Buyer’s Premiums

Buyer’s Premiums costs have been skyrocketing, Many auction houses are getting 25% from the buyer PLUS another large percentage from the seller. Is this too much to pay? What do you think?
Any suggestions?

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4 Comments

  1. Jim B.

    Yes, I agree, a 25% buyer’s premium is way, way too much to expect a winning bidder to pay. I always make it my practice to subtract the “buyer’s premium” from my bid price no matter what the percentage is. What right do the auction houses think they have to charge 20 – 25% more for an item than the final price calls for? Would you buy a car from a dealer who charges 25% more than the sticker price? Let’s not forget about another auction house price manipulation trick and that is by requiring an overinflated starting bid price. From the auction catalogs I get, that’s almost the kiss of death for an item to be sold or even to draw bids. They claim that they know what the “going price” is for an average Civil War item. However, that’s a myth they like to justify to the seller the fees they charge for the posting. If you want an auction item to move, if you want the seller to be satisfied, and if you want to encourage bidding, you start the bidding low enough to generate interestand let the bidding dictate what the final price will be.

    Reply
    1. mark robbins

      I agree with Jim B completely although I do understand the need on the part of the seller to sometimes set a reserve. We have all seen items occasionally go for much less than they should be worth for a variety of reasons including poor auction turnout secondary to weather etc. However, I agree that buyers premiums are exorbitant. Many times these fees are used to offset rent or mortgage for office space, catalog production costs, etc. However, this should not be predominantly the buyer’s responsibility to pay—-it is, in part the cost of doing business. I’m not saying that an auction company is not entitled to get a cut; after all, without that wwhy would they otherwise be in business. But as in real estate, the item basically sells itself. The other issue I have noted in auction companies is often an exorbitant shipping cost that is many times way beyond what the item would cost to ship insured with either UPS, FedEx or USPS. There is now one or two auction companies out there who, in addition to charging 25% buyers premium, also put the onus of arranging shipping on the buyer.

      Reply
      1. Jim B

        Yes, the shipping price of items won at some auction houses is way over the top. Just because I may have won an item doesn’t mean that I will stand by and be “gouged” to have it shipped to me. A well known auction house charges a minimum of $20 even if it’s just one sheet of paper. Granted they may include insurance, however, I’ve shipped letters to buyers via USPS Priority Mail with delivery confirmation for around $6. So why use UPS when the Post Office is cheaper and just as efficient?
        Also, it may came as a surprise to some collectors who may want to sell through an auction house, but some houses charge a “reading fee” if they’re sent a letter to be included in their next catalog. That’s right, they charge the seller for the time it takes to read the letter before they transcribe the important parts. On top of that, there’s the “insertion fee” which may cover the catalog description and/or photograph, then the auction house gets a cut of the final hammer price. Basically, if you’re a seller, approximately 1/3rd to 1/2 of the value of you item is going to the auction house in one form or another. They they get the “buyer’s premium” and the inflated shipping fee. Boy, what a racket!

        Reply
    2. blitzkonig@gmail.com

      Don’t forget inflated shipping and handling

      Reply

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