Effective Buyer's Premium - A New Term

[4815162342]

There seem to be more auction houses than ever before. Why hasn't the competition lowered BPs?

[glchen]

Originally Posted by 4815162342

There seem to be more auction houses than ever before. Why hasn't the competition lowered BPs?

There is a bunch of competition among auction houses. However, it is practically all on the consignor side, especially with the lower seller commissions (e.g., see Mile High's latest offers). In fact, to offset, lower seller commissions, auction houses often have to raise buyer premiums. Auction houses make their money through consignments. The more consignments they get, the better off they are. Consignors take into account multiple factors such as the seller's fee, the buyer's premium, the prices that the auction houses typically deliver, the auction houses' customer list, the AH's advertising, speed of consignment payout, auction ending style, and so forth to decide best where to send their items. As long as auction houses have stuff that buyers want, they will do just fine.