Mastro Increased Buyers Premium

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Posted By: Andy

Just got an email saying the buyers prem. was up'ed to 17.5%.

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Posted By: Chris Mc

With all things considered this is going to become the standard for auction houses. Ever increasing premiums for buyers of vintage items. Collecting vintage items is becoming more and more popular,auction houses know this. With the ebay stage set, finding raw cards from other sources will carry a premium, an ever incresing premium.

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Posted By: Scott Forrest

...more competition for quality consignments and the need to offer consigner incentives?

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Posted By: Hal Lewis

I assume that this is because Mastro is no longer able to charge a "seller's premium" since other major auctions are accepting high quality consignments on a 0% commission basis.

Thus, Mastro will be able to get more high quality items in their auctions... because sellers do NOT want to get hit with commissions if possible...

and buyers will be the sole source of profits for Mastro and all major auction houses.

In the end, it really doesn't affect the price of cards.

If you bid $1,000...

the whole World knows that you really paid $1,175 for the card...

so the card is really worth $1,175.



QUESTION:

If the same card sold on EBay for $1,175...

how much would the seller end up with after EBay fees???

If the answer is a lot more than $1,000...

then EBay is becoming an even better mode of sale than major auction houses.

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Posted By: Max Weder

http://pages.ebay.com/help/sell/fees.html

it depends

but say listed at $500+ to start

$4.80 insertion fee
$28.12 on first $1,000 selling price
$2.63 (1.5% on balance)

optional fees

say only

$19.95 Gallery Featured



Total $55.50,

thus net to seller: $1,119.50 versus $1,000

There are of course many other factors to consider.


Max

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Posted By: Hal Lewis

So Ebay is 11.5% better for sellers...

IF (this is the key variable) the same number of buyers are paying attention to EBay and are confident enough to bid on the seller's items.

Interesting.

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Posted By: Scot

Mastro sold my 1948 leaf set years ago. They charged me a selling fee of 15% and the buyer a 15% buyers premium + shipping. I waited 7 weeks for the balance. I've bought some really nice stuff from Mastronet but, I try to sell on my own now.

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Posted By: JimCrandell

Hal,

I think you hit the nail on the head. The last few months I have gotten calls from most of the large auction houses saying no commission on what you give us.

They have got to make up for zero commission on the sell side somewhere so it results in a bump up on the buy commission.

Dav

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Posted By: Charlie

Is Robert Edward Auctions rate to consign material 0% also?

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Posted By: Hal Lewis

Exactly Jim (Dav).

Matro and Robert Edwards have sent me several requests to let me consign my stuff through them at a 0% seller's commission. This is the benefit to sellers of a competitive free marketplace.

But, these companies deserve to make money SOMEHOW...

so it does seem much fairer for them to make it all from the BUYERS and not the sellers.

After all...

without the sellers, the auction houses would make ZERO.

The buyers can just adjust their bids and factor in the sales commission to whatever they are willing to spend.

In the end...

the seller still makes 17.5% LESS than what the buyer was willing to pay...

but at least he is not getting hit TWICE by the auction houses!!

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Posted By: Bob C

Just what we need - higher fees

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Posted By: Dan Koteles

I think that you are 100% correct on all points, I couldnt have said it any better.

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Posted By: dan mckee

Soon this hobby will be for the wealthy only. I can't compete and it is darn frustrating. Higher fees are expected. Everyone's thoughts here are right on.

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Posted By: Hal Lewis

Kind of raises an interesting question.

If I have a card that people will pay $1,200 to buy, but the only way I can sell it is to give $200 to the auction house...

is my card "worth" $1,200 ... or $1,000???

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Posted By: leon

It's still worth what someone is willing to pay for it, $1200. It's just that you'll only recognize $1000 if you consign it. I don't blame Mastro but it still sucks for buyers. I guess with a lot of the negotiated lower consignment fees, to get quality material, this will be the norm for major auction houses (actually it already is). Just wait till I consign. The other ways to sell do become a little better as escalating fees get put on buyers...I think a selling point, for selling privately, now can be NO BUYERS FEE of 17% to 20%.......regards

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Posted By: Scott Forrest

the numbers have been moved around, but unless the bidders fail to read the emails Mastro sent out, the results dollar-wise should be the same for everyone.

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Posted By: JimCrandell

Hal,

$1,200.

I always factor in the buyers premium when I submit top-all bids and I would think all buyers would but perhaps not.

Jim

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Posted By: Hal Lewis

But Jim...

here is my point:

The split-second you buy the card and pay $1,200 for it... it LOSES $200 in value (to you) since you can only turn around and collect $1,000 for it if you sell it again for $1,200 through the same auction house with the same pool of bidders.

The proverbial Catch-22.

It is more valuable to the rest of the World than it is to its owner!!

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Posted By: JimCrandell

Hal,

I think that the established value for the card becomes $1,200 and that is what you could turn around and sell it for.
If I was bidding on this card on ebay I would pay $1,200 or if I was buying it in a private transaction I would pay $1,200.

Jim

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Posted By: Hal Lewis

Jim:

In my original hypothetical, I included that the "ONLY" way to sell it was through the auction house.

Sure, if you can find a private buyer to pay you top dollar for every card, then you get to keep 100% of the value.

But if finding those buyers was so automatic, then wouldn't the auction houses already be out of business?

Don't a lot of buyers only pay top dollar through the large auction houses because they are fearful of buying anything from an unknown individual?

Yes, I would love to think that I could spend $117,500 on a rare card from Mastro and be assured of being able to sell it at the drop of a hat for the same amount...

but isn't it more likely that the only way to once again get a "top dollar" sale of $117,500 for the card would be to go the same route through a large auction house??

And if so... then I would end up with $100,000 in my pocket for a card for which I had just paid $117,500.

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Posted By: leon

Auction houses aren't the ONLY way to sell. There is always the Ebay way. They take a lot less fees but also might get less heavy hitter bidders. I do remember BMW Sportscards selling some very valuable cards on ebay and getting good money for them. I think I remember a Bronco Ngurksi (sp?) getting about 80k on Ebay....and I think there was a very high end '51 Mantle too....But in the long run it's still going to be the auction houses that get the best stuff in quantity. This also might be an open door invitation for the smaller auction houses to gain a little market share. I don't think I've ever heard of anyone complaining about 19thCenturyOnly and some other smaller ones.....If I were going to sell my collection I would certainly have to look at all venues to see what would realize the most money in MY pocket. regards

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Posted By: Hal Lewis

Leon:

I agree 100%, and was extolling the virtues of EBay earlier in this post.

In fact, the whole reason for my calculated hypothetical was to show where sales on Ebay might give us a MORE ACCURATE indication of an item's "true worth" to the buyer.

EXAMPLE:

Someone bid $210,000 for a 1914 Babe Ruth card in the last REA auction. But, with the buyer's commission, he ended up having to spend $240,000.

If the exact same card was immediately consigned to Mastro and put up in their auction a few weeks later...

would there REALLY be ANYONE willing to bid $240,000 for the card when they would truly have to pay $290,000 after the buyer's commission??

It is hard to imagine that NOBODY (except the buyer) was willing to spend more than $240,000 for the card in one auction...

but that a few weeks later someone would suddenly pay $290,000 for it??

Is the card worth $210,000? (What the original seller pocketed)

Is the card worth $240,000? (What the original buyer paid)

Is the card worth $290,000? (What the next buyer would need to pay for the original buyer to sell it)

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Posted By: Cy

Hi,

I'm not sure what the problem is. The only people that I see losing out are the high dollar consigners and Mastro. Before if a consigner had an item worth $100,000 he was able to negotiate his sellers fee down to a lower percentage and, thus, he gained more than someone who had to pay the entire seller's fee. But now if you consign $3,000 or $100,000 you are "paying" the same amount.

Mastro is also (possibly) losing out. Before they were picking up 10% on both ends for a 20% total. Now they are only picking up 17.5%. Mastro is counting on buyers not changing their buying habits which will allow them to make nearly the same amount. Frankly, it is up to you, the buyer to do the math. I am quite sure that most buyers from the board actually account for the buyer's fee when negotiating their bid. At least I hope so. That means if you are willing to spend $1500 on a card, bid accordingly, including the buyer's fees and nothing changes.

To help you out a little, here is a way to place your bid. Say you are willing to spend $1750 on an item. To figure out your actual Mastro bid, take $1750 and divide it by 1.175 (100% + 17.5% buyer's fee). This turns out to be $1489.36. Just place your bid near that number and you won't pay over your $1750, including fees.

Happy bidding!

Cy

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Posted By: JudgeDred

The one nice benefit of bidding with a major auction house is that you are relatively certain that what you are getting is real and the reputable auction houses will do their best to due dilligence in the cases where there may be a "disagreement" between the buyer and the auction house.

Ebay is somewhat like the wild west of collectibles. The reputable sellers do well because they take care of business and people are comfortable bidding on legitimate items by these reputable sellers. They realize higher ending auction prices than other ebay sellers because they have proved time and again that they will "do the right thing."

If John (or Jane) Q. Nobody puts up a nice card for sale on ebay then there is apprehension to bidding and that person will not realize the highest possible ending bid. It's a hassle to try and get your money back from a seller when you get that T206 Wagner in the mail only to find out it's another reprint. You get the idea...

If someone from N54 puts an item up for grabs then they can let the other forum members know and that might add a little more legitimacy to the item up for auction and the realized price may be a bit higher than John (or Jane) Q. Nobody.

Ebay does offer up some pretty good bargains because sellers are virtual unknowns. It's hit and miss - do you really like hassling with unsavory people? Just recently I was lucky to get a refund on a reprint card from an ebayer. Actually, the story is long and somewhat funny, but it was a hassle.

In my opinion if an item sold for $10,000 and the buyers premium raised the final realized price to $11,500 then the card's value is $11,500 because the buyer should understand the bidding dynamics and the final realized price is just that - a FINAL REALIZED price.

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Posted By: Hal Lewis

Cy:

You are not answering the question, so I will use your example and ask:

Would the card be worth $1489.36 or $1750??

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Posted By: leon

IMO it's worth what the buyer is willing to pay with all fees added in. $1750 is what he's paying then $1750 is the market value to that person at that time.....regards

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Posted By: Hal Lewis

Leon:

If your fabulous collection of rare cards has a "market value" of $500,000...

and you want to sell them to buy a $500,000 restaurant...

then under your definition, they would draw total bids of $425,000 in a Mastro auction...

because with the 17.5% buyer's commission, the buyers would end up paying Mastro a total of $500,000 to procure the cards.

OK, you can call this "free market valuation" if you want...

but you are still $75,000 SHORT of being able to buy something else that is "worth" $500,000.



That's not an imaginary $75,000. It's real.

That's what I am talking about.

The true "value" of a card to its OWNER and only to its owner.

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Posted By: leon

It's semantics. You are talking about the owner (seller) and I am talking about the buyer. Let's take your collection for instance. Let's say it's valued at 1M to YOU. A buyer that would pay exactly 1M would mean that you only get about $825k for it....as the buyer has to pay the buying fees. Soooo the cards are still worth 1M, as that is what the buyer is paying....but you are only receiving about $825k. No different than selling a house and giving the realtor 5%-6% commission. If the house get's sold for 1M then the seller only get's $940k or so......that doesn't mean the house is worth less there's just some cost's to sell it..

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Posted By: Hal Lewis

I know.

I just wish someone would start selling $100 bills for $94.

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Posted By: JudgeDred

Realized sale price at the end of the auction is just that. You could take the same items and auction them off three months later and the price could either rise or fall. Bottom line the card is worth the total amount someone is willing to pay for it. As a seller you may realize less because of a sellers premium but that only means that it was worth less to you because you let someone else sell it for you and that is the fee you pay to maximize your income potential.

Hal and Leon, c'mon now, do you guys really expect us to believe that your collections are collectively only worth $1.5M? Lets get out the measuring tape...

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Posted By: Hal Lewis

My collection may fecth $1,000,000 whenever it finally goes to auction in 50 years...

but it is only "worth" $50,000 to me because the "buyer's premium" will be 95% by then.

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Posted By: Cy

Hal,

Don't dispair. When that day comes for you to sell with a 95% buyer's premium, I'll pay $65,000 for your $1,000,000 collection and let you make an extra $15 K.

Cy

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Posted By: Hal Lewis

NOW you clearly understand how it works!

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Posted By: Julie

to a private person--from a private person. Never! I would never charge or pay a buyer's premium (or seller's premium) in a private deal.

Of course, you can consign your stuff to non-auction dealers, and that will sometimes cost you some...

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Posted By: davidcycleback

My feeling is that there should be some balance in charges. Charging one side 20 percent and the other side zero is not a swell idea in my opinion. I do not even beleive that this imbalance is benificial to consigners.

I beleive in paying for a job well done, or at least if you insist on a job well done.