It's obvious you're full of seething rage Leon. Try to calm down a bit, OK? :)

Why so much sarcasm? If you feel the buyer's premium is unjust, you don't have to bid in the auction. Stick to ebay. Or bid w/AHs and take the BP into consideration. :)

I don't see hot and instant anger as much as the amazement that you can't comprehend a simple matter more cogently. You are griping about a rule that is plainly stated and questioning it's validity? If you don't like the rules don't bid. If it is clearly stated it is in fact correct. AH's make their rules you don't. Not sure why you are so obstinate about an easy issue. You can gripe all you want to, the rules won't change. And yes, for their respective auctions, they are "right."

Leon, while I believe Rob is coming across as complaining about paying the buyer's premiums, I think the real root of his question is why do auction houses charge a buyers premium and no sellers fee instead of charging a seller's fee and no buyer's premium. Responses such as "It doesn't matter" or it is just "semantics" address how to think about the buyer's premium from the buyer's prospective, those responses don't really give a reason or explanation for why every auction house charges a buyers premium.

Personally, I think the why is answered in the marketing strategy of the auction house to the consignor and trying to make the AH look as attractive as possible from a consignor's prospective. Charging a seller's fee when other auction houses don't I think would make getting consignments even more difficult, but I could easily be wrong. Leon, not to single you out, but you and Scott had one of the lowest BP and zero seller's fees, did you guys ever discuss lowering the BP even lower and charging a seller's fee instead? What was the driving forces in determining how you collected your commission?

Here are the facts of the matter:


Without consignments there will be no auction. It is much easier to get consignments for free than charging the seller to use your AH platform. The sports collectible auctions have all gone this route and don't expect them to change it anytime soon.

Without making a profit the auction house will not continue to exist. SO...
The buyers are the path of least resistance, they see something they want and are willing to pay for the right to bid and win it. As most have indicated you just have to factor in the percentage of the bp on top of your bid and you have your total cost for the item.

Other less competitive genre's still charge a buyers and sellers premium, because... wait for it... there are very few options for a seller to auction material and/or the huge costs of presenting the items for sale. So the number of additional AH's has actually lowered the overall cost of the transaction. All of these vary from genre to genre. Many more upscale antiquities, paintings, etc, garner a 20-25% seller and buyer fee(think Christies, Sotheby's, etc), as the venue's for these are farer and fewer between, if they had more competition the rates on both sides of the equation would have to give somewhat. Even Mecum and Barrett-Jackson charge sellers and buyers premium, but they are more flexible and even change at the hammer to make a deal for the house, the buyer and the seller come together.

Scott

If an AH had a 10 percent seller's fee and no buyer's premium, my guess is they would do just fine getting consignments.

Peter,

I think it would be an uphill battle for anyone trying to go that route at this point in time.

The buyer is the end consumer and would be happy to pay no fee, but the consignor/seller would not be so willing to pay 10% off the top when he could call the next guy and pay nothing. So again no consignments, no auction. It would take the majority of AH's making this change all at once to make this even plausible, and then one gets short of material and they are back to offering Zero consignor fees. Today's setup is just free market working it's way in the sports AH world.

I might add that the only way you would be able to garner more seller interest in having a consignor fee would be the premise of a bigger payout due to the AH being able to get more money for the client, which is where many/most of the problems of the AH's began with trying to get higher prices than their competitors, which in fact were not always legit sales/bids as we now know.

I don't get it. Any knowledgeable consignor would realize he is going to do better with (using my example) the AH getting a total of 10 percent of the take than with the AH getting 20, regardless of the semantics. It's just the flip side of the buyer's calculus. Even with no seller's fee the consignor isn't paying nothing, he is paying in the form of a reduced hammer price due to BP.

You are correct with the math, but people are not as comfortable with change as a whole and very resistant when they perceive that they are the one paying the tab. It's all psychological for most of them.

I agree, if you told me I got 90% of the take instead of 80% in the end, A. is the better option.

I would add that the larger houses would probably need much more than 10% for their cut to make it work out with larger overhead and that throws a wrench in the works and now you are back to 15-18%(minimally) for a sellers fee and the consignors just won't go for it.

As you know I charge 12 1/2% bp and no sellers fee. My biggest point to consignors is that they are netting 87 1/2% of each item(hammer+bp), which is more dollar in their pocket versus AH that charge 15-23%.

Then if you are right why are people consigning in droves to PWCC, where the fee clearly comes directly out of the sales price? After all they could go to an AH for free.

Exactly Scott. What matters is the AH's total take. You are making my point, I think.

Some of them are much more ebay users and not even aware of most AH's, PWCC has done a great job of marketing themselves to that niche of clients, so they are more comfortable with the venue. I would say the ebay world and AH world are largely two different groups, both when buying and selling.

Peter, you are absolutely right it should not make a difference as long as the auction house is making the same commission and the consignor is getting the same amount. However, that is assuming everyone is rational, which is definitely not the case and where psychology plays a big role. As an example, when you shop online, which do you buy, an item for $10 with free shipping, or the same item for $8 and $2 shipping? Both are the same item, both cost you the same, but more people will choose the $10 with free shipping cause the price structure is simpler to understand and people are drawn to the word "free" (who doesn't like free stuff?). Obviously if the commission is not the same or the consignor is not getting the same amount, then one option is definitely better.

DJ

Precisely, it's all in the eye of ones perception. You can lay out several scenarios of your choosing with the same outcome, and people's choices of a, b, or c. will be greatly varied as to how to get there, even though it's the same ending.

My guess would be that those worlds are not so dramatically separate any more.

Who says the rules won't change? Maybe you hope they won't but that's not the kind of forward thinking that's made this country great. Just because it's the way it is doesn't mean it's the best way. Everything evolves except auction houses I guess. Those haven't changed since ancient Rome I hear. But I suspect they have a date with destiny. The next generation of collectors won't be as eager to fork over money for nothing as this older generation is.

And for the record...as it's been skewed here...My argument all along is that the buyer should'n't have to foot the bill for a service being provided to the seller. Not that the auction houses are wrong for charging fees.

PS...Save the suppressed bidding argument. That's only a piece...not the whole.

why do some people choose to consign with an eBay seller instead of an auction house? Could it be because it’s easier on eBay to bid on your own consignment (or a friend’s consignment) and buy it back with no fee? Or because it is easier to retract your bid (for a variety of reasons) on ebay?I bet some — not all — find that very appealing.

Bingo...What do you know. Finally, somebody gets it.

And without buyers there would be no auction. So that argument is kind of moot.

This is one of the few honest responses in this thread. The buyer is the path of least resistance. No talk of semantics or it "all being the same in the end". It is what it is. A fee the buyer has to add on....because historically they've been conditioned to.

I'd be curious to see a comparison of sale prices for similar items sold with and without buyer's premium. I'd be willing to bet the difference in most instances is the buyer's premium...and that bidding was not surpressed to the point of equilibrium.

Why? It's all the same money isn't it? Isn't the seller going to be ecstatic to know that his bids won't be suppressed? If there's no 10% BP, that means the seller will realize 10% higher bids!

Don't believe me? Just read this thread.

If you believe a card is worth $1,000 and are willing to pay $1,000, how is the buyer "footing the bill" when the buyer is still only willing to spend the same amount?

The only way that argument makes sense is if the buyer is completely oblivious of the 20 percent until after the auction is over. Anyone other than a total newbie realizes there is a 20 percent fee and adjusts their bid accordingly so that it will not surpass the maximum amount they are willing to spend.

Although I gave up active collecting 5-10 years ago, when I did consign with an auction house (always with 15-20% buyer's premium) I ALWAYS. ALWAYS. ALWAYS got more with the AH than ebay. There are many well funded collectors who just refuse to go the ebay route.

Check some PWCC prices and get back to us.

Just personal experience. And PWCC as a whole is another story for another day.

Why bother lol. DNFTT.

Whatever the story was years ago I think for many cards that sell frequently in both venues ebay prices are quite competitive. And if people are paying more to AHs it's not because they are hoodwinked by the BPs it's because for whatever reason they prefer the venue.

Think about it.
 

Winning a card at an auction is like winning a horse race. You pay the "juice".
With sports betting the loser pays the "juice".

Maybe, but they'd go out of business!

You're example applies to card collectors. And I can see how it works for them because they know, if they don't get this one...they'll get another shot at it in a month or two. So you can wait to get it at your price. You also have a wealth of previous sales to help you determine what your max price is.

I collect pennants. What I'm looking for comes around once every 10 years if I'm lucky. It's hard to place a price on something that comes along only once every 10 years...so I can't go in saying this pennant is worth $1000, not one penny more...unless I'm also willing to say "Ok...I'm never going to own it because it's probably not coming around again."

So your logic doesn't apply to everyone...Collector's of things more rare than a $1000 card don't have that luxury....and even if they did, it doesn't explain why the buyer should pay for the service provided to the seller.

This is a complete non sequitur. The fact that you don't have reliable price information for pennants has nothing whatsoever to do with the buyer's premium issue. In the end you are bidding what you decide to bid, and it makes no difference how the auction calculates its fee. You aren't "footing the bill." You are bidding what you decide to bid. The consignor is footing the bill because he is only getting a percentage of the sum you pay the AH and the AH is keeping a share. If you pay 120, the consignor gets 100. How on earth are YOU footing that bill? Good luck in your search.

The consignor is getting 100% of the bid...and I'm paying 20% for his right to do so.

Do you want me to send you a dictionary so you can look up the word bid?

Let's see if one other person here agrees with you, Rob, shall we? Not that that would matter since you're the smartest guy on the board, obviously. :cool:

When I choose to bid on a card, pennant, whatever that any given auction house has up for bids, I make the choice to bid. It is up to me to read the rules---including what fees I may or may not have to pay if I win. If I object to a buyer's premium, I don't place any bids. If I choose to participate, I have a certain amount I am willing to spend. I don't care what percentage is going to a consignor, the auction house, or whomever...I am hoping that my amount is enough to win the card, pennant, or whatever.

Rob, what you said may be technically correct, however, when I bid in an auction, I consider my bids to include whatever BP, if any, applies; I assume most collectors would agree with me.

I agree with what you say...I'm sure many do that. But it's because you've been conditioned to do so. That says nothing about why it should be that way.

Tell you what...If one person here can direct me to an auction house that touts their "20% lower than market value winning bids", I'll never speak of the buyer's premium again.

A card (or pennant or slab with a pretty flip etc) with a market value of $1000 is up for auction.

Option 1) 0% buyer premium, 10% seller fee. Top bidder bids $1000. Top bidder pays $1k, auction house gets $100 and seller gets $900.

Option 2) 11.11% buyer premium, 0% seller fee. Top bidder bids $900. Top bidder pays $900 + [buyer premium of $900 x 11.11%] = $1k, auction house gets $100 and seller gets $900

Six in one, half dozen the other.

It's no use. Example after example is lost on this dude. He is honed in on the word BID, and his response will be that in your second example the BID was less and the buyer, not seller, had to "foot the bill" for the AH, whatever that means. I think we should all stop feeding this idiocy.

"I think we should all stop feeding this idiocy."

BINGO!

You left out an option.

Option 3) Card still sells for $1,000 and the buyer has to pay an extra $111.10 and the seller gets $1,000.

The notion that every winning bid has been deflated by the value of the BP is ludicrous.

This thread has become ludicrous. This, on the other hand, is Ludacris.
Carry on...

Rob, in your example (option 3), the buyer now pays $1,111.10 total, not $1000. All you did was add an extra $100 in bids to option 2. So why if a bidder has $1000 to spend (options 1 & 2) would they not factor in ANY additional charges (buyers premium/shipping/service charges/handling/etc) and why would they place that extra $100 bid? If your answer is cause they did not count on the additional fees, please explain how the auction house is responsible for the buyer not reading the terms and conditions prior to bidding.

I don't mean to speak for Rob (nor could I), but I think his whole argument is based on the premise that there are a lot of dumb dudes in the hobby who bid irrationally and erroneously because they don't understand rules/math; and ironically, the more I read his posts, the more I think this premise might be accurate.

I know there are a lot of stupid people out there, but what percentage of people do you really think dont take the buyer's premium into account when making a bid? Maybe they do it once, then realize when they get the bill. Unless guys are knocking back a few beers waiting for extended bidding to end, I dont see your example coming into play often.

Almost every card I couldn't sell here or privately, as well as those I didn't bother trying with, have gone to PWCC. Lower fees, high prices, and they run an auction every month. I dont understand why anyone wouldn't want to use them. Unless you're selling more obscure cards that will benefit from a write up and an auction catalog.

Exactly. It could not be any more straight-forward. I do not understand the confusion.

That's exactly right. The notion that everyone adheres to the X minus 20% bidding approach is comical. And the notion that bidding is suppressed by the value of the BP is even more comical. I spent 10 minutes comparing sale prices at Heritage to Ebay and on my first try Heritage was...I kid you not...20% higher for the same PSA 5 1953 Mantle card.

These defenders of the BP are living in an illusion.

OK, lets take your premise that the BP doesn't suppress the bidding and follow the logic. Why is that a bad thing for the auction house or the consignor? The auction house is in business to make money and the consignor wants to get as much as they can. Neither are responsible for the actions of a buyer. If the buyer overpays, both the consignor and auction house make more money. The buyer knows the rules before they place a bid and they choose to bid or not. The buyer is not forced to bid. If the buyer can get the same item cheaper on Ebay or wherever, then what is their motivation to bid in the auction? All the auction houses I've seen make the buyer's premium clear in the rules and usually include an example demonstrating how the fee works in connection with the bid. If some one is willing to voluntarily bid without reading the rules of the auction then that is their fault and no one else. It is not the consignor's or AH's job to protect people from themselves. Buyers need to be responsible for themselves.

Now Scott has very clearly outlined the history and reasons why the AH keep the seller's fee at 0%. So if it not the AH's job to stop people from bidding, and both the AH and consignor benefit from the masses of people who don't read the rules, how does changing to a 0% buyer's premium benefit the AH or the consignor?

In addition, I can't speak for others, but personally, I buy almost all the items I sell on Ebay from AH. How am I able to make money doing so if the AH with their 20% buyer's premium is more expensive and I'm also paying over 10% in Ebay fees when I sell the item?

..

The Magic 8 Ball Auction House
 

No buyer's premium
No consignment fees.

Attachment 317280