AH Blues

[Yoda]

Well, I managed to get through the avalanche of auctions over the last few months and am still nearly solvent. But I just don't under stand the allure of PWCC as a consignor. I initially thought they were primarily a dumping ground for lower condition graded cards, but some of the more recent stuff on Ebay was pretty impressive. Here is my query: Why would a consignor go to PWCC with, say, a PSA5 T206 Cobb Green and pay a scheduled fee when he/she could take it to a national AH and pay nothing?

[Scott L.]

Quicker $ maybe?

[mechanicalman]

If the same PSA 5 Cobb sells for $20k through PWCC and $20k through an auction house, the consignor will cash a check for north of $18k from PWCC and somewhere around $16.6k from the AH.

[x2drich2000]

This is a good question and the answer lies in the difference in the fees charged by PWCC and whatever the AH you choose. Taking a look at your example, a PSA 5 green Cobb is probably somewhere in the $15-20k range now (i could be off on that, but simplicity lets just use $15k for an example).

PWCC charges 8% commission for any card over $5k. So if the card sells for $15k, the seller will net $13,800 and PWCC gets $1200.

Most premier AH's charge around 20% buyers premiums (yes I know there are AH with lower BP and for a card of this price you could probably negotiate some percent of the buyers premium but just trying to keep it simple). In order for the consignor to net the same amount as he would with PWCC, the hammer price before the BP would need to be $13,800. Add the 20% buyers premium and the customer would have to pay $16,560. So that would mean the card would need to sell for $1500 more in the auction house for the consignor to net the same amount. As a consignor you need to ask yourself which is more likely to happen and make your choice which way to go from there.

[mantlefan]

If the same PSA 5 Cobb sells for $20k through PWCC and $20k through an auction house, the consignor will cash a check for north of $18k from PWCC and somewhere around $16.6k from the AH.



On a high dollar item, the consignment fee is ZERO for many, many AH's including the biggies. At most they will charge 5% on items under $1000.

Some AH's will even give you an extra few points back!! They need stuff to sell. A Green Cobbie will be a featured item and will draw more bidders who will find other stuff to bid on!

[Peter_Spaeth]

Well, I managed to get through the avalanche of auctions over the last few months and am still nearly solvent. But I just don't under stand the allure of PWCC as a consignor. I initially thought they were primarily a dumping ground for lower condition graded cards, but some of the more recent stuff on Ebay was pretty impressive. Here is my query: Why would a consignor go to PWCC with, say, a PSA5 T206 Cobb Green and pay a scheduled fee when he/she could take it to a national AH and pay nothing?

How do you figure they are paying nothing? Unless the AH is going to kick back some or all of the buyer's premium, they are of course paying via a reduced hammer price attributable to the BP.

[glchen]

On a high dollar item, the consignment fee is ZERO for many, many AH's including the biggies. At most they will charge 5% on items under $1000.

Some AH's will even give you an extra few points back!! They need stuff to sell. A Green Cobbie will be a featured item and will draw more bidders who will find other stuff to bid on!

There's no buyer's premium on ebay ....

Saying that, a consignor usually wants to find the auction house or consignment shop that they believe will give their items the most visibility, the right buyers, and the auction ending type they believe will bring the highest price for them. There are also other factors such as the service of the AH, the payout speed, and other perks such as cash advances, discounted grading, etc.

[Peter_Spaeth]

If the same PSA 5 Cobb sells for $20k through PWCC and $20k through an auction house, the consignor will cash a check for north of $18k from PWCC and somewhere around $16.6k from the AH.

Apparently what you call it matters more to people than the math, Sam. So in your example the AH consignor isn't paying anything he's just taking in less money. :eek:

[Leon]

Apparently what you call it matters more to people than the math, Sam. So in your example the AH consignor isn't paying anything he's just taking in less money. :eek:

From now on I am mandating that I pay a 20% Sellers premium on my consignments and there will be NO buyers premium. Isn't that better now, Peter? The buyers won't be paying any fee now.

[Peter_Spaeth]

From now on I am mandating that I pay a 20% Sellers premium on my consignments and there will be NO buyers premium. Isn't that better now, Peter? The buyers won't be paying any fee now.

Rob will be thrilled that he won't have to pay a premium.

[mechanicalman]

Apparently what you call it matters more to people than the math, Sam. So in your example the AH consignor isn't paying anything he's just taking in less money. :eek:

Very true, Peter. I also didn't take into account the many folks who want to spend $20K on a PSA 5 Cobb and bid that amount in an auction, only to receive a surprising bill for $24K.

[Peter_Spaeth]

Very true, Peter. I also didn't take into account the many folks who want to spend $20K on a PSA 5 Cobb and bid that amount in an auction, only to receive a surprising bill for $24K.

When that happens to me I get really pissed.

[Fballguy]

From now on I am mandating that I pay a 20% Sellers premium on my consignments and there will be NO buyers premium. Isn't that better now, Peter? The buyers won't be paying any fee now.

This is a great idea. If it's all going to work out the same in the end, why don't they do it.

There's that question again that nobody wants to answer.

[Fballguy]

Rob will be thrilled that he won't have to pay a premium.

Still waiting to hear your answer Peter.

If it's all the same money...Why do we need a buyer's premium at all?

[Peter_Spaeth]

Still waiting to hear your answer Peter.

If it's all the same money...Why do we need a buyer's premium at all?

Maybe from an accounting perspective it makes it simpler to keep track of what you pay the consignor and what you keep, than having to calculate percentages of the hammer price in a seller's fee world, but I really don't know or care. You have to do it one way or the other and it comes out to the same thing. Unless of course you think AHs should not take in any money.

Why don't you explain to us why you, knowing a premium is going to be added to your bid and presumably taking that into account like the overwhelming majority of people, care what convention is used for the AH's cut?

[TanksAndSpartans]

Some auction houses now show the BP right in the dropdown when you make the bid which I think is a nice feature.

For the question of why to go with an eBay consigner, I don't think there is any question that it's because you get to keep more of the total amount the buyer pays. For a graded card from a popular set, the eBay route makes a lot of sense to me. For an item that's more of a niche collectable, I think it makes sense to go with the AH, with the hope they will be able to get the right eyeballs on it. Thinking of myself, I don't even bother to keep eBay searches on programs etc. stuff that I know rarely gets auctioned off on eBay - my graded card searches on the other hand turn up hits almost every day.

[RedsFan1941]

if i am correctly following the logic of at least one person, he would rather buy a card on the BST or eBay for $1,000 -- with no evil buyer's premium to deal with -- than get the same card for an $800 bid from an auction house, because it means the total price actually would be $960 with the BP?

[Fballguy]

Maybe from an accounting perspective it makes it simpler to keep track of what you pay the consignor and what you keep, than having to calculate percentages of the hammer price in a seller's fee world, but I really don't know or care. You have to do it one way or the other and it comes out to the same thing. Unless of course you think AHs should not take in any money.

Why don't you explain to us why you, knowing a premium is going to be added to your bid and presumably taking that into account like the overwhelming majority of people, care what convention is used for the AH's cut?

You're making a bold assumption that every winning bid is suppressed by the exact amount of the buyer's premium in every instance. Dollar for dollar. Percentage point for percentage point. BP equals 20%...High bid is suppressed 20%. BP 10%...High bid supressed 10%.

While the BP does suppress bidding. I don't think it's close to a dollar for dollar match....and the discrepancy there is borne by the buyer...not the seller.

And therefore it's not the same. It's additional.

Except for you and a few of your cronies. Who abide by the 20% off rule when determining your high bid...every time...without fail.

[Orioles1954]

Except for you and a few of your cronies. Who abide by the 20% off rule when determining your high bid...every time...without fail.

Comic gold!!!

[ejharrington]

I have a question I have been meaning to ask on this board and relates to the topic of this conversation. If I wanted to consign a high-priced item(s) with one of the big auction houses such as REA, Heritage, etc., do I:

a) pay a consignment fee PLUS the buyer's premium of, say, 20%,
b) a consignment fee ONLY,
c) ONLY the buyer's premium of, say, 20%.

Also, I have seen references to the big auction houses waiving or reducing fees for larger priced items. Are they waiving or reducing the consignment fee, the buyer's premium, and/or both? Also, is there an approximate dollar threshold that the AH's consider when determining whether to waive or reduce the fees?

I would appreciate any feedback that people could provide.

[rats60]

You're making a bold assumption that every winning bid is suppressed by the exact amount of the buyer's premium in every instance. Dollar for dollar. Percentage point for percentage point. BP equals 20%...High bid is suppressed 20%. BP 10%...High bid supressed 10%.

While the BP does suppress bidding. I don't think it's close to a dollar for dollar match....and the discrepancy there is borne by the buyer...not the seller.

And therefore it's not the same. It's additional.

Except for you and a few of your cronies. Who abide by the 20% off rule when determining your high bid...every time...without fail.

It is never additional in my case. If I am willing to pay 1000 for a card, I will snipe at 1000 (including shipping) on Ebay. If I get the card fine, if not fine. With an AH, I see where the next position is. If it is under 1000(with BP and estimated shipping), I will place the bid. If it is more than 1000, I am done. It is really not that hard. I am not bidding 1000 and then being surprised that I have to pay 1200 plus shipping. It may not work out dollar for dollar, but it is pretty close.

[sb1]

While I can't answer for the "big auction houses", I can tell you that when anyone consigns with my auction (Brockelman Auctions), they pay no consignment fees of any kind, the buyers pay a low 12 1/2% premium.

Scott

[Orioles1954]

I have a question I have been meaning to ask on this board and relates to the topic of this conversation. If I wanted to consign a high-priced item(s) with one of the big auction houses such as REA, Heritage, etc., do I:

a) pay a consignment fee PLUS the buyer's premium of, say, 20%,
b) a consignment fee ONLY,
c) ONLY the buyer's premium of, say, 20%.

Also, I have seen references to the big auction houses waiving or reducing fees for larger priced items. Are they waiving or reducing the consignment fee, the buyer's premium, and/or both? Also, is there an approximate dollar threshold that the AH's consider when determining whether to waive or reduce the fees?

I would appreciate any feedback that people could provide.

B.) and they're paying the consignment fee only

[Leon]

Comic gold!!!

You can't make this stuff up. No one would believe you. LOL

[x2drich2000]

I have a question I have been meaning to ask on this board and relates to the topic of this conversation. If I wanted to consign a high-priced item(s) with one of the big auction houses such as REA, Heritage, etc., do I:

a) pay a consignment fee PLUS the buyer's premium of, say, 20%,
b) a consignment fee ONLY,
c) ONLY the buyer's premium of, say, 20%.

Also, I have seen references to the big auction houses waiving or reducing fees for larger priced items. Are they waiving or reducing the consignment fee, the buyer's premium, and/or both? Also, is there an approximate dollar threshold that the AH's consider when determining whether to waive or reduce the fees?

I would appreciate any feedback that people could provide.

In my opinion an auction house should never adjust the buyers premium in order to get a consignment. If they did adjust the buyer's premium for you, you would have an unfair advantage over other bidders in the auction. Not sure of the legality of it, but seems like creating an unfair bidding platform would at least be unethical.

Auction houses can always adjust your sellers fee for a specific item or consignor. This doesn't create an unfair bidding platform as it shouldn't give you an advantage in bidding on items. It would only put more money in your pocket for the items you consigned. This is one way they can entice a consignor. Most AH's today start with a 0% sellers fee. I know I would have to have a really good reason to consign something with a seller's premium. For high demand, high value items, you can negotiate that fee/item placement/etc and even sometime get a negative sellers fee (a portion of the buyer's premium). As far as when they will waive it or reduce it, that's all up to the individual AH. Some advertise discounts for certain items, some keep it more private. Best bet is to call the AH that you're interested in and see what they will do.

DJ

[Leon]

Looney logic if I have ever heard it.

When was the last time a fee was "surprised on you" mid auction? Otherwise, unless you can't read the rules, there are no surprises. Most collectors figure out how to add the 20% to their bid BEFORE the AH does it for them once the lot is closed to bids. Adding 20% (or whatever the BP is) is not that easy I guess....for some. I have bid in hundreds if not thousands of AH auctions and haven't been surprised by the BP yet.

It is never additional in my case. If I am willing to pay 1000 for a card, I will snipe at 1000 (including shipping) on Ebay. If I get the card fine, if not fine. With an AH, I see where the next position is. If it is under 1000(with BP and estimated shipping), I will place the bid. If it is more than 1000, I am done. It is really not that hard. I am not bidding 1000 and then being surprised that I have to pay 1200 plus shipping. It may not work out dollar for dollar, but it is pretty close.

[Orioles1954]

Looney logic if I have ever heard it.

When was the last time a fee was "surprised on you" mid auction? Otherwise, unless you can't read the rules, there are no surprises. Most collectors figure out how to add the 20% to their bid BEFORE the AH does it for them once the lot is closed to bids. Adding 20% (or whatever the BP is) is not that easy I guess....for some. I have bid in hundreds if not thousands of AH auctions and haven't been surprised by the BP yet.

The only time I've ever been surprised in my bidding history is with shipping a time or two.

[rats60]

Looney logic if I have ever heard it.

When was the last time a fee was "surprised on you" mid auction? Otherwise, unless you can't read the rules, there are no surprises. Most collectors figure out how to add the 20% to their bid BEFORE the AH does it for them once the lot is closed to bids. Adding 20% (or whatever the BP is) is not that easy I guess....for some. I have bid in hundreds if not thousands of AH auctions and haven't been surprised by the BP yet.

How is it Looney logic? If I want to pay 1000, I am not paying more no matter the platform or format.

[Peter_Spaeth]

You're making a bold assumption that every winning bid is suppressed by the exact amount of the buyer's premium in every instance. Dollar for dollar. Percentage point for percentage point. BP equals 20%...High bid is suppressed 20%. BP 10%...High bid supressed 10%.

While the BP does suppress bidding. I don't think it's close to a dollar for dollar match....and the discrepancy there is borne by the buyer...not the seller.

And therefore it's not the same. It's additional.

Except for you and a few of your cronies. Who abide by the 20% off rule when determining your high bid...every time...without fail.

You raise up your head and you ask, "Is this where it is?"
And somebody points to you and says, "It's his"
And you say, "What's mine?" and somebody else says, "Well, what is?"
And you say, "Oh my God, am I here all alone?"
But something is happening and you don't know what it is
Do you, Mr. Jones?

[Leon]

How is it Looney logic? If I want to pay 1000, I am not paying more no matter the platform or format.

Perfect. Then you bid up to the amount where you will spend $1000 with whatever fee(s) included. Problem solved. I think you are making it more difficult than it needs to be. A lot of us say to ourselves "I am not going over xx amount" then we deduct the fee pecentage and that is what we bid (assuming we are also understanding there are usually shipping charges to be thrown in too). If you can spend a $1000 then just bid up to $800......then add the Buyers Premium, which is usually 20% to your $800 bid, and that is $960, which leaves $40 for shipping.

[Peter_Spaeth]

Perfect. Then you bid up to the amount where you will $1000 with whatever fee(s) included. Problem solved. I think you are making it more difficult than it needs to be. A lot of us say to ourselves "I am not going over xx amount" then we deduct the fee pecentage and that, and that is what we bid (assuming we are also understanding there are usually shipping charges to be thrown in too). If you can spend a $1000 then just bid up to $800......add the Buyers Premium, which is usually 20% to your $800 bid, and that is $960, which leaves $40 for shipping.

I think you guys are in agreement, not disagreement?

[Leon]

I think you guys are in agreement, not disagreement?

Yeah, I think I am arguing with myself. Back to doing some chores :)....

[Fballguy]

if i am correctly following the logic of at least one person, he would rather buy a card on the BST or eBay for $1,000 -- with no evil buyer's premium to deal with -- than get the same card for an $800 bid from an auction house, because it means the total price actually would be $960 with the BP?

How do you even make such a connection? Who am I dealing with here? Forrest Gump?

[Fballguy]

You raise up your head and you ask, "Is this where it is?"
And somebody points to you and says, "It's his"
And you say, "What's mine?" and somebody else says, "Well, what is?"
And you say, "Oh my God, am I here all alone?"
But something is happening and you don't know what it is
Do you, Mr. Jones?

If the value of your humor had a 20% BP, I'd have nothing to complain about.

[Peter_Spaeth]

If the value of your humor had a 20% BP, I'd have nothing to complain about.

Imagine the obvious response -- change humor to -----.

[RedsFan1941]

How do you even make such a connection? Who am I dealing with here? Forrest Gump?

apparently. after CMIZ5290, you’re the smartest guy in the room.

[Fballguy]

And there it is. "A lot" Not all...as some assume. At least Leon is being realistic.

A lot probably do...especially those on this forum. And just as true...a lot probably don't. They bid to win and then endure the BP afterwards.

I think some of you have conformed your logic to fit in with the old school auction rules. "This is the way it is, so how can I rationalize it in a way that makes it more palatable?".

Funny...I looked up the definition of bid. It's the offer of a certain price for something. Didn't see anything in there about multiplying by 1.2 to get to that price.

Perfect. Then you bid up to the amount where you will spend $1000 with whatever fee(s) included. Problem solved. I think you are making it more difficult than it needs to be. A lot of us say to ourselves "I am not going over xx amount" then we deduct the fee pecentage and that is what we bid (assuming we are also understanding there are usually shipping charges to be thrown in too). If you can spend a $1000 then just bid up to $800......then add the Buyers Premium, which is usually 20% to your $800 bid, and that is $960, which leaves $40 for shipping.

[TanksAndSpartans]

This is actually an interesting academic question. Economics 101 would certainly tell you its completely irrational to behave differently because in one case the amount you pay is what you bid (plus shipping) and in the other case the amount you pay is what you bid + 20% + shipping. The rational thing to do is make the calculation of adding the BP and behave (bid) the same way in both cases (i.e. reduce your bid because you know you will be hit with a BP at checkout). Someone would need to do a study to see if people actually behave according to the theory or whether the fact that that 20% in not included in their bid induces them to pay more as if they are willing to momentarily forget they will be charged the 20% later. It's entirely possible, and also the reason I believe some auction houses want you to have to do the math in your head (or not do it), rather than show you the BP when you place your bid. I think its something called the framing effect where people view options that are really the same as different depending on how they are stated.

One minor point is because the bid increments are wider for AHs than eBay, sometimes I have to make a decision whether I want to go under or over my target - something I never really have to do on eBay where the bid increments are very narrow.

[frankbmd]

Let’s say you have a new home with a smallish garage and a full size car.
You are bidding to park the car in the garage. You estimate where the center of the garage is on the back wall of the garage. You aim correctly and end up scratching the right side of the vehicle, which then must be repaired. You are surprised at the cost of placing your bid to park the car and incurring the parker’s Premium.

When completed, you pick up the car and bring it home. It needs to be parked in the garage. Do you follow the exact same process to park the car and repeat getting the same result necessitating another visit to the body shop or do you make an adjustment to your aiming point and move it the required distance to the left, which results in the car not being scratched on the right side.

On the third day do you repeat the unsuccessful process of the first day or the successful process of the second day? If you answer the former, I cannot help you. If you answer the latter, congratulations. You have learned the impact of the buyer’s premium on your bid to park the car.

Being surprised by an auction house invoice, due to naïveté, not reading the rules, or whatever, could conceivably happen once to anyone. But if you are continually “surprised” by invoices, you either need a smaller car, better reading glasses, or a home without a garage. You might also consider a membership in the Audubon Society as an alternative hobby.

Hope this helps.:D

[Rhotchkiss]

Auction houses charge a buyers premium, eBay does not. If you want to bid on anything, auction or eBay, read the damn rules and know what your getting/how it works (and that includes shipping). What is up with people bitching about rules that are clearly stated for all the world to read?? You don’t like the rules, don’t like the shipping, don’t like when or how an auction ends.... don’t participate!

And for the record, if you bid on an auction and don’t read the rules to know you are paying a buyers premium, then F-you, you are an idiot and you deserve whatever unhappiness your stupidity or irresponsibility got you.

[Peter_Spaeth]

Auction houses charge a buyers premium, eBay does not. If you want to bid on anything, auction or eBay, read the damn rules and know what your getting/how it works (and that includes shipping). What is up with people bitching about rules that are clearly stated for all the world to read?? You don’t like the rules, don’t like the shipping, don’t like when or how an auction ends.... don’t participate!

And for the record, if you bid on an auction and don’t read the rules to know you are paying a buyers premium, then F-you, you are an idiot and you deserve whatever unhappiness your stupidity or irresponsibility got you.

LOL I was just reading that the buyer's premium dates back to ancient Rome. Maybe Rob had an ancestor who bitched about it back then.:eek:

[Rhotchkiss]

LOL I was just reading that the buyer's premium dates back to ancient Rome.

I saw that too, expect back then it was XX percent

[Peter_Spaeth]

I saw that too, expect back then it was XX percent

Yeah emptors have been getting whacked throughout history.

[Fballguy]

Let’s say you have a new home with a smallish garage and a full size car.
You are bidding to park the car in the garage. You estimate where the center of the garage is on the back wall of the garage. You aim correctly and end up scratching the right side of the vehicle, which then must be repaired. You are surprised at the cost of placing your bid to park the car and incurring the parker’s Premium.

When completed, you pick up the car and bring it home. It needs to be parked in the garage. Do you follow the exact same process to park the car and repeat getting the same result necessitating another visit to the body shop or do you make an adjustment to your aiming point and move it the required distance to the left, which results in the car not being scratched on the right side.

On the third day do you repeat the unsuccessful process of the first day or the successful process of the second day? If you answer the former, I cannot help you. If you answer the latter, congratulations. You have learned the impact of the buyer’s premium on your bid to park the car.

Being surprised by an auction house invoice, due to naïveté, not reading the rules, or whatever, could conceivably happen once to anyone. But if you are continually “surprised” by invoices, you either need a smaller car, better reading glasses, or a home without a garage. You might also consider a membership in the Audubon Society as an alternative hobby.

Hope this helps.:D

Cool story...but who said anything about being surprised?

[Fballguy]

Auction houses charge a buyers premium, eBay does not. If you want to bid on anything, auction or eBay, read the damn rules and know what your getting/how it works (and that includes shipping). What is up with people bitching about rules that are clearly stated for all the world to read?? You don’t like the rules, don’t like the shipping, don’t like when or how an auction ends.... don’t participate!

And for the record, if you bid on an auction and don’t read the rules to know you are paying a buyers premium, then F-you, you are an idiot and you deserve whatever unhappiness your stupidity or irresponsibility got you.

Well that settles it. Never question anything that's clearly stated. If it's clearly stated it must be right. The government clearly states what they're taking out of your paycheck and I'm sure you never bitched about it.

By the way...The crotchety-meter is off the charts on this post. Love the ones who come in hot with instant anger.

[Fballguy]

LOL I was just reading that the buyer's premium dates back to ancient Rome. Maybe Rob had an ancestor who bitched about it back then.:eek:

And I think the one's on here defending it date back to ancient Rome too.

[ruth_rookie]

PWCC charges 8% commission for any card over $5k.

This thread has me laughing my butt off. On a serious note, if PWCC is only charging 8%, how are they making money? Doesn’t eBay charge them about 10% after their sale? What am I missing here?

[mechanicalman]

This thread has me laughing my butt off. On a serious note, if PWCC is only charging 8%, how are they making money? Doesn’t eBay charge them about 10% after their sale? What am I missing here?

I'm sure because they sell in large quantities, they've negotiated a deal with eBay to pay a much smaller fee.

[ruth_rookie]

I'm sure because they sell in large quantities, they've negotiated a deal with eBay to pay a much smaller fee.

Once again, the small guy gets screwed. Oh well, life goes on.

[Leon]

Once again, the small guy gets screwed. Oh well, life goes on.

The small guy is fine and makes money on ebay. The big guy gets some benefits. No doubt PWCC gets a great ebay rate and they should. It's called business. :)

[Orioles1954]

The small guy is fine and makes money on ebay. The big guy gets some benefits. No doubt PWCC gets a great ebay rate and they should. It's called business. :)

It's obvious you're full of seething rage Leon. Try to calm down a bit, OK? :)

[tiger8mush]

Well that settles it. Never question anything that's clearly stated. If it's clearly stated it must be right.

Why so much sarcasm? If you feel the buyer's premium is unjust, you don't have to bid in the auction. Stick to ebay. Or bid w/AHs and take the BP into consideration. :)

[Leon]

I don't see hot and instant anger as much as the amazement that you can't comprehend a simple matter more cogently. You are griping about a rule that is plainly stated and questioning it's validity? If you don't like the rules don't bid. If it is clearly stated it is in fact correct. AH's make their rules you don't. Not sure why you are so obstinate about an easy issue. You can gripe all you want to, the rules won't change. And yes, for their respective auctions, they are "right."


Well that settles it. Never question anything that's clearly stated. If it's clearly stated it must be right. The government clearly states what they're taking out of your paycheck and I'm sure you never bitched about it.

By the way...The crotchety-meter is off the charts on this post. Love the ones who come in hot with instant anger.

[x2drich2000]

Leon, while I believe Rob is coming across as complaining about paying the buyer's premiums, I think the real root of his question is why do auction houses charge a buyers premium and no sellers fee instead of charging a seller's fee and no buyer's premium. Responses such as "It doesn't matter" or it is just "semantics" address how to think about the buyer's premium from the buyer's prospective, those responses don't really give a reason or explanation for why every auction house charges a buyers premium.

Personally, I think the why is answered in the marketing strategy of the auction house to the consignor and trying to make the AH look as attractive as possible from a consignor's prospective. Charging a seller's fee when other auction houses don't I think would make getting consignments even more difficult, but I could easily be wrong. Leon, not to single you out, but you and Scott had one of the lowest BP and zero seller's fees, did you guys ever discuss lowering the BP even lower and charging a seller's fee instead? What was the driving forces in determining how you collected your commission?

[sb1]

Here are the facts of the matter:


Without consignments there will be no auction. It is much easier to get consignments for free than charging the seller to use your AH platform. The sports collectible auctions have all gone this route and don't expect them to change it anytime soon.

Without making a profit the auction house will not continue to exist. SO...
The buyers are the path of least resistance, they see something they want and are willing to pay for the right to bid and win it. As most have indicated you just have to factor in the percentage of the bp on top of your bid and you have your total cost for the item.

Other less competitive genre's still charge a buyers and sellers premium, because... wait for it... there are very few options for a seller to auction material and/or the huge costs of presenting the items for sale. So the number of additional AH's has actually lowered the overall cost of the transaction. All of these vary from genre to genre. Many more upscale antiquities, paintings, etc, garner a 20-25% seller and buyer fee(think Christies, Sotheby's, etc), as the venue's for these are farer and fewer between, if they had more competition the rates on both sides of the equation would have to give somewhat. Even Mecum and Barrett-Jackson charge sellers and buyers premium, but they are more flexible and even change at the hammer to make a deal for the house, the buyer and the seller come together.

Scott

[Peter_Spaeth]

If an AH had a 10 percent seller's fee and no buyer's premium, my guess is they would do just fine getting consignments.

[sb1]

Peter,

I think it would be an uphill battle for anyone trying to go that route at this point in time.

The buyer is the end consumer and would be happy to pay no fee, but the consignor/seller would not be so willing to pay 10% off the top when he could call the next guy and pay nothing. So again no consignments, no auction. It would take the majority of AH's making this change all at once to make this even plausible, and then one gets short of material and they are back to offering Zero consignor fees. Today's setup is just free market working it's way in the sports AH world.

I might add that the only way you would be able to garner more seller interest in having a consignor fee would be the premise of a bigger payout due to the AH being able to get more money for the client, which is where many/most of the problems of the AH's began with trying to get higher prices than their competitors, which in fact were not always legit sales/bids as we now know.

[Peter_Spaeth]

Peter,

I think it would be an uphill battle for anyone trying to go that route at this point in time.

The buyer is the end consumer and would be happy to pay no fee, but the consignor/seller would not be so willing to pay 10% off the top when he could call the next guy and pay nothing. So again no consignments, no auction. It would take the majority of AH's making this change all at once to make this even plausible, and then one gets short of material and they are back to offering Zero consignor fees. Today's setup is just free market working it's way in the sports AH world.

I might add that the only way you would be able to garner more seller interest in having a consignor fee would be the premise of a bigger payout due to the AH being able to get more money for the client, which is where many/most of the problems of the AH's began with trying to get higher prices than their competitors, which in fact were not always legit sales/bids as we now know.

I don't get it. Any knowledgeable consignor would realize he is going to do better with (using my example) the AH getting a total of 10 percent of the take than with the AH getting 20, regardless of the semantics. It's just the flip side of the buyer's calculus. Even with no seller's fee the consignor isn't paying nothing, he is paying in the form of a reduced hammer price due to BP.

[sb1]

You are correct with the math, but people are not as comfortable with change as a whole and very resistant when they perceive that they are the one paying the tab. It's all psychological for most of them.

I agree, if you told me I got 90% of the take instead of 80% in the end, A. is the better option.

I would add that the larger houses would probably need much more than 10% for their cut to make it work out with larger overhead and that throws a wrench in the works and now you are back to 15-18%(minimally) for a sellers fee and the consignors just won't go for it.

As you know I charge 12 1/2% bp and no sellers fee. My biggest point to consignors is that they are netting 87 1/2% of each item(hammer+bp), which is more dollar in their pocket versus AH that charge 15-23%.

[Peter_Spaeth]

You are correct with the math, but people are not as comfortable with change as a whole and very resistant when they perceive that they are the one paying the tab. It's all psychological for most of them.

I agree, if you told me I got 90% of the take instead of 80% in the end, A. is the better option.

Then if you are right why are people consigning in droves to PWCC, where the fee clearly comes directly out of the sales price? After all they could go to an AH for free.

[Peter_Spaeth]

You are correct with the math, but people are not as comfortable with change as a whole and very resistant when they perceive that they are the one paying the tab. It's all psychological for most of them.

I agree, if you told me I got 90% of the take instead of 80% in the end, A. is the better option.

I would add that the larger houses would probably need much more than 10% for their cut to make it work out with larger overhead and that throws a wrench in the works and now you are back to 15-18%(minimally) for a sellers fee and the consignors just won't go for it.

As you know I charge 12 1/2% bp and no sellers fee. My biggest point to consignors is that they are netting 87 1/2% of each item(hammer+bp), which is more dollar in their pocket versus AH that charge 15-23%.

Exactly Scott. What matters is the AH's total take. You are making my point, I think.

[sb1]

Some of them are much more ebay users and not even aware of most AH's, PWCC has done a great job of marketing themselves to that niche of clients, so they are more comfortable with the venue. I would say the ebay world and AH world are largely two different groups, both when buying and selling.

[x2drich2000]

Peter, you are absolutely right it should not make a difference as long as the auction house is making the same commission and the consignor is getting the same amount. However, that is assuming everyone is rational, which is definitely not the case and where psychology plays a big role. As an example, when you shop online, which do you buy, an item for $10 with free shipping, or the same item for $8 and $2 shipping? Both are the same item, both cost you the same, but more people will choose the $10 with free shipping cause the price structure is simpler to understand and people are drawn to the word "free" (who doesn't like free stuff?). Obviously if the commission is not the same or the consignor is not getting the same amount, then one option is definitely better.

DJ

[sb1]

Precisely, it's all in the eye of ones perception. You can lay out several scenarios of your choosing with the same outcome, and people's choices of a, b, or c. will be greatly varied as to how to get there, even though it's the same ending.

[Peter_Spaeth]

Some of them are much more ebay users and not even aware of most AH's, PWCC has done a great job of marketing themselves to that niche of clients, so they are more comfortable with the venue. I would say the ebay world and AH world are largely two different groups, both when buying and selling.

My guess would be that those worlds are not so dramatically separate any more.

[Fballguy]

I don't see hot and instant anger as much as the amazement that you can't comprehend a simple matter more cogently. You are griping about a rule that is plainly stated and questioning it's validity? If you don't like the rules don't bid. If it is clearly stated it is in fact correct. AH's make their rules you don't. Not sure why you are so obstinate about an easy issue. You can gripe all you want to, the rules won't change. And yes, for their respective auctions, they are "right."

Who says the rules won't change? Maybe you hope they won't but that's not the kind of forward thinking that's made this country great. Just because it's the way it is doesn't mean it's the best way. Everything evolves except auction houses I guess. Those haven't changed since ancient Rome I hear. But I suspect they have a date with destiny. The next generation of collectors won't be as eager to fork over money for nothing as this older generation is.

And for the record...as it's been skewed here...My argument all along is that the buyer should'n't have to foot the bill for a service being provided to the seller. Not that the auction houses are wrong for charging fees.

PS...Save the suppressed bidding argument. That's only a piece...not the whole.

[RedsFan1941]

why do some people choose to consign with an eBay seller instead of an auction house? Could it be because it’s easier on eBay to bid on your own consignment (or a friend’s consignment) and buy it back with no fee? Or because it is easier to retract your bid (for a variety of reasons) on ebay?I bet some — not all — find that very appealing.

[Fballguy]

L I think the real root of his question is why do auction houses charge a buyers premium and no sellers fee instead of charging a seller's fee and no buyer's premium.

Bingo...What do you know. Finally, somebody gets it.

[Fballguy]

Here are the facts of the matter:


Without consignments there will be no auction. It is much easier to get consignments for free than charging the seller to use your AH platform. The sports collectible auctions have all gone this route and don't expect them to change it anytime soon.

Without making a profit the auction house will not continue to exist. SO...
The buyers are the path of least resistance, they see something they want and are willing to pay for the right to bid and win it. As most have indicated you just have to factor in the percentage of the bp on top of your bid and you have your total cost for the item.



And without buyers there would be no auction. So that argument is kind of moot.

This is one of the few honest responses in this thread. The buyer is the path of least resistance. No talk of semantics or it "all being the same in the end". It is what it is. A fee the buyer has to add on....because historically they've been conditioned to.

I'd be curious to see a comparison of sale prices for similar items sold with and without buyer's premium. I'd be willing to bet the difference in most instances is the buyer's premium...and that bidding was not surpressed to the point of equilibrium.

[Fballguy]

Peter,

The buyer is the end consumer and would be happy to pay no fee, but the consignor/seller would not be so willing to pay 10% off the top when he could call the next guy and pay nothing.

Why? It's all the same money isn't it? Isn't the seller going to be ecstatic to know that his bids won't be suppressed? If there's no 10% BP, that means the seller will realize 10% higher bids!

Don't believe me? Just read this thread.

[Bored5000]

Who says the rules won't change? Maybe you hope they won't but that's not the kind of forward thinking that's made this country great. Just because it's the way it is doesn't mean it's the best way. Everything evolves except auction houses I guess. Those haven't changed since ancient Rome I hear. But I suspect they have a date with destiny. The next generation of collectors won't be as eager to fork over money for nothing as this older generation is.

And for the record...as it's been skewed here...My argument all along is that the buyer should'n't have to foot the bill for a service being provided to the seller. Not that the auction houses are wrong for charging fees.

PS...Save the suppressed bidding argument. That's only a piece...not the whole.

If you believe a card is worth $1,000 and are willing to pay $1,000, how is the buyer "footing the bill" when the buyer is still only willing to spend the same amount?

The only way that argument makes sense is if the buyer is completely oblivious of the 20 percent until after the auction is over. Anyone other than a total newbie realizes there is a 20 percent fee and adjusts their bid accordingly so that it will not surpass the maximum amount they are willing to spend.

[Orioles1954]

Although I gave up active collecting 5-10 years ago, when I did consign with an auction house (always with 15-20% buyer's premium) I ALWAYS. ALWAYS. ALWAYS got more with the AH than ebay. There are many well funded collectors who just refuse to go the ebay route.

[Peter_Spaeth]

Although I gave up active collecting 5-10 years ago, when I did consign with an auction house (always with 15-20% buyer's premium) I ALWAYS. ALWAYS. ALWAYS got more with the AH than ebay. There are many well funded collectors who just refuse to go the ebay route.

Check some PWCC prices and get back to us.

[Orioles1954]

Check some PWCC prices and get back to us.

Just personal experience. And PWCC as a whole is another story for another day.

[Peter_Spaeth]

If you believe a card is worth $1,000 and are willing to pay $1,000, how is the buyer "footing the bill" when the buyer is still only willing to spend the same amount?

The only way that argument makes sense is if the buyer is completely oblivious of the 20 percent until after the auction is over. Anyone other than a total newbie realizes there is a 20 percent fee and adjusts their bid accordingly so that it will not surpass the maximum amount they are willing to spend.

Why bother lol. DNFTT.

[Peter_Spaeth]

Just personal experience. And PWCC as a whole is another story for another day.

Whatever the story was years ago I think for many cards that sell frequently in both venues ebay prices are quite competitive. And if people are paying more to AHs it's not because they are hoodwinked by the BPs it's because for whatever reason they prefer the venue.

[leaflover]

Winning a card at an auction is like winning a horse race. You pay the "juice".
With sports betting the loser pays the "juice".

[Aquarian Sports Cards]

If an AH had a 10 percent seller's fee and no buyer's premium, my guess is they would do just fine getting consignments.

Maybe, but they'd go out of business!

[Fballguy]

You're example applies to card collectors. And I can see how it works for them because they know, if they don't get this one...they'll get another shot at it in a month or two. So you can wait to get it at your price. You also have a wealth of previous sales to help you determine what your max price is.

I collect pennants. What I'm looking for comes around once every 10 years if I'm lucky. It's hard to place a price on something that comes along only once every 10 years...so I can't go in saying this pennant is worth $1000, not one penny more...unless I'm also willing to say "Ok...I'm never going to own it because it's probably not coming around again."

So your logic doesn't apply to everyone...Collector's of things more rare than a $1000 card don't have that luxury....and even if they did, it doesn't explain why the buyer should pay for the service provided to the seller.


If you believe a card is worth $1,000 and are willing to pay $1,000, how is the buyer "footing the bill" when the buyer is still only willing to spend the same amount?

The only way that argument makes sense is if the buyer is completely oblivious of the 20 percent until after the auction is over. Anyone other than a total newbie realizes there is a 20 percent fee and adjusts their bid accordingly so that it will not surpass the maximum amount they are willing to spend.

[Peter_Spaeth]

This is a complete non sequitur. The fact that you don't have reliable price information for pennants has nothing whatsoever to do with the buyer's premium issue. In the end you are bidding what you decide to bid, and it makes no difference how the auction calculates its fee. You aren't "footing the bill." You are bidding what you decide to bid. The consignor is footing the bill because he is only getting a percentage of the sum you pay the AH and the AH is keeping a share. If you pay 120, the consignor gets 100. How on earth are YOU footing that bill? Good luck in your search.

[Fballguy]

This is a complete non sequitur. The fact that you don't have reliable price information for pennants has nothing whatsoever to do with the buyer's premium issue. In the end you are bidding what you decide to bid, and it makes no difference how the auction calculates its fee. You aren't "footing the bill." You are bidding what you decide to bid. The consignor is footing the bill because he is only getting a percentage of the sum you pay the AH and the AH is keeping a share. If you pay 120, the consignor gets 100. How on earth are YOU footing that bill? Good luck in your search.

The consignor is getting 100% of the bid...and I'm paying 20% for his right to do so.

Do you want me to send you a dictionary so you can look up the word bid?

[Peter_Spaeth]

Let's see if one other person here agrees with you, Rob, shall we? Not that that would matter since you're the smartest guy on the board, obviously. :cool:

[vintagebaseballcardguy]

When I choose to bid on a card, pennant, whatever that any given auction house has up for bids, I make the choice to bid. It is up to me to read the rules---including what fees I may or may not have to pay if I win. If I object to a buyer's premium, I don't place any bids. If I choose to participate, I have a certain amount I am willing to spend. I don't care what percentage is going to a consignor, the auction house, or whomever...I am hoping that my amount is enough to win the card, pennant, or whatever.

[ValKehl]

The consignor is getting 100% of the bid...and I'm paying 20% for his right to do so.

Do you want me to send you a dictionary so you can look up the word bid?

Rob, what you said may be technically correct, however, when I bid in an auction, I consider my bids to include whatever BP, if any, applies; I assume most collectors would agree with me.

[Fballguy]

Rob, what you said may be technically correct, however, when I bid in an auction, I consider my bids to include whatever BP, if any, applies; I assume most collectors would agree with me.

I agree with what you say...I'm sure many do that. But it's because you've been conditioned to do so. That says nothing about why it should be that way.

[Fballguy]

Let's see if one other person here agrees with you, Rob, shall we? Not that that would matter since you're the smartest guy on the board, obviously. :cool:

Tell you what...If one person here can direct me to an auction house that touts their "20% lower than market value winning bids", I'll never speak of the buyer's premium again.

[tiger8mush]

I agree with what you say...I'm sure many do that. But it's because you've been conditioned to do so. That says nothing about why it should be that way.

A card (or pennant or slab with a pretty flip etc) with a market value of $1000 is up for auction.

Option 1) 0% buyer premium, 10% seller fee. Top bidder bids $1000. Top bidder pays $1k, auction house gets $100 and seller gets $900.

Option 2) 11.11% buyer premium, 0% seller fee. Top bidder bids $900. Top bidder pays $900 + = [B]$1k, auction house gets $100 and seller gets $900

Six in one, half dozen the other.

[Peter_Spaeth]

A card (or pennant or slab with a pretty flip etc) with a market value of $1000 is up for auction.

Option 1) 0% buyer premium, 10% seller fee. Top bidder bids $1000. Top bidder pays $1k, auction house gets $100 and seller gets $900.

Option 2) 11.11% buyer premium, 0% seller fee. Top bidder bids $900. Top bidder pays $900 + = [B]$1k, auction house gets $100 and seller gets $900

Six in one, half dozen the other.

It's no use. Example after example is lost on this dude. He is honed in on the word BID, and his response will be that in your second example the BID was less and the buyer, not seller, had to "foot the bill" for the AH, whatever that means. I think we should all stop feeding this idiocy.

[RedsFan1941]

"I think we should all stop feeding this idiocy."

BINGO!

[Fballguy]

A card (or pennant or slab with a pretty flip etc) with a market value of $1000 is up for auction.

Option 1) 0% buyer premium, 10% seller fee. Top bidder bids $1000. Top bidder pays $1k, auction house gets $100 and seller gets $900.

Option 2) 11.11% buyer premium, 0% seller fee. Top bidder bids $900. Top bidder pays $900 + = [B]$1k, auction house gets $100 and seller gets $900

Six in one, half dozen the other.

You left out an option.

Option 3) Card still sells for $1,000 and the buyer has to pay an extra $111.10 and the seller gets $1,000.

The notion that every winning bid has been deflated by the value of the BP is ludicrous.

[vintagebaseballcardguy]

This thread has become ludicrous. This, on the other hand, is Ludacris.
Carry on...

[x2drich2000]

Rob, in your example (option 3), the buyer now pays $1,111.10 total, not $1000. All you did was add an extra $100 in bids to option 2. So why if a bidder has $1000 to spend (options 1 & 2) would they not factor in ANY additional charges (buyers premium/shipping/service charges/handling/etc) and why would they place that extra $100 bid? If your answer is cause they did not count on the additional fees, please explain how the auction house is responsible for the buyer not reading the terms and conditions prior to bidding.

[mechanicalman]

Rob, in your example (option 3), the buyer now pays $1,111.10 total, not $1000. All you did was add an extra $100 in bids to option 2. So why if a bidder has $1000 to spend (options 1 & 2) would they not factor in ANY additional charges (buyers premium/shipping/service charges/handling/etc) and why would they place that extra $100 bid? If your answer is cause they did not count on the additional fees, please explain how the auction house is responsible for the buyer not reading the terms and conditions prior to bidding.

I don't mean to speak for Rob (nor could I), but I think his whole argument is based on the premise that there are a lot of dumb dudes in the hobby who bid irrationally and erroneously because they don't understand rules/math; and ironically, the more I read his posts, the more I think this premise might be accurate.

[pokerplyr80]

You left out an option.

Option 3) Card still sells for $1,000 and the buyer has to pay an extra $111.10 and the seller gets $1,000.

The notion that every winning bid has been deflated by the value of the BP is ludicrous.

I know there are a lot of stupid people out there, but what percentage of people do you really think dont take the buyer's premium into account when making a bid? Maybe they do it once, then realize when they get the bill. Unless guys are knocking back a few beers waiting for extended bidding to end, I dont see your example coming into play often.

[pokerplyr80]

Well, I managed to get through the avalanche of auctions over the last few months and am still nearly solvent. But I just don't under stand the allure of PWCC as a consignor. I initially thought they were primarily a dumping ground for lower condition graded cards, but some of the more recent stuff on Ebay was pretty impressive. Here is my query: Why would a consignor go to PWCC with, say, a PSA5 T206 Cobb Green and pay a scheduled fee when he/she could take it to a national AH and pay nothing?

Almost every card I couldn't sell here or privately, as well as those I didn't bother trying with, have gone to PWCC. Lower fees, high prices, and they run an auction every month. I dont understand why anyone wouldn't want to use them. Unless you're selling more obscure cards that will benefit from a write up and an auction catalog.

[Baseball Rarities]

A card (or pennant or slab with a pretty flip etc) with a market value of $1000 is up for auction.

Option 1) 0% buyer premium, 10% seller fee. Top bidder bids $1000. Top bidder pays $1k, auction house gets $100 and seller gets $900.

Option 2) 11.11% buyer premium, 0% seller fee. Top bidder bids $900. Top bidder pays $900 + = [B]$1k, auction house gets $100 and seller gets $900

Six in one, half dozen the other.

Exactly. It could not be any more straight-forward. I do not understand the confusion.

[Fballguy]

I don't mean to speak for Rob (nor could I), but I think his whole argument is based on the premise that there are a lot of dumb dudes in the hobby who bid irrationally and erroneously because they don't understand rules/math; and ironically, the more I read his posts, the more I think this premise might be accurate.

That's exactly right. The notion that everyone adheres to the X minus 20% bidding approach is comical. And the notion that bidding is suppressed by the value of the BP is even more comical. I spent 10 minutes comparing sale prices at Heritage to Ebay and on my first try Heritage was...I kid you not...20% higher for the same PSA 5 1953 Mantle card.

These defenders of the BP are living in an illusion.

[x2drich2000]

OK, lets take your premise that the BP doesn't suppress the bidding and follow the logic. Why is that a bad thing for the auction house or the consignor? The auction house is in business to make money and the consignor wants to get as much as they can. Neither are responsible for the actions of a buyer. If the buyer overpays, both the consignor and auction house make more money. The buyer knows the rules before they place a bid and they choose to bid or not. The buyer is not forced to bid. If the buyer can get the same item cheaper on Ebay or wherever, then what is their motivation to bid in the auction? All the auction houses I've seen make the buyer's premium clear in the rules and usually include an example demonstrating how the fee works in connection with the bid. If some one is willing to voluntarily bid without reading the rules of the auction then that is their fault and no one else. It is not the consignor's or AH's job to protect people from themselves. Buyers need to be responsible for themselves.

Now Scott has very clearly outlined the history and reasons why the AH keep the seller's fee at 0%. So if it not the AH's job to stop people from bidding, and both the AH and consignor benefit from the masses of people who don't read the rules, how does changing to a 0% buyer's premium benefit the AH or the consignor?

In addition, I can't speak for others, but personally, I buy almost all the items I sell on Ebay from AH. How am I able to make money doing so if the AH with their 20% buyer's premium is more expensive and I'm also paying over 10% in Ebay fees when I sell the item?

[Peter_Spaeth]

..

[frankbmd]

No buyer's premium
No consignment fees.

317280

[Leon]

No buyer's premium
No consignment fees.

317280
You forgot the 3rd one.

No auction house.


.

[TanksAndSpartans]

With regard to what I said below, I'd be surprised if anyone found empirical evidence that people wind up paying more (all else being held constant i.e. same item etc.) when the auction format includes a BP. That being said, I'm sure it happens - people can get carried away in the moment and as this thread stayed alive it did get me to thinking about another point:

I think the BP is kind of "phony". It seems more genuine to me that the AH should just get a percentage of the final bid. I don't care how simple the math is, why make people do it? I've been in the situation before placing a bid and the BP wasn't shown on the bidding screen, so I had to go search what it was elsewhere on the website before making the bid. It was kind of annoying. And why? Just so the AH can "frame" their model as not charging the seller? There is evidence out there framing i.e. describing 2 equivalent options in different ways can result in people choosing differently. I guess if one AH dropped the BP, other AHs could use it for marketing and say "we don't charge the seller, consign with us." It would be nonsense, but it would probably happen.

It's never been a consideration for me buying or selling, but I would see it as an improvement if the BP went away.

This is actually an interesting academic question. Economics 101 would certainly tell you its completely irrational to behave differently because in one case the amount you pay is what you bid (plus shipping) and in the other case the amount you pay is what you bid + 20% + shipping. The rational thing to do is make the calculation of adding the BP and behave (bid) the same way in both cases (i.e. reduce your bid because you know you will be hit with a BP at checkout). Someone would need to do a study to see if people actually behave according to the theory or whether the fact that that 20% in not included in their bid induces them to pay more as if they are willing to momentarily forget they will be charged the 20% later. It's entirely possible, and also the reason I believe some auction houses want you to have to do the math in your head (or not do it), rather than show you the BP when you place your bid. I think its something called the framing effect where people view options that are really the same as different depending on how they are stated.

One minor point is because the bid increments are wider for AHs than eBay, sometimes I have to make a decision whether I want to go under or over my target - something I never really have to do on eBay where the bid increments are very narrow.

[Fballguy]

Why is that a bad thing for the auction house or the consignor?

It's not a bad thing for the auction house or the consignor. It's a great thing for them. This discussion is about the BP being bad for the buyer and why the buyer should pay for a service being delivered for free to the consignor. And for some whether the buyer is really paying for that service at all (Spoiler Alert: They are).

I buy almost all the items I sell on Ebay from AH. How am I able to make money doing so if the AH with their 20% buyer's premium is more expensive

Because there is room on "lots" in the AH format. Bidding on lots is naturally lower because of the nature of items that get put together into lots. You're not getting a T206 Wagner in a lot with other cards. So "Lots" are perfect for resale. I will agree that I have made some great purchases on lots of pennants even with the BP factored in. I typically can sell off the excess in the lot and get the one I really wanted in the lot for pretty close to free. I doubt you're buying a single PSA 5 1953 Topps Mantle (or any other single item) at an AH and flipping for a profit on eBay.

OK, lets take your premise that the BP doesn't suppress the bidding and follow the logic.

It's not a premise:

Most recent PSA 5 1953 Topps Mantle at Heritage:

https://sports.HA.com/itm/baseball/1953-topps-mickey-mantle-82-psa-ex-5/a/7185-80376.s?type=share_btn_

Most recent PSA 5 1953 Topps Mantle at Ebay:


http://r.ebay.com/TqUFOY

http://r.ebay.com/3Cu8Ei

http://r.ebay.com/DHs7mR

http://r.ebay.com/CkXc3U

http://r.ebay.com/nKMPi6

http://r.ebay.com/r9bCu1

http://r.ebay.com/PZfZFd

Let me know how much money you would've made on this card.

[Exhibitman]

It's all marketing, guys. No matter how many math examples we run, the fact is that consignors hate hearing about a commission. That's why a high BP is the norm: most AHs will waive the commission for a decent consignment. Just like shipping. REA (hi Brian) doing the free shipping is brilliant because shipping pisses off so many customers. It is a minuscule part of the overall invoice from the AH in most cases but it feels like dirt in your eye, especially when the AH charges for insurance to value and you just know that they have a blanket insurance policy that covers to a set limit regardless of value, so it is a profit center.

Scott B is definitely spot-on about other fields and what AHs charge there. We are lucky that we (consignors) can usually get a no commission deal. Try selling an entertainment item; you are nearly always going to pay 35%+ total because the AHs that deal in those materials do not waive their commissions unless the item is astounding.

As for BP splits, well, if you are offering a $100K card for consignment, you have leverage to get a piece of the BP. Nothing wrong with that.

I am not surprised people use PWCC for some nicer stuff. It gets the eBay customer base of eyeballs, the rate is substantially lower than most AHs charge, and cards to cash is fast as compared to other outlets. I don't know what others experience, but it is very frustrating when I consign an item in January, not see it hit the blocks for months and not get paid for another 30-60 days. Particularly if I have a use for the funds and can't wait half a year or more to get to paid.

[TanksAndSpartans]

you are nearly always going to pay 35%+ total because the AHs that deal in those materials do not waive their commissions unless the item is astounding.

Adam, great post - I found the same thing this morning when I did some research = "google searches" - the BP gives AHs the opportunity to split their take into two different accounting items.

Another interesting thing was I did find a couple studies that were a bit surprising - one implying a low BP, less than 5%, doesn't suppress bidder behavior and another that showed a 10% BP compared with no BP had a 9% impact i.e. bidders did not reduce their bids by the full BP, but interestingly they used this as evidence bidders will reduce bids when the BP is present because it was very close to a 1-1 reduction.

[Peter_Spaeth]

A study by Gerding, Rogers, Dash and Jennings at the University of Southampton (UK) titled “Sellers Competing for Buyers in Online Markets: Reserve Prices, Shill Bids, and Auction Fees” states, “Another popular type of auction fee is the buyer’s premium, which is paid by the winner of the auction and is a fraction of the closing price … note that a bidder with a given valuation will correct his/her bid … such that the bid plus the fee … is equal to the bidder’s valuation. Interestingly, since all buyers thus lower their bids, the seller ends up paying the fee even though the fee is originally charged to the buyers.”

[RedsFan1941]

the study obviously was written by a bunch of auction house cronies who are very angry

[tiger8mush]

"...Interestingly, since all buyers thus lower their bids, the seller ends up paying the fee even though the fee is originally charged to the buyers.”

Yeah but thats not Webster's definition of a bid so it can't be true

[RedsFan1941]

just got a text from the troll. his shift under the bridge scaring weary travelers ends at 9. he will check in then.

[Fballguy]

just got a text from the troll. his shift under the bridge scaring weary travelers ends at 9. he will check in then.


Old man humor. I love it. I feel like I'm being trashed talked to by this guy.

<a href="http://imgbox.com/m3RJe47d" target="_blank"><img src="https://images2.imgbox.com/12/9d/m3RJe47d_o.jpg" alt="image host"/></a>

[Fballguy]

A study by Gerding, Rogers, Dash and Jennings at the University of Southampton (UK) titled “Sellers Competing for Buyers in Online Markets: Reserve Prices, Shill Bids, and Auction Fees” states, “Another popular type of auction fee is the buyer’s premium, which is paid by the winner of the auction and is a fraction of the closing price … note that a bidder with a given valuation will correct his/her bid … such that the bid plus the fee … is equal to the bidder’s valuation. Interestingly, since all buyers thus lower their bids, the seller ends up paying the fee even though the fee is originally charged to the buyers.”

The University of Southhampton? What's the matter, couldn't find a study from Bangladesh? Don't get me wrong, who better to go to for insight on the bidding habits of Americans in the sports memorabilia market than the Brits...after all they were playing the game back when it was still known as BaseRock.

Amazing they know the thought process of "all bidders". Sounds like a thoughtful study.

[Peter_Spaeth]

The rants of a guy on a chatboard who is a minority of one doubtless are more persuasive.

[RedsFan1941]

"mom! the meat loaf! we want it now!"

[Snapolit1]

Tired issue. . . I've posted on it a number of times myself and mostly been told I'm wrong. I think AHs love the BP because it does lead to higher bidding prices. In a perfect world all buyers would religiously include the vig in their bids. They don't. Just like why someone says a meal at a restaurant cost us $100, and not $120 including a tip. People aren't perfect decision making machines. Particularly with regard to a discretionary purchase like a collectible that they are passionate about. But most people here are perfectly rational and analytical in their bidding approach so I may be in the minority.

I've also had more than a few drinks at charity auctions and overbid for crap that I really don't need.

[Aquarian Sports Cards]

Tired issue. . . I've posted on it a number of times myself and mostly been told I'm wrong. I think AHs love the BP because it does lead to higher bidding prices. In a perfect world all buyers would religiously include the vig in their bids. They don't. Just like why someone says a meal at a restaurant cost us $100, and not $120 including a tip. People aren't perfect decision making machines. Particularly with regard to a discretionary purchase like a collectible that they are passionate about. But most people here are perfectly rational and analytical in their bidding approach so I may be in the minority.

I've also had more than a few drinks at charity auctions and overbid for crap that I really don't need.

remind me to notify you of my next charity auction :)

[FourStrikes]

the pain of the mind is much worse than the pain of the body...

just sayin'.