Mastro has raised Buyer Premium to 20%

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Posted By: Steve M.

Ouch!!!

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Posted By: RayB

for me. The Buyers premium at 15% alway kept me away from the Big Box Auction houses anyway. The prices are inflated to begin with, even on most items that are more mainstream and to tack on the Buyers Premium makes it unreasonable to even consider participating.
I'm just small fry I guess with my humble low grade T-206 effort.
The catalogs are fun to look at though!
RayB

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Posted By: Steve M.

but make sure that you place some bids to insure getting the catalogue. Make them early and you are sure to be outbid.

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Posted By: Josh Adams

When you're the biggest, I guess you can do what you want!

There are other auction houses with similar material, and lesser premiums. 20% seems a little excessive.

Go Go White Sox
2005 World Series Champions!

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Posted By: Tom Boblitt

of more pressure to get quality lots. They are dropping consignment fees more to get more stuff in I bet and consequently having to make up on it on the sell side. Those door-stop catalogs aren't cheap......

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Posted By: Jeff Prizner

As a Consignor in their current auction, this really pisses me off. Had I known about the 20%, I would have gone with REA.

They could have just as easily announced this raise before taking consignments - shady!

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Posted By: warshawlaw

As a consignor. Sorry guys, but next time if you want my stuff the commission on my end will have to be lowered correspondingly.

About the only "benefit" is that it is a lot easier to calculate a straight 20% in your head.

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Posted By: Wesley

As a consignor in the current auction, I am a little peeved as well. Like Jeff, if I had known about this in advance, I would certainly have chosen REA instead.

The higher buyer premiums will affect the decision of consignors more than that of buyers. Buyers can just factor in the final price into their bids, whereas consignors have more money taken out of the bottom line.

This is a good opportunity for other auction houses to pick up more consignments.

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Posted By: leon

If you posted in the other thread you can cut and paste back over to this one...here is my initial thought....

As always I will figure the buyers premium into the bid that I make. My real question is will this prohibit them from getting more material in the future? As a consignor I would have to think leaving at least 20% on the table is something that has to be considered. With that being said I do know that other auction houses are close to those fees.... 19.5% for Heritage.....and others are within a few percent too.....

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Posted By: Hal Lewis

I am also a consignor and also would have liked to know this BEFORE making my decision.

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Posted By: Joe_G.

This may promote more sales directly between sellers and buyers. The middle man's cut seems awful substantial. Assuming a 15% consigners fee + a 20% buyers fee, let's work through an example of a $1000 hammer price.

Consignor/Seller receives $850
Buyer pays $1200
So Auction House keeps $350

The auction house receives over 40% of what the consignor/seller receives (350/850 = 41.2%). Just seems excessive even after factoring in the auction houses expenses.

Will I still bid, yes, will this factor into my bidding, yes. Aren't most auction houses still closer to 10-15% buyer fee?

Best Regards,
Joe Gonsowski

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Posted By: Dave

only way to stop this is put 'em somewhere else to sell, or stick them on the bay for 6% of your price going to a "auction house"

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Posted By: Tom Boblitt

near the 15% on the consigning side. I'd be curious what the total average Fee is. I bet overall it'd be in the mid to upper single digits. Just my opinion.......

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Posted By: Al C.risafulli

For me to bid in an auction with a 20% buyer's fee, a card would have to fill one hell of a hole in my want list.

-Al

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Posted By: Wesley

Mastro could have just as easily have announced this raise before taking consignments. To spring this surprise on all the December consignors the day the auction preview goes up is not a straightforward way of doing business.

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Posted By: steve f

Good point, The ol' classic bait n switch ehh Wes?

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Posted By: warshawlaw

I've said it before and it bears repetition now: NEGOTIATE!!!! A consignment fee is an agreed figure. With the number of qualified auction houses out there, NO ONE leaves 35% on the table unless they are ignorant. I'd venture an educated guess that the average consignor pays Mastro 10% as a commission and that someone with a very significant item will pay 0%-5%.

Coincidentally, I had a related discussion yesterday (I was really sick on Friday and ended up in the hospital ER that evening with respitratory problems, so mortality came up as a discussion at home; feeling much better now and back to work after a weekend resting). I told my wife that if I was to die unexpectedly, she is to call some auctioneers I named and "auction" the right to liquidate my collection among them, and I told her not to pay any commission on the seller's side.

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Posted By: Griffin's

Sure makes REA look even better for consigning items. Even if you negotiate your selling commission down to 0% it does effect how the bidders go after that item.
Shipping fees were jacked way up earlier this year, now buyers penalty. What next? Online bidding fee, catalog fee? Starting to sound like a bank.

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Posted By: Brent Butcher

Leon mentioned Heritage at 19.5% - the big differences between Heritage and Mastro is Heritage lets you use credit cards to pay. I don't think Mastro offers this even with the increased premium. Also, Heritage will hold the cards for 6 months I believe while you pay them off(pre-qualified bidders only.)

I haven't taken advantage of either of these options but I'm sure that's a huge benefit to some.

With the increased buyer's premium Mastro could afford these same options and I would think the end result would help the sellers.

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Posted By: Jeff Lichtman

Griffin's point is well-taken: negotiate your consignment fee down to zero and you're still stuck with the fact that your final take will be lower due to buyers being scared off by a 20% fee. It's foolish in my eyes to raise it above any other auction house's fee because Mastro will stand out as the greediest - not that they aren't already with their fee simply to get their book. I have a card worth $20,000 that I'm about to send to one of the big houses and I can tell you that Mastro will not get a call.

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Posted By: barrysloate

I think one way to look at the buyer's premium is to simply say if a lot is worth $1000 to me, my top bid will be $800. Isn't that the same as bidding $850 in a 15% auction? I think one of the reasons buyer's premiums are going up (besides the obvious profit margin) is that auction houses want to be able to offer selling fees as close to 0% as possible. That makes them look more competitive. Nobody likes to see these premiums go up but it is clearly a trend.

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Posted By: Jeff Lichtman

Barry, this is true, but by offering closer to 0% on consignment fees and increasing the buyer's premium, they are just keeping their take even while reducing final take of the seller and increasing the final cost to the buyer. Yet Mastro is hardly advertising a lowering of consignment fees. As a seller, does anyone really think that Mastro generates higher final bids than say Memory Lane, Mile High or REA to make it worth it to place anything with them?

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Posted By: barrysloate

I think if a seller has a really good collection he can pretty much dictate his own selling fees. Would Macy's turn down a zero percent fee if they knew the collection would end up with Gimbel's? (I know Gimbel's is defunct, it's just an expression).

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Posted By: Jeff Lichtman

Well, what if REA, Mile High and Mastro gave you the same consignment deal? Wouldn't you go with the place that had the lowest BP in order to get the highest bids?

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Posted By: JimB

It's all just number shuffling. Buyers should figure the BP into their bids and consigners should try to negotiate the best consignment terms they can for their item. No big deal. If I had consigned something under the presumption of a 17.5% BP, I would call and straighten it out.
JimB

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Posted By: barrysloate

I think over time collectors build a rapport with a particular auction house and when it is time to sell they tend to gravitate that way. I don't think any of the major auction houses has a magic list of bidders that the others don't. You consign with whom you feel most comfortable with, and in this competitive market if you have a substantial collection you can negotiate favorable terms.

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Posted By: David Vargha

Chalk up another thoughtful move by the head of Customer Care at Mastro, Benjamin Dover.

DavidVargha@hotmail.com

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Posted By: Jason L

I will pay absolutely no one that much money for the pleasure of buying something...that implies that you think the item is at least 20% undervalued...and in this market, nothing is that much of a bargain...pure silliness

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Posted By: Griffin's

has anyone ever been able to negotiate down the buyers premium? The sellers has always been done, but never the buyers.

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Posted By: Wesley

The contract says "a Buyer's premium of no less than 15%."

Does anyone know whether the consignment contracts always said "a Buyer's premium of no less than 15%"?

Or was a special contract only recently drawn up for the December consignors?

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Posted By: Steve M.

I think it would be more helpful to have a contract provision that states "no buyers premium "higher" than 15%".

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Posted By: Wesley

That would be great, Steve. It would also be more straightforward. But that would only be more helpful for consignors, but not more helpful to Mastro.

The way it is currently written, Mastro can actually raise the buyer fees to 20% or 25% or 30%. I am assuming that was the reason why it was left open-ended.

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Posted By: Judge Dred (Fred)

There are a few things to consider when you look to bid in an auction.

Do you have to pay local sales tax? That tacks on a good 6%+ on the total. What is the return policy of the auction house. Some houses will tell you "NO RETURNS?". The buyers premium is only one thing that people should be looking at when they are biddin in an auction. What about people that use the ebay portal. Sometimes they tack on another 5% to bid via ebay.

I would be willing to bet that some of the auction houses would be very negotiable with the sellers premium if the item(s) for sale were going to generate a lot of publicity and/or frenzied bidding. Mastro indicates "15%, period". Something tells me that period could be negotiable.

The following is a list of auction houses with Buyers Premium / Sellers Premium as stated on their web sites. A "?" indicates that I couldn't find the amount on the web site.

Lelands 15% / Negotiable
Lipset 10% / 10%
Sloate 15% / ?
19th Century Only 15% / ?
Mastro 20% / 15% - period
Hunt 15% / ?
Collectible Classics 15% / ?
REA 16% / ?
Goodwing 17.5% / ?
Clean Sweep ? / 10% if > $500, 15% if < $500
Huggins and Scott 15% / ?
Memory Lane 15% / 10% - negotiable

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Posted By: Griffin's

Goodwin is 0% on the seller.

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Posted By: Anonymous

Copied from Auctionreport.com

http://www.auctionreport.com/auctionfees.htm

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Posted By: Mike

Goodwin also takes credit cards, so 2-3% is also going to pay those fees.

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Posted By: leon

I just had a brief conversation with Doug Allen. We all assumed correctly why the increase was done. The consignor fees aren't what they used to be and it takes a certain amount of money to pay for the service Mastro gives. With that being said he does agree the timing was possibly not perfect, and we're not sure there is a perfect time. As I spoke with him I understand now that there was precedence of this kind of situation, timing and all, of other auction houses raising their BP. I am not saying that because someone else did something then it's necessarily right to do it too. I am saying they aren't the first to do it this way, from what I understand. I also will say personally that I don't think the timing was perfect either. If any consignor would like to speak with Doug about the situation he asked to give his cell # a call 630-336-6650. He can also be reached at the dallen@mastroauctions.com email address. best regards

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Posted By: TONY

I See some mentioned Heritage auctions of dallas, TX
If memory serves me correct, Steve Ivy one of the owners was the first person to starting charging a buyers fee.....
I believe it was only 5% at the time but of course, like the cost of a postage stamp that figure kept creeping up, to the ridiculous amount it is today.....
Maybe someone one day will charge 50% fee to consign & a 50% fee to the buyer.......that way the auction houses can keep ALL the $$$$.........maybe then they will be happy

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Posted By: Jeff Lichtman

Hey Leon -- what's the opposite of "perfect timing?"

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Posted By: Jeff Prizner

perfect timing would have been right BEFORE taking consignments for this auction.

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Posted By: Jeff Lichtman

Obviously the right thing to do is to refund every consignor the 5% that Mastro increased the BP - assuming the consignors weren't told of this change.

Doug Allen indicated that the reason for the increase is due to the following: "This will ensure that we do not have to compromise in any way, with respect to conducting our auctions in the industry's most thorough, professional and efficient manner. ... We constantly apply this top-tier approach to every aspect of our business ... in the most painstaking authentication and cataloging process in the business."

Hmmm. I guess Mastro didn't apply that "top-tier approach" when reviewing Scott's hat. Do you think possibly that the raise in BP had more to do with Mastro "ensuring that [they] do not have to compromise in any way" the income of its owners? Does anyone else read these excuses and not roll around laughing on the ground?

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Posted By: warshawlaw

But I'm not finding it very amusing to learn that I've just left another 2.5% on the table...

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Posted By: Anonymous

I was laughing pretty hard at that one too Jeff.

...also agree with the consignors feeling like they got hood-winked...
...but hey...all that flowery gobbly-gook language used to describe your item has to be worth something (if not priceless and/or inaccurate).

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Posted By: Colt McClelland

Anyone who consigned to this Mastro auction should pick up the phone and demand that Mastro reduce their seller's premium by the amount of the change in the buyer's premium. In fact, Mastro should have done this as a matter of course in advance in my opinion. The bottom line is this - add up your seller's premium and the buyer's premium and that is the "hit" that you are taking as a consignor. Mastro can call this an increase to the buyer's premium, but just like Leon points out a seasoned bidder is going to factor that into his bid. Thus, it's really coming out of the consignor's pocket at the end of the day. I've never been a fan of Mastro from a consignor's standpoint, and the way this was handled just enforces my opinion.

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Posted By: Dan Bretta

I'm not sure why you guys are complaining about the 5% left on the table before the auction is even underway. With that said I personally would rather consign my items to an auction house that is open to more bidders than Mastro's Premier auctions. And just taking a look at some of the opening bids on some of the items I think that's going to scare off even more bidders.

$1500 opening bid on a photo of Walter Johnson shaking hands with Christy Mathewson???

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Posted By: Anonymous

Colt,
Why would they refund anyone 5% they only raised the fees from 17.5 to 20% which is 2.5%. did not see the edit

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Posted By: Judge Dred (Fred)

REA = 16% BP
Goodwin = 17.5% BP
Mastro = 20% BP

Most others are 15% BP.

Lew Lipset seems to be the auction house with the least amount not going to the house. Lew is at 20% total for the BP + SP.

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Posted By: cmoking

Goodwin is 0% Seller's Premium + 17.5% Buyer's Premium. For a total of 17.5%. That also includes no haggling, no hassles, and no problems - at least based on my experience.

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Posted By: Jeff Lichtman

King, how can Goodwin manage then to "ensure that they do not have to compromise in any way, with respect to conducting their auctions in the industry's most thorough, professional and efficient manner"? It must be "painstaking."

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Posted By: leon

Sometimes when you are doing something to make extra money it's good say you are doing it to make some extra money......The rest of it is justification, or not, but the reason stays the same.