Buyer's Premium

[bcornell]

[REMOVED] This forum is done.

[Cat]

No Bill, it's not your imagination. They have been moving up in a stealthful fashion.

I'll buy into this generalization, as well.

I'm going to generalize and say that rates above 15% are too high for both consignors and buyers.

[pro9]

Agreed on both points.
At least with Heritage you can pay with a credit card and get something back.

[ethicsprof]

i agree with the aforementioned and have to add that it's mighty nice to see
Elliot on the board again!!
all the best
barry

[cbcbcb]

It seems that the buyer's premium would be almost entirely passed onto the consignor. When I bid, and I hope when most others bid, I price in the buyer's premium into the value of the item. If an item is worth $200, I will only bid $167 if there is a 20% BP. Thus, the consignor takes the entire hit. It would be interesting to do a study on this.

[wonkaticket]

No doubt on the rise...could be from 0% deals on the sellers side from the auction houses to draw stuff out?

But agree if it gets any higher I will get better rates at the local pool hall from the guy in the back who loans money.

[bcornell]

Barry - I can make Elliot appear at will. I am even able to conjure him up in Cleveland, although he resents it.

Chris' point was one I didn't raise on my first post. Everyone offers 0% fees to sellers now. But if you're not paying attention to the BP when you're consigning, you can overestimate how you'll do since most buyers pay attention to the math.

Edited to add, with more grumpiness: yes, I can pay Heritage with a cc. I'm now also able to pay them the horrific CA (California, not Canada) sales tax of close to 10%. Couldn't they have set up shop in, say, Idaho?


Bill

[wonkaticket]

"since most buyers pay attention to the math"

Boy I've had some auction winnings where I sure didn't pay attention...oops

Anyone here get caught up in a 3am bid fight and forget that little backend...or am I alone. LOL

Cheers,

John

[caramelcard]

"Hunts: 15%, I think, although their website is so awful that you can't learn anything from it."


chuckle.

[vargha]

It's simple economics. An auction house has to make money. We don't seem to have a problem with the companies we work for making money, but boy, those greedy SOB's at (fill in the blank) are really sticking it to us. As consignors have worked consignment fees down to nothing in many cases, just where does the auction house make a profit after creating a glossy, full-color catalogue, running an online auction and then fulfilling it?

The truth is that psychologically, sellers feel more comfortable with paying fees they never see. The buyer's fee is paid by the seller whether he realizes it or not as it is money paid for his card(s) that he never receives. Yes, sometimes buyers fail to factor in the 20%, but this is the exception rather than the rule. It's the same reason why your paycheck has tax deductions taken out each time you are paid rather than paying you your gross earnings and asking you to write a check to the government taxing authorities at the end of the year.

[barrysloate]

It wouldn't matter if the consignor received full hammer and the BP was 20%, or if the BP was waived and the consignor received 80% of hammer. The lot would still sell for the same amount, the seller would still receive the same amount, and the auction house would still get its 20% (I know there is a fraction of a point difference but that is just a technical point).

I think complaints about the BP are pointless. An auction house has expenses and needs to make a profit.

[Peter_Spaeth]

If consignors don't like it, they can vote with their feet and opt for the houses with lower fees. It's a free market economy.

[teetwoohsix]

Originally Posted by cbcbcb

It seems that the buyer's premium would be almost entirely passed onto the consignor. When I bid, and I hope when most others bid, I price in the buyer's premium into the value of the item. If an item is worth $200, I will only bid $167 if there is a 20% BP. Thus, the consignor takes the entire hit. It would be interesting to do a study on this.

I wonder how it would work out if the BP was split down the middle between the consignor and the buyer.....say if it were 15%, consignor 7.5% and buyer 7.5%..........maybe the buyer would bid higher, and overall the seller may make more?

I know at first this could possibly steer a consignor the other direction, but the buyer's would love such a low BP, more money to spend -thus, consignor may make more $$ in the end.

Clayton

[DanP]

Originally Posted by cbcbcb

It seems that the buyer's premium would be almost entirely passed onto the consignor. When I bid, and I hope when most others bid, I price in the buyer's premium into the value of the item. If an item is worth $200, I will only bid $167 if there is a 20% BP. Thus, the consignor takes the entire hit. It would be interesting to do a study on this.

I agree, and I think most buyers do also. If that's true, you're correct the co-signor takes the entire hit. However, it seems to me like the sellers get a premium on their products at these auctions (rather than eBay). So if the seller gets 20%+/- more than they would selling on eBay they really aren't "taking any hit". Dan

[Davalillo]

I don't get it? The buyers premium means nothing to a potential buyer. He has a total price he is willing to pay--how much of it is accounted for by the buyers premium is meaningless

[ls7plus]

I agree--the buyer has to and does factor the buyer's premium into the price he is ultimately paying for the card. When the premium is rising, as it has been for some time now, the seller simply nets less. He does, however, receive the benefit of the auction house's distribution network and publicity related to the auction, as well as the effort the auction house puts into depicting and describing the card, as well as often times the player himself (see Bill Goodwin's catalogues). As Barry correctly states, the auction house has to make a profit too.

Larry