writers and publishers toward another online middleman, Amazon.
“All 200 of us at 1stdibs are singularly focused on using the Internet to drive more sales to your business. Fifteen years ago, this meant curating your listings, attracting buyers through ads in newspapers and sponsoring antiques shows and fairs. In recent years, however, buyers have dramatically changed the way they shop, and competition from global retailers and auction houses has increased substantially,” Rosenblatt wrote.
“We strongly believe that investing in e-commerce and sophisticated marketing programs will enable 1stdibs and our dealers to continue to thrive for the next 15 years — and well beyond. In 2016 we expect to drive 50 million visits to the site. In order to invest in marketing at this level, it’s critical that we are able to measure the success of every effort and earn commission for sales we drive,” he continued.
Rosenblatt wrote that 1stdibs’ investment, expected to top $20 million in 2016, justifies the new measures, including the remote monitoring of telephone conversations between dealers and their customers. According to the CEO, the company spends heavily on advertising, search engine optimization, personalized emails, low shipping rates and purchase protections for buyers and sellers.
The list of FAQs, or frequently asked questions, accompanying Rosenblatt’s letter outlines the company’s position and instructs merchants on how to conduct their business and even how to speak to their customers. When a prospective buyer contacts a dealer through the 1stdibs website and an order results, the sale must be completed as a transaction on 1sdibs’ platform. The dealer is obligated to pay the commission stated on the dealer’s rate card, plus the processing fee. The policy applies to both new and repeat customers.
All inbound calls forwarded to the dealer’s telephone number may be recorded for what 1stdibs calls “quality assurance.” The company states, “While we will not be listening to the calls, our system software will scan these recordings for indicators that either party is attempting to move the transaction offline and we will then follow up with the dealer directly.”
Dealers may not charge a different price for an object listed on 1stdibs than they ask for it on their own website, in their shop or at a show. Dealers are prohibited from offering discounts for sales moved off the 1stdibs platform and are instructed, “When setting your prices or negotiating, please take into consideration all of your business expenses including your 1stdibs commission.”
In lieu of discounts to the trade, dealers are told to inform their wholesale customers of 1stdibs’ generous shipping and return policies. What if a customer wants to buy from the dealer directly? The FAQ states, “Remind the customer of all of the benefits of shopping on 1stdibs and that we are partners. You could say something like: ‘1stdibs is my partner and helped you find this piece. I would prefer if we could complete this sale on 1stdibs. There is no difference in price if you buy online or from me directly; however through 1stdibs this purchase would be eligible for lower shipping rates and will be fully insured by 1stdibs directly.’” 1stdibs directs dealers to notify their account manager if the customer insists on purchasing “off platform.”
Rosenblatt writes, not without justification, that 1stdibs is the only company of its kind “at this level of scale.” Dealers routinely tell Antiques and The Arts Weekly that, to date, no similarly structured online selling platform delivers comparable results, as measured by volume of inquiries and sales.
In the end, many business decisions will come down to money. Dealers who are profiting from 1stdibs are likely to continue with the service, says one top dealer, who wonders if 1stdibs’ heavy-handed grab for commission income suggests an inability to repay its investors on listing fees alone.
For some, however, the current fight transcends economic concerns. As one well-known specialist told Antiques and The Arts Weekly, “More people are buying online. I know that from my own website. But in our world people still want to make personal contact. 1st Dibs is trying to make us all faceless. The fact that they think dealers and their clients would agree to having their calls monitored shocks me.”
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