What to expect from AH consignments?

[jh691626]

Hi all--

This has probably been covered ad nauseum, but as a newbie to all of this I had a couple of questions:

I am wanting to consign about 10-12 items (tickets, autos) to an AH. The value on most items is $100-200, a couple are ~$500. Small potatoes for a big auction house. It does seem to me that the biggest AHs do get the best prices, looking carefully at this kind of item and past sales, though it is of course very variable!

I went to two auction houses to ask about these. One was willing to take most of them, and wanted 7.5% on top of their 20% buyers premium. The other would take them, and wanted 10% on top of their 20%.

This seemed like a lot (30% total vig!). I realize these are puny items for them and maybe barely worth their time, so maybe this is just the reality and that is fine. But it seemed like more than I expected and more than I thought I'd seen in discussions around here. Is this normal?

Thank you and sorry if this has been discussed to death and I am just late to the game.

Jeff

[bobbyw8469]

That is entirely too much. They are basically telling you they don't want your consignments in a roundabout way. No one likes to hear that their consignments are "not good enough" for a particular auction house, but that is what they are telling you. I would hold onto the items or try to get rid of them yourself.

[bobbyw8469]

Originally Posted by bobbyw8469

That is entirely too much. They are basically telling you they don't want your consignments in a roundabout way. No one likes to hear that their consignments are "not good enough" for a particular auction house, but that is what they are telling you. I would hold onto the items or try to get rid of them yourself.

Edited for clarification.....I misread what you are saying. So one auction house only wanted to charge you 7.5 and the other 10%??? That is great. You can't factor in the buyer's premium. That is not yours. You can TRY to get 0% commission, but the norm seems to be to extract a little bit from the buyers AND sellers.

[x2drich2000]

IMO it is highly dependent on the items and the auction houses. Some of the bigger auction houses do seem to get better prices, but not always. If you are paying more it may be a wash or your items could get lost in the shuffle and not get the same attention they would get from a smaller house. There are definitely auction houses that will take these items without charging a sellers fee. At this price point I would confidently say you are not getting a portion of the buyer's premium so it really is a question of do you pay a seller's premium or not. Do you have a previous relationship with the AH? How much time do you think the auction houses will need to spend on your items? Do they require research? Authentication? Details on why they are important? With items of a smaller dollar amount, it simply may not be worth the time and effort for the AH especially if they have a steady stream of items coming in and can spend that time on higher dollar items instead.

[bnorth]

Bobby is correct on both posts depending on their fee.

This is my best advice I learned the hard way. You need to know exactly what one of their auctions your stuff will be listed in. I had a AH contact me about a set I was selling. I consigned it to them stupidly thinking it would be in their online auction. Nope they put it in their little rinky dink local live auction. I easily lost over $1000 because I didn't read the contract or ask exactly what one of their auctions it would be listed in. So when consigning be sure you know all the details.

[jh691626]

If it helps, they are all easy to post, PSA-slabbed items, like a Willie Mays or Duke Snider autograph on a baseball card. I'd say they are of medium interest--vintage players/cards, usually good players, likely to grow in value over time, but nothing like WOW.

[Leon]

Originally Posted by jh691626

If it helps, they are all easy to post, PSA-slabbed items, like a Willie Mays or Duke Snider autograph on a baseball card. I'd say they are of medium interest--vintage players/cards, usually good players, likely to grow in value over time, but nothing like WOW.

You should consider trying to sell them on the BST here first. No cost and no problem if they don't sell.... Be sure to vet your trading partners. You can always PM me or another moderator with questions.
.

[raulus]

There does seem to be a tale of two worlds around here:

1) for really nice stuff with high price tags that will drive a lot of traffic to the auction (think 6 or 7 figures or more), then I’m hearing from a lot of people around here that there is no cost to the seller, and you would probably even get a piece of the bidder’s premium, depending on just how nice it is. I’ve never consigned items this nice, so I’ve never gotten this deal. But on this board, many have asserted its existence, so I am inclined to believe that it exists.

2) for the stuff that you describe, the deal that you described is what I’m used to getting. You might be able to get a slightly better deal from another auction house by shopping around. My guess is that the BP is going to stay with the AH, and it’s just a question of how low the seller’s fee will be, even potentially as low as zero, although that might be a stretch.

I will also observe that you have a few auction options that are less expensive but might be less effective, depending on your perspective, to wit:

1) PWCC. They tend to be vilified around here based on some of their past scandals, which I won’t recount for you here, but my recollection from reading their terms is that they will give you a good chunk of the bidder’s premium. I will hasten to add that there is some question about how many bidders actually go to their weekly auctions. They also typically only accept slabbed items, or if they do take raw, it’s at a much higher fee level.

2) Use an eBay broker like Probstein. You usually end up paying around 10%, maybe slightly less, and large well-known brokers tend to get a lot of eyeballs on eBay.

3) Sell it yourself on eBay. You will pay about 10% to eBay, and might not get the attention that you’re hoping for, depending on whether or not your items go viral and/or get outed around here.

[sb1]

Ebay is going to cost well more than 10%, 13-14% for higher volume sellers, about 20% for casual sellers once they collect their fees and the payment fees. I have only sold a few hundred dollars on their in the last year and looked at my total sales/tax withheld/payout, etc and their take was 21.2%.

[raulus]

Originally Posted by sb1

Ebay is going to cost well more than 10%, 13-14% for higher volume sellers, about 20% for casual sellers once they collect their fees and the payment fees. I have only sold a few hundred dollars on their in the last year and looked at my total sales/tax withheld/payout, etc and their take was 21.2%.

Went back and double checked the rates. Looks like it’s 12.9% for the first $7.5K for any given item you sell on eBay. If the item is over $7.5K, then the percentage declines.

You’re right that PayPal or credit cards charges another 3%, give or take.

Depending on where the buyer lives, they do pay sales tax, although they are going to pay that on any platform or retail venue, except for maybe the BST here. Naturally, some states (like my home state) have zero sales tax. So it’s hard to figure it, although for some buyers it could be as much as 10%.

So more like 16% selling costs on eBay, all-in, ignoring sales tax, which could be nothing, or could be a lot.

[Leon]

Originally Posted by raulus

Went back and double checked the rates. Looks like it’s 12.9% for the first $7.5K for any given item you sell on eBay. If the item is over $7.5K, then the percentage declines.

You’re right that PayPal or credit cards charges another 3%, give or take.

Depending on where the buyer lives, they do pay sales tax, although they are going to pay that on any platform or retail venue, except for maybe the BST here. Naturally, some states (like my home state) have zero sales tax. So it’s hard to figure it, although for some buyers it could be as much as 10%.

So more like 16% selling costs on eBay, all-in, ignoring sales tax, which could be nothing, or could be a lot.

How do you go about ignoring sales tax? Count me in but that is always another 8.25% from me. That is a cost, like it or not, for most collectors.
.

[raulus]

Originally Posted by Leon

How do you go about ignoring sales tax? Count me in but that is always another 8.25% from me. That is a cost, like it or not, for most collectors.
.

For the seller, does it make a difference?

Plus, don't forget the vault! Seems like everyone has a vault these days, which is a nice end around sales tax.

[Leon]

Originally Posted by raulus

For the seller, does it make a difference?

Plus, don't forget the vault! Seems like everyone has a vault these days, which is a nice end around sales tax.

OF course it matters to the seller. It's a higher price to the buyer. Last I checked that counted in a deal.

.

[raulus]

Originally Posted by Leon

OF course it matters to the seller. It's a higher price to the buyer. Last I checked that counted in a deal.

.

Fair enough. Perhaps living in a zero sales tax state, I forget that from time to time.

Do you think that other buyers lower the amount they are willing to pay when bidding on items by factoring in the sales tax? I suppose it's certainly possible. But my suspicion is that many buyers don't factor it in. At the same time, I could be entirely wrong!

During the auction: "Bidding $100...that seems about right..."
At checkout: "Now I have to pay $108??!!! Plus an extra $10 for shipping!!!??? Stupid sales tax and shipping..."

And now that I've said that, I guess I've just introduced shipping as another cost to the buyer. Do you think that buyers also factor shipping into their calculus? Or does it get ignored, similar to my contention that sales tax is largely ignored?

[raulus]

Originally Posted by Leon

OF course it matters to the seller. It's a higher price to the buyer. Last I checked that counted in a deal.

.

I guess the other reason why I am inclined to ignore sales tax in this context is that when you're debating which AH to take your item to (the question from the OP), I'm pretty sure that all AHs charge sales tax these days. So taking it to one AH v. another isn't going to change the transaction costs when it comes to the sales tax.

[Leon]

Originally Posted by raulus

I guess the other reason why I am inclined to ignore sales tax in this context is that when you're debating which AH to take your item to (the question from the OP), I'm pretty sure that all AHs charge sales tax these days. So taking it to one AH v. another isn't going to change the transaction costs when it comes to the sales tax.

Again, incorrect. Not all AH's have to charge sales tax. But please keep on going .... I know at least a few of our advertisers that don't, unless you live in their state.
.

[raulus]

Originally Posted by Leon

Again, incorrect. Not all AH's have to charge sales tax. But please keep on going .... I know at least a few of our advertisers that don't, unless you live in their state.
.

I'm on a roll then!

I guess the OP should also look for AHs that don't charge sales tax, as that will be an added benefit. Not sure who they are, but it sounds like they are out there.

[teza11]

Just think about the potential power of this forum. "What if" AH consignors on this board pooled their upcoming consignments and let AH's bid on the opportunity to list. This could be done by type, group, time period, etc. Seller consignment fees would be a thing of the past. The discussion would move from seller fees to to seller credits. Just putting it out there. I know Leon is not looking to take this on.

Jeff

[raulus]

Originally Posted by raulus

I'm on a roll then!

I guess the OP should also look for AHs that don't charge sales tax, as that will be an added benefit. Not sure who they are, but it sounds like they are out there.

And while they are at it, consignors can also look at AH shipping costs, since our buyers are brilliant strategists who factor in sales tax and shipping costs when assessing the amount that they are willing to bid.

As with my earlier comments, I'm not convinced that many buyers really factor these costs in when they are bidding. But it sounds like you definitely do, Leon. And bully for you!

[Snapolit1]

For items worth a few hundred bucks, if you are not pairing them with a high ticket commission item, you might be better off just selling here or on eBay. It's the same amount of work for an auction to sell a $5,000 item as a $300 one in most cases. Unlikely to get a great deal on lower value items standing by themselves.\

If you had a 10k or 15k item, you might be able to negotiate a zero seller commission at some AHs.

Of course there are auction houses like Brockleman that never charge a seller's commission of any kind for anything.

[Rhotchkiss]

Auction Houses are for profit businesses (God Bless them). While some AHs may take a scrape on shipping, insurance and other "soft costs", the vast majority of their revenue is derived though fees. These fees are usually computed as a percentage of the hammer price. It doesn't really matter how its computed and to whom it applies, it ends up being something the buyer pays for and it reduces what the consignor puts in their pocket.

Traditionally, an AH will charge the consignor a Seller's fee -- a percentage of the hammer price -- and will charge a Buyer's Premium - a percentage added to the hammer price that the Buyer must pay to get the item they won. However, regardless of semantics, its all about how much the AH makes, paid for by the Buyer, and reducing what the consignor walks away from.

Two fundamental facts to acknowledge: (1) Since the consignor is the customer with the item, and since the AH makes no money unless it sells consignments, this is all negotiable. And, with most negotiations, he with the leverage has the advantage in negotiations. (2) in general, it is just as much work to list, sell, collect, ship, etc, a $500 card as it is a $50,000. This latter point is important because 10% on a $50k card is $5,000 vs 30% on a $500 card is only $150, but the work is similar while the reward is greatly disproportionate.

Ultimately, it comes down to how motivated is the AH to list a particular consignment; and motivation can be quantified in tangible terms -- how much money do I need to make to do the work here, and intangibly - are there indirect benefits to having certain items in an auction (such as a T206 Wagner, high grade 51 Mantle, or other items that create buzz and generate traffic to the auction). This motivation will of course vary by AH, and that's all part of the negotiation.

To address the OP's initial inquiry: I am not surprised that you are getting offers of a 7.5% - 10% seller's fee and none of the Buyer's premium, on a group of items valued at $100 - $500. Think about it. Suppose you have an item valued at $250; the hammer price would have to be about $200+ so that it sells for $250 with the 20% BP. If the AH takes a 10% seller's fee and a 20% BP, the AH is making $50 to sell this item. That's $50 to receive, list, describe, promote, sell, collect, and ship. Plus, there is customer service time and certain risks, such as someone is unhappy and bashes the AH on net54 or another forum. Whether $50 is worth all of this is the decision the AH must make. Whether the consignor is willing to walk with $200 on a card worth $250 is the a decision the consignor must make.

Anyway, my gut is that you can probably get the seller's fee reduced to less than 5% or eliminated entirely. But that will depend on leverage and motivation of the AH to get your consignment. And, fighting over 2.5%+ may not matter much, as getting 70% of a card that sells for $500 is almost the same as getting 80% of a card that sells for $450 ($10 difference).

[Ray Van]

Originally Posted by sb1

Ebay is going to cost well more than 10%, 13-14% for higher volume sellers, about 20% for casual sellers once they collect their fees and the payment fees. I have only sold a few hundred dollars on their in the last year and looked at my total sales/tax withheld/payout, etc and their take was 21.2%.

Agreed! I usually net around 80% of the final selling price on eBay once all fees are factored in. So 7.5-10% consignment fee at an AH is much better.

[bobbyw8469]

Originally Posted by Ray Van

Agreed! I usually net around 80% of the final selling price on eBay once all fees are factored in. So 7.5-10% consignment fee at an AH is much better.

Not necessarily though. Most all AH's charge AT LEAST 20%....and buyer's factory that into their bids.

[raulus]

Originally Posted by bobbyw8469

Not necessarily though. Most all AH's charge AT LEAST 20%....and buyer's factory that into their bids.

As we argued about a month or two ago, I think it largely comes down to a question of whether buyers really do reduce their bids to factor in the BP.

Naturally, there is diversity of opinion on this board.

I'm of the opinion that some buyers adjust their bids. But my read of the empirical evidence suggests that many do not. Simply because the vast majority of the bids I see at AHs don't make any sense once the juice is factored in. But perhaps I'm misinterpreting the data.

But if you assume that buyers do adjust their bids to factor in the juice, then clearly 20% BP + 7.5% seller cost is going to be higher than what you're paying on eBay. As Leon noted, you would also need to factor in sales tax, which can vary from AH to AH, although eBay is always going to charge it, unless you're shipping to a vault.

[oldjudge]

I think Leon is exactly right--put it in the BST. You can offer it slightly under market and still come out ahead versus paying 27-30% to an auction house. Don't forget to add in your shipping costs, cost of driving to the PO, etc. On low value items this will further reduce your net.

[Exhibitman]

There are enough auctioneers in various niches that you should never pay any commission. There is an auctioneer who will gladly take $100 items for the BP only.

While we are on the subject, gotta sing the praises of REA. I consigned a really rare Ruth card recently that needed to be graded. REA handled it for me, got it graded promptly, and it will be in the Fall auction. That's the way the pros do it!

Also gotta slap at Memory Lane. I consigned some boxing stuff to them in March. Not only haven't they sold it, but they have ghosted me when I've tried to follow up. I am a week or two away from sending out the Lawyer Demand Letter for the return of my consignment.

ETA: N54 rocks! A few hours after this post the ML rep called and will be returning my items tomorrow.

[jh691626]

Thank you so much to everyone for your amazing, thoughtful responses and a couple of PMs. I am likely going to go ahead with the AH with the 7.5% rate and see what happens, though have also put feelers out to one more.

I have posted some cards previously and currently to BST and agree that it is an awesome option--you can't beat the fees! And you get to interact with the awesome people of N54.

Thank you again! Jeff

[bobbyw8469]

Originally Posted by Exhibitman

There are enough auctioneers in various niches that you should never pay any commission. There is an auctioneer who will gladly take $100 items for the BP only.

While we are on the subject, gotta sing the praises of REA. I consigned a really rare Ruth card recently that needed to be graded. REA handled it for me, got it graded promptly, and it will be in the Fall auction. That's the way the pros do it!

Also gotta slap at Memory Lane. I consigned some boxing stuff to them in March. Not only haven't they sold it, but they have ghosted me when I've tried to follow up. I am a week or two away from sending out the Lawyer Demand Letter for the return of my consignment.

ETA: N54 rocks! A few hours after this post the ML rep called and will be returning my items tomorrow.

7 months is entirely too long to sit on a consignment. What was their excuse?

[babraham]

Originally Posted by Exhibitman

ETA: N54 rocks! A few hours after this post the ML rep called and will be returning my items tomorrow.

Dang!
Good stuff there, glad you're finally getting them back.

[Exhibitman]

Originally Posted by bobbyw8469

7 months is entirely too long to sit on a consignment. What was their excuse?

I really can't speak to that. Regardless, some of the consignment has gone up in value since then, so I am just dandy with selling it myself.

[Snowman]

Just send it to Probstein123