The Financial Times takes a close look at Christie’s business and discovers that a third of the firm’s profits come from “regional” sales of small items like silver, furniture and decorative items. That business is a boon to their main focus, strong relationships with estates. John Dizard explains:

The old Christie’s mythology of gentlemen pretending to be auctioneers is, really, the inverse of the truth: the firm has a more hard-scrabble business model than its competition. Christie’s chases two to two- and-a-half times as many items, or lots, to get gross revenues that are within a few percentage points of Sotheby’s. It lacks the integral secured lending business that is a key part of Sotheby’s. It is less generous with compensation than Sotheby’s, which can mean lost opportunities with the departure of key staff, and, also, a lower break-even at a given level of staffing.

Marc Porter, the president of Christie’s Americas, came up through the estates department. He says: “We have been getting the lion’s share of the estate business for close to a decade. We usually have over 55 per cent [of the estate business]. We think it is the most desirable business, is reasonably estimated, the works are fresh to the market, and the market knows they are for sale.” In other words, they will be priced to move, which means commissions are more certain.

Getting estate business means years of cultivating the trust and estate departments of the major law firms.

Small Lots Bring Big Rewards to Christie’s (Financial Times)