Posted By:
boxingcardmanThe auction houses presently demand 20/20. Maybe on an average lot with a repeat consignor you can get them down to 10/20. Taking 10/20 as the figure, if the card sells for $10,000, I get $9,000 and the house gets $3,000 ($10,000 + 20% + 10%). 5/20 isn't realistic as an example, but let's say I got that on a $10,000 sale. By my calculations I net $9,500 and the auctioneer gets $2,500. If the commission is 0% and the BP is 25% I get $10,000 and the auctioneer gets $2,500. The real issue isn't how much is taken (the numbers are the same), it is how it is allocated. Under a no commission, higher BP scenario, the buyer eats the other $500.
Now you may reply that a higher BP generates lower bids by raising the total the buyer has to spend. The impact depends on how you structure the auction. If the auction uses the 10% advance structure, I don't think a 5% bump in BP has much effect on decisionmaking. If the bid is $11,000, the extra 5% BP is $550 (at 20% BP an 11k bid = $2,200; at 25% BP an 11k bid = $2,750). Are you telling me that a person who can pay $13,200 for a card won't bid the next increment on it because the price would go to $13,750? That is not what I've seen people do. And at lower values, the numbers are even less likely to deter. I don't know of too many collectors who would lose a $1,000 card over fifty bucks (I know I'd simply not go out to dinner one night).
Besides, all this is academic. For a sufficiently valuable item, the numbers don't matter because the consignor will simply negotiate the aggregate rate down by taking a chunk of the BP or consigning the card to the next auctioneer who will meet his price.