With all the auctions out there

[x2drich2000]

Originally Posted by Fballguy

You and Peter have been in the game too long. You've accepted it as normal and come up with some way to rationalize it. Just because something has always been done, doesn't mean it has to be done.

eBay is an auction house. eBay doesn't charge a buyer's premium. What's that you say? eBay doesn't have overhead? Their 12,000+ employees work for free?

Who doesn't get it Peter?

You forget Ebay doesn't do most of the work. They are the discount broker in the auction world. They do not research items, list items, scan items, package items, solicit consignments, attend shows, promote the sale, etc. All of these tasks are done by the seller on Ebay, who ultimately still has to pay Ebay a fee for using their platform. Ebay is simply just a hosting company. This would be comparable to the AH using Simpleauctionsite or Createauction as the platform for their auction. Out of the buyer premium charged, the AH pays for whichever company that hosts the auction (unless, of course, they built and maintain the platform themselves). When you list on Ebay you are taking the role of the AH and just using their platform.

Regarding who pays the AH fee. Mathematically, it doesn't matter. Either the buyer pays it in the form of a buyer's premium or the consignor pays it in the form of a seller premium. The total amount the the buyer pays should never be different. The auction house needs to net $x per $y in sales in order to stay in business.

The big difference is the AH needs to solicit consignments. Without consignors the auction house will not survive. Psychologically, it is a lot easier to convince someone to consign something with zero fees then it is to tell them they will pay 10 or 20%, especially if another auction house is offering zero fees. Losing consignors to try to change a process everyone else follows does not seem like a smart business plan to me.

DJ