auction fees and the damage done
 

I really need to pay closer attention to how much I'm really committing to when I place a bid. I'm so used to just figuring it's going to be an extra 30% with Heritage that I ignored the fact that it's much higher for cheaper lots. I won a single T206 common last night with a $31 bid, but the total bill comes to $77.93. Oops.

SubTotal: $31.00
*Buyer's Premium: $29.00
**Service and Handling: $12.83
Sales Tax: $5.10
Invoice Total: $77.93

what auction house had a buyers premium of $29 on a $31 bid??? :eek:

right?????? a 90% buyers premium????

They get you with a “minimum $29” buyers premium…Sucks.

would u share the "house?"

It's Heritage Auctions.

More like 94% in this case

yup, I had my eye on a number of lots that have ended in the past couple weeks in the $30-range, but the $29 min BP + high-as-hell shipping charges (should be $5 to ship a $50 card, not $13) kept me away.

Buyer's premium is the biggest scam running. How have collectors not revolted against this archaic policy?

Here's a humorous explanation of why Buyer's Premiums exist...From an auction house of course. One I've never used and likely never will...

When attending an auction keep in mind that the buyer's premium is used to enhance the customer experience. The buyer's premium is charged so buyers are comfortable during the time of auctions and so the auction can operate efficiently. The extra charge is always put to good use.

It would not surprise me moving forward to see an increase in BP.

AHs are making more money this year, why not make more?

buy here

As a buyer you just factor Buyers Premium (BP) in to your maximum bid. So with 20% BP and $10 shipping and 6% sales tax, if you are willing to spend $140 max then your max bid will be around $100.

It is the consignor who should be upset with high BP, because on a $140 bill they are only seeing $100 (less if there are seller fees, and the cost of shipping the item to the AH + grading fees etc).

Adapting to the BP doesn't make the BP ok. What's the rational explanation for a $29 BP on a $31 auction win? Heritage likely made more on that sale than the consignor.

The consignor in this case was David Hall. You may be right about this particular card, but he'll be fine.

I assume this guy is rich? And your implication is that since rich people can afford exorbitant BPs and their impact on sale prices, they're not an issue?

I'd be fine with a minimum BP as long as the BP was reduced on the large purchases, say over 10K down to 15%.

HA has always, at least as long as I can remember, had a minimum buyers premium. I just wasn't aware they raised it from $14 to $29. At least HA does show the BP amount if you bid for the item on the item page.

Is the buyer's premiums for the auction stated in the consignment contract for any AH? Just thinking out loud, but if the AH raises the buyers the premium, the natural response to achieve the same total would be a lower bid amount resulting in less money to the consignor. How as a consignor would you feel in this situation?

and without a buyers premium, how would you suggest the AH make money for the service they provide?

They need 30+% of every sale to keep the lights on?

Nobody's getting rich at 20% gross margin before expenses.

It seems to me that HA is saying to the consigner: "We don't want to list anything that won't sell for $145 or more. We recommend letting us combine it with one or more similar items so that the probable hammer exceeds $145. Or, we will list it with a minimum $29 BP. Your call." I don't see the buyer's complaint, unless the bidding rules were unclear.

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do any other Auction Houses have this same high minimum and lower priced cards?

I messed up on that last night as well, after looking this morning. NOTE TO MYSELF, do not randomly bid while in bed half asleep. Once again, broke my golden rule to focus on one card per auction__WIN OR LOSE.

As a bidder, know what the premium is and factor it into your bid. The end.

I think some of you maybe didn't read my post. I'm not criticizing the auction house. I'm just offering my blunder as a cautionary tale.

The minimum BP should be commensurate with the the projected dollar value of the lots offered. Either offer lots to get the value to level up to where the minimum fee is reasonable or lower it.

It's like the old Teletrade. That system had a minimum commission. I remember I once netted a dollar on a lot of cards.

This I doubt. In today's virtual world, overhead and other costs aren't nearly the issue that they used to be. And there's also the "service and handling" that goes toward expenses.

So I'd guess that the big AHs are doing quite, quite well lately. Especially with as many auctions as they run (and how much the most valuable lots are worth nowadays). 20% of those numbers is an awful high figure to start out with.

I should have prefaced my comment to not include the big AH's like Heritage that auctions everything under the sun. My comment was more for the medium to smaller auction houses. I see how hard these guys work every auction, I also know that 20% margin before expenses in any business is pretty skinny, and they don't always make 20% on the premier offerings. There are AH owners on this sub smarter than me so maybe they can comment on the economics.

Regarding auction houses, don't forget the seller also pays a 10-20% fee for the AH to sell the item. Let's say for example an item sells for $100. The AH may get 25% from the buyer and 20% from the seller. Hmmm, high school math tells me that's about 45%. Also, they never owned the item but they did facilitate in getting the item sold; advertising, packaging, shipping, collecting the money, etc. etc.

Auction houses do provide a needed service in a lot of respects that a seller could never accomplish on their own. They also deserve to be compensated for what they provide. I would think the market would determine what type of commissions they receive, but I thought the same thing about grading companies.

Another thought regarding auction houses, don't think just because a large auction house is selling your item you will get a much higher price than selling it on your own. That's not necessarily true. I've sold a few items through an auction house, not a lot but a few. I was very pleased in that once I turned it in, I was done. Everything else was taken care of. I wasn't real thrilled with the prices they sold for.

Just imagine if a real estate agent received that kind of money from selling a house! Sign me up.

Ebay has 11,000 employees and can somehow turn a profit without a buyer's premium. Heritage has what? 500?

IF a seller is paying a fee at this point in the history of the world to an auction house that charges a BP, they're with the wrong auction house. No matter how many times we go through this, we have to go through it again apparently.

What are the right ones?

Good one Rob Attachment 519442

Here is just one but as he says they are countless.

https://www.net54baseball.com/showpo...8&postcount=22

I don't see any names in that post and I understand they may be countless but could you name maybe...two?

$29 minimum fee seems nuts...

I think it's absolutely wrong to charge tax on the premiums, fees, handling, and postage. Hell's Bells, the USPS doesn't charge tax on stamps!

$12.83 for handling and service? That's crap service, and they should have handled the card a lot less.


Maybe, instead of offering several common cards in one lot and getting one premium and one handling fee, they break them down into single card lots. That way the consigner maybe gets the same money, or close; and the auction house gets a pile of handling fee money. A bit like a gigolo, they service you and you pay for it.

Rea
 

REA and........ REA !

:)

Let's wait for Ken and Rob to tell us how much their auction houses are making.

Cause it doesn’t matter to the buyer, in the end the price is the price whether I’m paying BP or not and if the price is in the range I want to pay doesn’t make a difference. Cosignors on the other hand I can understand hating BP especially if there are commissions on top.

"Chriskim...Buyer's Premium Super Fan"

Heritage had 1/7th of Ebays revenue in 2021...1.4 Billion vs 10.4 Billion. But Ebay is 20+ times the size of Heritage. Feels like those numbers don't align to me.

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This is the fallacy collector's tell themselves to help them sleep at night.

I believe that some AH's give a small % of the BP back to favorite consignors for high value cards. Clearly, that is not the case here.

If there is a minimum buyers premium shouldnt there be a maximum buyers premium? Isn’t there a cap as to how much your buyer’s experience can be enhanced?

No fallacy at all. When I bid I set a limit as to what I will pay for each lot and bid to that level or less. The level is my total cost including buyers fees, tax, shipping, etc. I don’t care how you name the pieces, for my part you can call them auction house vacation fund, I just care about the aggregate number.

So how much should the OP have bid for the card in the first post if he was willing to shell out $3X to have the card added to his collection??

I'm not sure I understand your variable $3X here, but I'd have intentionally paid about $50 for this card. Knowing in retrospect that I didn't win anything else in the auction, and knowing now what the shipping/handling charges are, I should have put in a max bid of $4.90 for the card. I would have been outbid, but a winning bid of $4.90 would have given me an invoice total of $50.

Edited to add: In this case then I guess X would be 16.67 and my bid would be about $0.29X for a bill of $3X.

In case anyone is wondering, HA does provide details on how shipping and handling costs are calculated and offers an estimated shipping button that you can click near the bottom of every item listing.

I think it would be nice if going forward any auction house with minimum BPs put a footnote to that effect in cheap lot descriptions. Otherwise, it is better to skip the auction route and just buy that type of card on eBay or from a dealer.

Exactly. Call the final price what you will, so long as I know in advance how to calculate it. The fallacy is the guy who thinks he really would have/ should have won that card for $250 it it weren't for that nasty, unfair, hidden, undeserved and evil 20% BP that adds another $50. As if no one would have bid the card to $300 if there was no BP.

As for the minimum BP, that does suck but at least it was disclosed. It sends a clear message that the AH prefers to sell higher dollar items and encourages bidders to think about bidding on multiple items. Makes sense at some level, but it can be harsh to some, as we now see.

It would be nice to take this further and have a button that showed total cost, including tax, shipping, and BP at the bottom of each lot description. I know taxes vary, but once you are logged in the auction site knows who you are and can be programmed to individualize the quote.

This is some of the more comical corporate bull!@#$ I've read in awhile.

My only objection to a BP is when A) it's used to try and mask what you're really paying and B) when the auction house lies that it is about anything except jacking their profit margin. There is nothing wrong with making more money if you can get people to pay it, but don't straight up lie that it's for my "comfort" during an online auction.

The grand total would be nice to see in one place and I like the idea of calculating the tax. The only issue I could see is winning multiple lots combining shipping in that case, but if you gave the total for that one lot knowing combined shipping would cost less, that would be a great start.

I really don't care to defend HA, when bidding on an item on the item page they do show you the amount with buyers premium, they give you the option to calculate shipping, and you should know your tax rate. Nothing on the cost for them should come as a surprise. That said, I wish all auction houses at least provided that all that info.

For at least the 1000th time on this site, the premium and what you call it are meaningless. I am willing to spend, say, $120 for a card, plus tax and shipping. If it's ebay, where ebay makes its cut from charging the seller a portion of the hammer price, I'll bid $120. If it's an auction house with a 20 percent "buyer's premium," I'll bid $100 and pay $120. It's the same thing. Rob has been fighting this for years, but never explains why, just rants and raves about buyer's premiums as if the buyer is being forced to pay more by the greedy auction house. He isn't. It's purely a matter of allocation between the auction house and the consignor.

The premium could be 30 percent, or 50 percent, or 90 percent. I don't care at all. The consignor is the one who should care, because they're only getting the hammer price.

If someone bidding in an auction in this day and age is so out of it that they don't realize a BP is going to be added to their bid, well, that's their funeral.

Does Heritage charge a minimum BP of $29 per item…or…if a bidder wins multiple lots, is the total BP a minimum of $29?

It is per lot. If you don't want to pay more than $30, don't bid more than $1. No combined BP.

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It’s in the terms of the auctions rules at any you go, it isn’t complicated

Peter, you know the definition of insanity…. Just let it go, life is too short!!

Same economics is the reason you pay more per ounce for 8 oz of peanut butter compared to 32 oz of peanut butter.

I do not understand why so many people have a hard time figuring out all of the fees. Unless the fees are not disclosed, then I have no idea why anyone complains. If you do not like their rules, then do not use that company. Simple as that.

Get in the habit of reading the rules each auction house publishes. It will tell you all you need to know about BPs, whether the auction house can bid on items themselves (many can!), minimum BP amounts, extra shipping costs for large items, etc.

If you don't do this, buyer beware. And it's your own fault if you mess up. Telling Heritage how to run their business is a joke.

jeff

I'm impressed by all the collectors here who have never spent one penny over their "Max" due to the Buyer's Premium....and their very tiny collections.

It's America...Everyone has the right to defend the people that take their money.

I'm sure those people also defend Jeff Bezos, Donald Trump, Stan Kroenke, Comcast, ExxonMobil and stadium beer prices, etc, etc, etc.

I hear buyer's premiums are much lower in Venezuela.

Buy Canadian, the exchange rate is about the same as the vig.

I own an auction house and that's the weirdest, lamest explanation of BP I've ever heard.

BP was implemented by Christies and Sotheby's in the art world (some debate about who was first) to give them a competitive advantage in securing consignments by offering lower seller commissions. It's literally a shell game the same money is coming from somewhere, and ultimately should make no difference in what a consignor is paid or what a buyer pays. That being said, since it's become the industry norm it would be tough to just put the entire percentage you collect back on the seller as it had been previously, hence the proliferation.

We state the BP in our consignor contracts.

thank you!

It would be nice next time I ordered a steak at a fancy restaurant if there was a button I could push that told me how much it REALLY costs. Price on the menu is bullshit. There is a tip and tax. Sometimes even a tip for the valet parking guy. How these guy get away with such highway robbery is beyond me. Price on the menu don't mean anything.

Our average Gross margin is 28% that's BP and commission (which isn't fixed) combined. I'm not starving, but I'm not driving a Ferrari either.

That 28% -

has to cover rent and utilities, salaries, advertising, the auction software costs, travel and show fees, etc.

Yes if your average sale is making millions 28% is killing it. In another thread someone mentioned Real Estate Agents and Car Dealers as companies that operate on thinner margins, but what is their average transaction? Our average transaction is a little over $100 and that $30 we get out of that has to go a long way in a lot of directions!

If you think BPs are high in the states then try doing business overseas. The record auctions I participate in commonly run anywhere from 27-30%!

A good friend of mine works in the high end art business. He says if there is one AH to steer clear of, it’s Heritage.

Personally, I wouldn’t pay out of principal alone.

REA, as much as I love them, quoted me a seller's consignment fee. Therefore, I took my almost $10,000 card elsewhere.

What principal? That you didn't read the terms or observe what the fees would be when they are shown or easily figured out? The OP in this case isn't making any excuses and realizes he got complacent in the way he estimated the costs.

The principal that an auction house shouldn't have policies that discourage bidding?

Then simply don't bid in the first place. If your placing a bid than you are agreeing to the terms even if you don't like them. Don't wait until you win to say you disagree with what you are going to be charged.

And the price is still higher when it ships than when you bid... gotta love that crazy inflation.

I paid, and await. No biggie to me, just a reminder why I should not be bidding half asleep in bed. Greg Morris on Ebay is doing a fine job with their auctions, and REA has been 100 percent professional since I started purchasing from them as well.

But Heritage no longer gets your business, correct?

The simplest thing would be to take the % out of the overall sale price, like eBay, but then that % of people who either miss the BP or cannot do the math to factor it into their bids would not overbid. Multiply that by thousands of bidders a year and the advantage to the house is apparent.

FWIW, I bid on some cheap HA lots tonight and the system noted the $29 BP on the bidding page, so no mystery there.