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What's the deal with 1stdibs?

- 06 Aug 2015 -
25 posts / 0 new
#1

Hi folks,


Just a question, why is it so that at 1stdibs everything is priced so high? For example most of the used Cassina LC stuff you can find on 1stdibs is even more expensive than if you would buy it new from the store...


Comments

- 02 Sep 2015

It is quite simple really: If you want a random obscure, relatively valuable piece of furniture, in good condition, and right now, where are you going to go?

1stdibs is basically the a distributed, predictive warehouse. It costs the hoarders quite a bit to purchase and restore all those items and then hold on to them, sometimes for years and years waiting for you to finally decide you are ready for the item. So it costs you a fair bit to get an item from the 1stdibs warehouse.

On the other hand if you are fine with whatever random junk in poor condition will show up in your neighborhood in the next week or so, you can imagine you might pay a bit less.

Does that make sense?

- 02 Sep 2015

A big part of their market is people with deep pockets who hire interior designers to do up their places and shop for stuff for them. Designers typically get a percentage of the budget for a project, so the higher the price, the bigger their cut.

1stDibs gives dealers a venue where they can reach this market and where the market can reach them without a lot of running around (online or locally) and maybe not finding what they want. Dealers have to go through a vetting process, too. I don't know what all that entails but I do know you can't just register on the site and start selling. Dealers have to maintain a certain volume of inventory, too, and 1stDibs' cut isn't exactly peanuts.

And one other thing---just because something is listed for $2,000 doesn't mean that's what it will sell for. Many times dealers will accept lower offers.

I used to get annoyed at them but once I understood what they're about I got over that---it's actually a pretty great resource when researching mystery pieces or figuring out what original upholstery, webbing, weaving, etc. should look like. They have the best photos and often there are shots of small but very significant details that just aren't visible in most other photos online.

- 02 Sep 2015

Alternatively, you could say that it is cheaper for an interior designer to go to 1stdibs than the other option.

The other option would be for the interior designer to spend untold weeks and months and years driving around the countryside, like your average picker, looking for exactly the right Hans Wegner for Andreas Tuck desk, in teak, not oak nor oak and teak, and with two drop leaves, and in restorable condition. And so on for every piece.

That would make the budget ballon like you can't imagine.

- 02 Sep 2015

The other thing to keep in mind is that 1stdibs tends to have things in really excellent condition. Not always, but having walked around a few shops that list on 1stdibs, I'd say the condition is much better than you'd find in the average antique/resale shop, let alone find in the average antique mall/flea market/yard sale.

- 04 Sep 2015

There is also overhead operating costs. It is not cheap for a 1stdibs shop to rent in a prime location like Melrose Avenue in Los Angeles and other high end locations where people with deep pockets shop. People with means just have to have what they want because they can, a high price tag is not an issue.

True, 1stdibs dealers sell some of the best stuff with the best provenance but their bread and butter inventory also comes from where most design enthusiast on a budget shop, at the bottom of the pool. In my early days of collecting (1990's) I practically have to chain myself to a piece I want to purchase, dealers are fierce and cut throat when it comes to the acquiring their inventory. I witnessed a dealer took a large 1930's pressed steel streamlined toy car from a child's arms who was left unattended for a second by a parent shopping in a thrift store.

I sold some items that I found in a thrift store to a 1stdibs dealer for $500 so I could buy a replacement water heater for my house. The same item is now in a 1stdibs dealer in San Francisco with an asking price of $5,000.

- 09 Sep 2015

from spanky's comment: "...1stDibs' cut isn't exactly peanuts.

And one other thing---just because something is listed for $2,000 doesn't mean that's what it will sell for. Many times dealers will accept lower offers."

This has been my experience too. Which makes me wonder how 1st Dibs' "cut" works? It can't work like eBay or an auction house where the fee is a percentage of the selling price because 1st Dibs doesn't seem to require exclusivity. A dealer's items will be listed on 1st Dibs, the dealer's own website and in the showroom. I can't imagine many transactions actually occur via the 1st Dibs website. So does 1st Dibs just charge a flat fee per item, or maybe a flat fee per dealer?

- 10 Sep 2015

Hi,

I was writing about 1stdibs in a older post:

---

This discussion is very interesting. The way 1stdibs (I should say there listed dealers) can take such a huge over price is sometimes absurd. Take a Hans J. Wegner chair for instance. On 1stdibs.com it cost $3,200 whereas Barnebys has a low estimation of $200 on the same chair.

Links to both sites:
https://www.1stdibs.com/furniture/seating/armchairs/hans-j-wegner-chair-... (1stdibs)
https://www.barnebys.com/auctions/lot/268084295/armlehnstuhl/ (Barnebys)

I searched for other objects on Barnebys and 1stdibs and found similar results.

My question now. Who buys from 1stdibs? Is it merely rich people who doesn't have time and energy to scan the market? Or could it be 1stdibs strong trademark that enables them to take such a high price?

---

I believe that you guys have answered my question! When it comes to 1stdibs business model it is quite astonishing. 1stdibs’ GMV in 2014 was $1.1 billion, a 20% increase over the previous year, and online sales increased 108% year-on-year. There are over two million visitors per month and 1.2 million site registrant. (Source: Hiscox Online Art Trade Report 2015).

- 10 Sep 2015

mullacc

- 09 Sep 2015

from spanky's comment: "...1stDibs' cut isn't exactly peanuts.

And one other thing---just because something is listed for $2,000 doesn't mean that's what it will sell for. Many times dealers will accept lower offers."

This has been my experience too. Which makes me wonder how 1st Dibs' "cut" works? It can't work like eBay or an auction house where the fee is a percentage of the selling price because 1st Dibs doesn't seem to require exclusivity. A dealer's items will be listed on 1st Dibs, the dealer's own website and in the showroom. I can't imagine many transactions actually occur via the 1st Dibs website. So does 1st Dibs just charge a flat fee per item, or maybe a flat fee per dealer?

I have a good friend of mine that sells on 1st Dibs. He has a shop in midtown were I live and rarely opens it up to the public because most of the items he has the average shopper couldn't afford at his escalated prices. My friend told me that he pays 1st Dibs $1400 a month plus a small percentage of the final sales price. The last time I was in his shop (3 months ago) he had just sold a Edward Wormley for Dunbar round coffee table to someone in New York for $8000. Good for my friend but to be honest...... That Dunbar table wasn't worth $8 grand.......

Peruche

- 10 Sep 2015

Peruche: in all seriousness, and postulating that I know very little about Dunbar, based on what criteria would you say the table is not worth $8000? The fundamental defining principle of worth in the marketplace is what someone will pay, and someone just did.

- 11 Sep 2015

" On 1stdibs.com it cost $3,200 whereas Barnebys has a low estimation of $200 on the same chair."

There is a big difference here that renders direct comparison useless. Dibs is a retail site. Barneby's is an auction site. Auction houses very often will give a low estimate on the value of a piece just to generate excitement. If something generally sells for around $2,000 and the auction house says they expect it to sell for $200-400, a lot of people will lock onto it thinking they're going to get it for way less than market value! Some people are likely to get very proprietary about it, thinking of it as theirs before the bidding even starts, and some may get carried away and bid higher than they intended---all of which is great for the auction house.

And the Dibs seller who has a $2000 item listed for $3200 may well end up getting $2000 net in the end. Or less.

- 02 Nov 2015

Hello

Thanks for having a level headed conversation about 1stdibs. I'm surprised more people don't understand the concept of retail vs. wholesale, and pricing being influenced by buying environment. The price of the exact same thing in a suburban antique store in Kansas, that does not ship, is going to be very different than the price of something in New York City in a show room on a major street, that ships all over the world. Pricing is also an art, not a science.

1stdibs is indeed geared towards interior designers and the very wealthy. I know several 1stdibs dealers, and I have heard that things often go for less than the list price (I have heard 20%) but that still makes the price higher than the fair market price. As far as auctions, they are mostly wholesale, with things sometimes going for retail or even more than a thing is worth if two people in the room really want it or get carried away. Also, there is a new trend in the better auction houses of charging a performance premium. An item is listed at less than it is worth, and if it does better, the consigner is charged a percentage of the "performance" over the high estimate.

- 11 Mar 2016

Any 1stDibs dealers on here? I'm interested and just wondering what sort of fees they charge. I have heard different figures in terms of their subscription fee to post things, but also wondering about their commission rate on sold items? And do they photograph the items for you?
I have submitted an application to them, but they are very cagy about giving me this information before coming to meet me, which makes me think they are going to go in for the hard sell in person...I'd rather just have the facts up front and have time to think through how their fees would fit into my budget.

- 19 Mar 2016

I hope this is appropriate to report (if not, I'm sorry 1st dibs!) but we were invited to join them last year. If I recall it was going to cost us $500 per month and some setup fee (I seem to recall it being over $1k but I'm not sure.).. I don't believe there were fees beyond that. I suspect the monthly fee varies depending on the inventory size of the dealer. As we are quite small maybe that's why we were told $500 rather than the $1400 noted above. I really have no idea.

I do know that the dealers I've talked to who sell there said they will often accept 50% of the asking price.

Like others, I value them as a research resource, although I will say I've seen many incorrect attributions over the years, so I take everything with a grain of salt.

The frustrating thing for me is when I'm speaking with people about selling their pieces, or estates, etc, and they look at 1st dibs and think they can ask those sorts of prices from me!

- 15 May 2016

I used to work for a 1st Dibs dealer and did the online postings for his store. Here is what I can tell you .

1. 1stdibs dealers set their own prices and own all the inventory. There is no 1st Dibs warehouse. Some dealers prices are outrageous and some are in the expected market range. Dealers with highly coveted pieces that are priced well tend to sell out quickly, so often when you look up items on 1stdibs, the dealers with available inventory tend to be at the higher end of the pricing range for the item/niche you are researching.

2. Based on the high end pricing I've seen from dealers, I believe many 1stdibs dealers price their pieces at double or more than what their bottom line price is. Rarely do dealers get full asking price. Unfortunately, many customers who want dealers to buy their pieces take the 1st dibs pricing at face value. We regularly received offers for 1stdibs pieces at 30-50% of asking price.

3. The overwhelming majority of 1st dibs buyers (through year end 2015) were design professionals who expect, and get, trade or net pricing when buying from dealers for their clients. That discount is typically at least 20-30% off the published prices. Dealers know this and price accordingly.

4. 1st dibs makes their money in a number of different ways. There are what is called 1st Dibs Direct purchases, essentially a Buy IT Now kind of feature, where 1st Dibs takes a 10% commission AND arranges the shipping on which they have negotiated a hefty discount AND help themselves to a nice override on that shipping charge as well. These commissions are IN ADDITION to the $550 monthly base fee + $15 per item initial list fee + $2 per month per item maintenance fee. So if your 1st Dibs store has an inventory of 500 pieces and you list 20 new pieces this month, your base fees for that month, not including any commission from Direct Orders, are $550 subscription fee, $1000 inventory maintenance fees, $300 new listings fees. There are a myriad of other extra fees as well, late fees if your listings aren't uploaded in time, $25 per item to be included in the new item postings, etc etc. plus there is very expensive advertising. So, with no set up fees or commissions, your 500 item inventory + 20 new listings costs $1850 per month on 1stdibs.

5. My dealer friend also tells me that the latest 1stdibs updates have infuriated many dealers. Like eBay, 1stdibs has now inserted themselves between the dealer and customer in all forms of communication. The online contact / email is blind to both sides. Dealers and customers are not permitted to provide their direct email, phone, or web contact info and if they do type it in, it is redacted just like an FBI file. The only phone numbers provided for customers to reach dealers are 1st Dibs relay lines and THEY ARE RECORDED and MONITORED by 1stdibs. Very creepy Big Brother stuff going on and they seem to have forgotten that they have NO ANTIQUE INVENTORY. If a customer is savvy enough to find a dealer's contact info independent of 1stdibs and ends up making a purchase, 1stdibs expects their commission too. Dealers hate the new set up and everyone is hoping that one or more of the 1st dibs competitors gets some serious traction so they can abandon the creepy Big Brother restrictions at 1stdibs.

6. 1st dibs also puts a tremendous amount of pressure on its dealers to accept returns and refunds for ridiculous, scammy transactions. We were strong armed into accepting a very pricey return 7 months after the purchase because the customer decided she didn't like how the 300 year old hand carved features weren't perfectly symmetrical.

So, yes 1stdibs is a valuable marketing channel but it is by far the most expensive and it is the individual dealers who come up with outrageous pricing and misappropriated attributions.

Hopefully, some of the 1stdibs competitors will grow big enough to offer customers and dealers more choices, but for now, they have the market share and are seriously exploiting that advantage.

- 01 Jun 2016

I've done work for a high end antique shop in the US.

1stdibs is quite expensive for most dealers.

• $750 - $1,000 per month subscription.
• 10% commission on all sales.
• $2 - $20 per listing.

It's a necessary marketing expense as high end dealers have very low visibility outside of local markets.

1stDibs spends more than any competitor on advertising (fashion dealers benefit the most however). They also spend an incredible amount subsidizing shipping cost for customers. LA-NYC white glove delivery of a fragile credenza will likely cost about +$1,500 - 1stdibs offers a flat rate of $350.

Pricing is set by antique dealers & designed by the trade.

In a sense, designers & firms can be described as a dealer's sales force. Their 'commission' is the difference between the dealers trade & list price. It averages about 20% but varies. I'd definitely consider trade pricing fair from most antique dealers.

However, cash flow is king. Most small dealers will give trade if you ask them directly.

- 15 Jun 2016

I didn't see it mentioned earlier in this thread, so I figured I'd drop this link here:

http://fortune.com/2015/09/09/1stdibs-funding/

Right about the time this thread was originally active, 1stdibs raised another round of equity, which effectively bought out the founder. There were already some a-list VC firms invested, along with Alibaba, but now the VCs and their CEO are running the show completely.

Their CEO, by the way, is David Rosenblatt, whose background is online advertising. He ran DoubleClick and sold it to Google. He was brought in Benchmark, one of the early VC investors, in 2011.

- 29 Jul 2016

The original incarnation of 1stdibs created by Michael Bruno was to connect the world's finest antique dealers with designers and collectors. He succeeded! He was very selective about the dealers who were invited to participate, their years in business, reputation in the industry and there was a "cap" on dealers let in by region. Items were presented in their best possible incarnation - most mid century pieces either in mint condition or refurbished to be high end client ready and of course, priced accordingly. Looking at the new items offered was an absolute treat! I literally have a binder of items that I would print out not only for attribution purchases, but to keep track of the items being sold and at what price (though you never really know what the end price was for sure).

Once the investment company and new CEO came into the picture, the direction moved from being a site dedicated to being a shopping resource to connect dealers with clients to being a sales driven platform focused on capturing every possible sale. On one hand, the infusion of money allowed the site to penetrate the online marketplace at a much higher level and increase the overall presence of the site, brand recognition and increased sales for the dealers and the site. The flip side of that is that the cost of being a 1stdibs dealer dramatically increase as many fees doubled and the peer to peer connection or dealers to end clients has been removed as well as any chance of salesmanship skills of those dealers.

As more and more dealers across the world, both high and low end have been brought in, you can definitely see that the same high standards for dealers and pieces has not been maintained. Less and less items are being offered in "client ready"condition. For some, that may be good as they may want to have purchases refurbished to their own specifications by their own restoration specialists - certainly a beautiful lacquered finish can be damaged in transit, but for others, to buy pieces in original condition is a deterrent as buying a project for a designer can certainly cost a designer more money and certainly time than originally anticipated.

Many of the new dealers are vendors who have been selling on Ebay (you can even find the same items with the same pictures on both sites) or the "pickers" for some of the original higher end 1stdibs dealers with storefronts. Once the pickers are pulled out of the food chain, it makes it harder & more expensive for the high end dealers to purchase quality merchandise. Think of the cost for a Manhattan antique dealer to buy a piece from a picker in Colorado, ship it to NY to their refinisher and/ or reupholster then have it brought into their showroom to offer for sale at their showroom or on 1stdibs (not to mention the high cost of rent in the city) all in the hopes that a designer will come in and select it for a client. Compare that to going online and finding the same or similar piece on 1stdibs in original condition and buying it from a picker with subsidized shipping from the site - in a lot of ways 1stdibs is competing with the dealers on whom the business was originally built.

As 1stdibs attempts to capture every sale possible, they are inadvertently lowered the overall quality and rarity of the products on which the site's reputation was originally established. The increase in competition will most likely force a period of low sales for high end dealers that will force them to lower their prices while their overhead continues going up - that's the simple economics of supply and demand. Antiques and vintage pieces are finite quantity and the competition to get those pieces will continue to increase.

The 1stdibs commission structure on sales isn't capped at 10% - remember that the investment company has spent millions to create a sales driven platform and hired a CEO with an amazing resume who could have gone to work pretty much anywhere - again, not for the love of antiques, but to make money. The most logical goal for the investors and CEO is to build the organization to go public for a big payout. The biggest question remains to be seen - how much will 1stdibs increase fees and commissions for dealers until they decide to migrate to another site or just give up all together. Taking the monthly 1stdibs site costs mentioned in another post at $1,800 a month, dealers have $21,600 in site fees before any other overhead. If the yearly sales of an antiques dealer are $500,000, at a 10% commission and 3% credit card processing fee, that's an additional $51,500, so $73,100 a year, 15% of gross revenue - which puts a big dent in a dealer's ability to not only pay for overhead, but to acquire new and ever increasing in cost inventory. The rest remains to be seen...

- 13 Jul 2017

1stDibs is the worst and my transaction with 1stdibs as a buyer was a horrific consumer nightmare. We were told by their customer service over the phone that our purchase was protected through their secure checkout. We found out later after our item collapsed in transit, nowhere near our home (not even in the same country), that if we suggest a transporter to the dealer, 1stdibs will not be accountable for the transaction. After looking at the photo of our item sitting broken, it looked like the dealer we purchased from through 1stDibs actually poorly packed the glass table in a pitiable layer of bubble wrap. 1stDibs, however, has held us accountable and apparently does not hold their dealers accountable for suitable packing. This, was our horrifying experience buying through 1stDibs.

So going back to what one user said about 1stDibs strong arming dealers, my experience with the company was quite the opposite. The dealers can continue to profit the company, but buyers like myself whose purchases are relatively small are neglected when something goes wrong.

- 20 Jul 2017

It seems that your beef is with the shipper not the 1st Dibs dealer. It sounds like the piece was in tact when it left the dealer, however subsequently broke in transit. The shipper has a responsibility to ensure items are packed properly before they attempt to transport them. It also sounds like you recommended this shipper to the dealer, bypassing the 1st Dibs shipping and choosing a (more than likely) faster or cheaper method. This entire process explodes in you hands and you blame the 1st Dibs dealer.

- 20 Jul 2017

secrettruth is correct.

"We were told by their customer service over the phone that our purchase was protected through their secure checkout."

This simply means that First Dibs will responsibly handle the financial aspect of the transaction, eliminating the need to release credit card or wire transfer information on to the dealer. This secure checkout then will deduct necessary fee's, etc. (approx 13%?), and forward the balance to the dealer. When a shipper picks up an item from a dealer, the shipper will carefully inspect the item (with the dealer), and signatures will be exchanged. A responsible dealer will take several photographs of the packing, etc. First Dibs encourages this secure checkout, as it is too easy for the consumer to bypass First Dibs checkout, and pay the dealer directly (no commission would then be paid to First Dibs).

It would seem that your damage issues are with the shipping company, not First Dibs. Did you pay the freight bill separately, or through First Dibs?

Best,

Aunt Mark

- 27 Jul 2017

1st Dibs has increased its fees by 50% since I posted last year. The standard monthly subscription rate is now $750 per month. Commissions have been raised from 10% to 15% plus they charge a standard 3% processing fee. So, for a dealer, the net proceeds of a 1st Dibs sale are charged a flat 18% PLUS the monthly subscription rate, plus there is a $20 per item charge to have listings featured in the weekly New Additions section. It's expensive. And their dealer service SUCKS. And they demand 30 day exclusivity for listings and parity pricing. So a dealer who lists an item on 1st Dibs cannot list it anywhere else online besides their own personal website for 30 days and if they do list it on other sales channels after 30 days, the price has to be the same as it is on 1st Dibs.

Dealers have a love/hate relationship with 1st Dibs. They love the visibility, hate the interference. 1st Dibs forbids any direct dealer contact with customers; email and website addresses in the 1st Dibs message system are redacted and the dealer phone numbers published on the 1st Dibs site are 1st Dibs relay phone lines that are recorded and monitored by 1st Dibs. If a customer sees a dealer's item on 1st Dibs and independently, of their own accord, searches out that dealer's website/store/direct phone line, 1st Dibs contract requires dealers to pay a commission to 1st Dibs for ANY and ALL current and future sales with that customer, regardless of whether the items the buyer purchases were / are listed on 1st Dibs.

Most buyers do expect items listed on 1st Dibs to be "client ready" and those clients tend to be upscale. So, here's how the costs break down using a pair of Milo Baughman chairs currently listed on 1st Dibs for $3900. They are chrome frame armchairs with newly upholstered seats and biscuit tufted backs. A designer will probably purchase them for his/her client, so automatically, that $3900 is marked down by 20% for trade discount (it can vary, but 20% is standard). So the gross sale is $3120. Now subtract the 1st Dibs commission and processing fee of 18% = $2558. Now, do you think the dealer bought those chairs in newly upholstered condition? Probably not. So, what is the cost of fabric and upholstery? It can vary quite a bit depending on if the structural elements of the chair also need to be rebuilt. Fabric required for each chair is approx 4 yards. Cost of fabric can vary dramatically and depends on how well you shop, but can range from $20-80 per yard. At $20, cost for fabric is $80 per chair or $160. Tufting adds significant labor cost to upholstery. I'm in the Midwest and have very good, inexpensive upholsterer who would charge about $400 per chair or $800. So, for sake of argument, lets say labor and fabric to reupholster chairs is $1000. Subtract that from 1st Dibs net sale proceeds of $2558 for $1558. How much do you think it cost that dealer to find a pair of Baughman chrome frame arm chairs (with chrome in good condition - re-chroming is exorbitantly expensive) and have them shipped/delivered to shop/upholsterer, photographed, listed and stored until sold? Could I find them for $500? That would be a great price for a pair of Baughman armchairs with good chrome. If I didn't find them locally, they have to be shipped to me. At least $200-300. So now the base cost is $700-800. So how much did the dealer really make?

$500 - wholesale/picker price dealer pays to buy inventory
200-300 - shipping/delivery costs to dealer
1000 - supplies and labor costs to reupholster

= $1800-1900 total acquisition/labor costs

$2558 - net sale proceeds from 1st Dibs = $758/858 margin

And keep in mind, that $758-858 margin DOES NOT INCLUDE: 1st Dibs monthly subscription cost, Featured New Item listing cost, overhead, photography, storage or retail space, staff to create listings etc, any other negotiated discounts by buyer. And it could easily take a dealer 6-18 months to sell those chairs.

Hope this helps explain dealer pricing/margins.

- 27 Jul 2017

You forgot to include the costs associated with verifying that a listing is attributed correctly for designer and manufacturer: $0 (which converts to £0 and €0 if those 1stDibs dealers are in Europe).

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