Heritage Buyers Premium
 

It appears that Heritage has increased their buyers premium from 20-22%. Did I miss an announcement or did this just quietly happen?

It was on the top of their auction page listings a couple of weeks ago. Hard to believe no one commented until now...

Worth every penny, and a bargain at twice the price!

Hard to imagine many of the high rollers bidding there are scared off by the extra 2%.

Or will even be bothered to adjust their max bids downward by 2% to account for the extra juice.

At the end of the day it means nothing to buyers who can adjust their bids accordingly. Who might be impacted though are consignors who negotiated BP rebates before the bump. I wonder if they will see a 2 percentage point increase to their rebate to make up for this.

People here normally don't criticise auction houses because they don't want to get the boot !! :D

https://media.tenor.com/esCHs7tm78UA...ts-get-out.gif

I did not notice but that is because I do not care. If a house wants to charge 72% I am fine with it. It all gets taken into account before I place my bids.

I think we all take the buyers premium into account when we bid but with a higher premium do we still end up pay more for cards--I think so. For example, let's say there is a card coming up that you want. Let's say you are willing to pay $1000 for it. The current bid is at $750 and the next bump is to $800, do you make the bump? At a 20% BP the total is $960, which is under $1000 so you bid. At a 22% buyers premium the total $976 so you also still bid, but now because of the change in BP you have paid (assuming you win the card) $16 more. Maybe at times the higher BP results in the bid exceeding the person's cutoff while the lower BP would have allowed for a bump. While theoretically possible I think most bidders have a little flex in their cap and therefore, I think in most cases the higher BP just results in more money spent on the same card. Because of this my preference is always to favor the auction house with the lower BP.

Of course this will increase the costs to bidders in the heat of the moment bidding, as we all know. But Goldin going to 22% ensured that other houses would follow. I think Heritage was the first to go to 20% and they haven't had an increase in about ten years is my guess. Of course, their gross sales have quintupled probably since then so I suspect they'd be fine without raising the BP 2 points.

While I feel similarly...you won't win many desirable cards with this montre!

Spot on, Jeff.

The buyers who are on a budget will adjust; the rest won't. The real losers here are consignors. I'd venture a guess that only a small % of card consignors actually pay a consignment % to the AH. With so much zero consignment fee stuff, it is a way of taking another 2% out of sellers' pockets. Makes sense that they feel good doing it given that the average eBay fees are creeping up to the point where DIY selling is nearly as expensive as consigning at 20% BP.

I think this is 100% the result of consignors having leverage and taking larger and larger pieces of the BP. Over the past 3-4 years, for high quality stuff most AHs would give -5% to -10% of the hammer (a quarter to half the BP); really great stuff gets even better terms. I think in order to compete, that amount has recently shifted to -7% to -12% and now that’s being passed through. So I am not sure it comes out of the consignors pocket, but the AH certainly ain’t taking the hit.

Nobody says you have to consign. Plus, it’s noteworthy that the BP on almost every other type of auction is 25%…

Heritage is a money machine, so I wonder if this move is an inflation adjustment to reflect their increased internal cost or just plain greed, like Goldin.

Don't count me among the wimps or faint of heart. Whoever gets my criticism whenever it's due!

;)

Incidentally, has anyone on this board been blacklisted from an auction house for criticism? This is your opportunity to embarrass whichever!

I recall that Mastronet sent me one of their spam emails about how great/fantastic their next auction was going to be circa 2004. I responded with a sarcastic remark. Well William Mastro banned me from their bidding list in response. After a few years one of us was convicted of fraud and sent to jail.

;)

Haven’t you heard? Getting banned for expressing a dissenting opinion is the new American way.

Agree with the thought that this will tend to hurt consignors more than buyers - although everyone calls it a "buyers premium".

If most buyers have a max bid price in mind, they will simply lower their bid to account for the increase in BP. Ultimate loser is seller whose hammer price has now been lowered.

Pretty sure Snowman was recently banned after some posts around here about one of the major AHs, when the scan in the online listing didn't reflect the creases in the card he actually received.

As always seems to happen, things escalated quickly.

Somewhat differently, I had a rather public beef here with another major AH, when they sent me fakes. They didn’t ban me, but based on my experience with their leadership, I self selected out of bidding on their stuff going forward.

FWIW - I just printed out my eBay report for last year. Selling costs plus eBay fees plus shipping amounted to 25.03% of gross sales plus shipping - more than I thought.

What Ryan said, plus there aren't many, if any, consignors of quality material who are paying consignment fees these days.

If you did not notice it, you could not have taken it into account before placing your bids. Just sayin' :)

show dealers with “ auction prices” Starting to look like bargains

I think this is bad for the hobby overall, though. We need to see transaction costs come down, to make it easier for collectors to buy and sell cards. Effectively telling consigners "If you don't like it, keep your cards" is not a good message.

There are alternatives to consigning with a major AH for most cards.

and I'll be looking at the alts. AH doesn't charge the consignor but the consignor really pays a ghost fee of now 22%.....ghost meaning if a card is valued at 24K more than likely the buyer is only going to bid 20K to make up for the 22%

Memory lane with a 1933 160 Goudey Gehrig PSA 1. Snowman was 100% correct in this case. The card ended up being relisted in their infamous May 4, 2024 auction w/ proper + transparent pictures & description that time. Naturally, it’s sold for less the second time around ($3,763 vs $2,546)

Jan 11 2024 auction
https://memorylaneinc.com/site/bids/...e?itemid=80061

May 4, 2024 auction
https://memorylaneinc.com/site/bids/...e?itemid=82822

Fair. So it's more like "If you don't like it, find some other way to sell your cards."

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What do you think are the best?

:confused:

There is no one best. It depends on your situation. Do you need to sell fast, what is in your collection, do you want cash, selling part(s) or whole collection, plus many many more things that make the "best" different for everyone.

Not all auctions charge 20-22% many are still at 15-18% which is less than you can sell it yourself for on ebay...

As someone else mentioned, the consignor and buyer premiums in our hobby/business are actually pretty low. Coins, Art, Exotic Hand bags, and many other items garner a 25% consignment fee AND 25% buyers fee.

To compare different platforms for selling, I recalculate eBay's numbers to remove all of the shipping and sales taxes on both sides of the equation. I want to isolate the gross sales price received on the items and the net amount I receive to determine the % of my item that is being chewed up with costs. For example, I had a card sell for $68 and I netted $60.66. Those are the only two numbers I want. The rest is noise.

Selling on the BST here seems to be a popular option. For stuff that is widely collected and desirable for this crowd, my guess is that you’ll routinely get full value for it here relatively quickly, and without selling costs, although some buyers will ask to share in those savings.

Seems like a lot of people also tout FB marketplace. I don’t have a FB account, so have never tried it, but I hear good things.

Working with a dealer for a private commission also seems like a decent option, particularly for stuff that has a more niche audience. I’m not familiar with the cost to sell this way, and I suspect it can vary widely depending on the dealer, depending on the piece and the volume of stuff you bring to the dealer. But I wouldn’t be surprised if you can often get a lower selling cost this way. And for stuff that is more exotic and not widely collected, your odds of getting your desired price are probably as good or maybe even better than rolling the dice on an auction.

If the most I'm willing to pay for a card at Heritage is $1,000, the most I would bid is $1,000 -7% sales tax -$25 shipping -22% buyers' premium, so the most I would bid is $745. Previously (i.e., with a 20% buyers' premium) I would have been happy to place the $750 bid, but in this case I would not. But the key issue that isn't addressed in your post is that the high bids you're invited to top now will be systematically lower than they previously would have been because the other bidders are making the same calculations that I and the rest of us are, whereas it's just sort of implicit in your presentation that the identical $750 leading bid is sitting there waiting to be topped regardless of what the buyers' premium for the auction is.

I don't do social media :D but I agree B/S/T, especially if you don't need to make a quick sale and have a good understanding of where a card should sell, can be a very good option. Much as people hate ebay, IMO there are some ebay sellers to whom consignment of non-elite cards can be a very convenient and attractive option. Let's face it, your typical commodity card is just not going to get, usually, some super premium price in an auction house that will offset the hit from the consignment premium and the delays in listing and payment.

The thing about everyone saying that they'll just adjust their max bids to take into account the extra 2% BP is that pretty much every time folks bid, they just bid the next minimum bid increment. Nobody is adjusting their next bid to be ~2% less. Therefore, in most cases, you will be paying an extra 2% for your winning bids.

25 and even 30 percent aren’t far behind. Man, auction houses have all the power these days.

There are definitely other options. I tend to sell card privately and have no issues selling.

Good point; I think what people mean is that they will not make that next bid. Me, personally, I know that is BS. If I really want it for the personal collection, 2% is not a meaningful deterrent, especially at the relatively modest spending levels where I lurk. An extra $50 in context, BFD.

Well okay, sure. I have a friend who sells my old Tommy Bahama shirts on consignment and gives me half. I guess baseball cards are a better deal than that.

But I can sell my house for 8% or my car for $200. I am amazed it is so expensive to sell a baseball card. With all the improvements in technology it is easier than ever to take a picture of a card, post it online and get views.

Other than auctions, in 2024 I found it very hard to sell anything for a # I was happy with. Including here. Most of my BST listings didn't get one offer.

You can see from much of the anecdotal evidence posted here that prices are fluid and unpredictable. One auction a card sells for $5200 and at an auction a month later the same card sells for $3300. Or it sells for $3300 and a month later it sells for $5200. Take your pick. Seems like the only way to figure out what the going rate is on any day/month is to put it in an auction and see what the market will bear.

Let's say you had an item you expected to sell for $1M. AH1 has 20% BP and offers 15 points back. AH2 has 22% BP and offers 17 points back. Which one are you going to choose? Wouldn't you rather have the upside if bidders end up exceeding their limits?

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Frankly, I think its quite the opposite -- consignors have the power. There are many options for selling stuff - privately, a broker, ebay, social media, and many auction houses to choose from. Its the competition to get consignments that likely has driven Heritage's BP from 20% to 22%.

Once upon a time, auction houses charged the consignor a fee, say 10%, and charged a 20% buyers premium. Today, only an ass clown pays a consignor fee and almost all consignors of anything reasonably material get a portion of the Buyers premium. And, it has become a race to the bottom on how much BP an AH gives up-- what used to be -5% is now -7% and -8% is now -10%; if Heritage wont give me X% of the BP on a $100k item, I can go to one of a half dozen of equally reputable and successful AH's and get that X%.

Therefore, today, AHs are making a smaller percentage of the final all-in price than in then past. The saving grace, however, is that they are selling more stuff and the hammer prices on stuff sold is 2x-4x++ more than it was "back in the day". Thus, AH's are getting a smaller portion of a much larger pie, which portion ends up being more than the larger portion of their smaller, historical pie, but only because prices are much higher.

How will this affect things? I doubt it will have any affect. As a buyer, I wont let 2% impact my decision to buy something. As a consignor, I will now expect more of the BP than before. So if prices don't change and I get more of the BP, this change could actually help consignors who have the leverage to negotiate some of the BP.

This is purely a thought exercise for me, but if you're saying the net fees to me are roughly the same (my math says $41k to $41.5k) then what I would be most concerned about is making sure the bidding gets to $1M. Does having a 22% BP get me higher bids?

I don't know anybody who has $1M to spend on cards that would say "What the hell, it's just another $20k in fees". (Except Ryan, apparently.)

I guess I would be more worried about the opposite. Does the fact that the BP is higher give the perception that the card is worth less? Is it less likely for a bidder to bid $1M seeing that the BP would be $180k?

My point is, I think I would focus on how to make sure I get my $1M, not the (slight) potential of an extra $20k.

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I don't care what anyone says about Facebook groups. . . . there are a lot of scumbag losers on Facebook and a lot of "older" people [like me] who want no part of it and never did. Even more importantly, I would imagine that the average person getting a box of beautiful catalogs from Heritage or Mile High has economic assets far surpassing the typical Facebook goober. Of course there are exceptions, but when you buy with an AH you are not relying on the integrity of some random person.

Why do you go to a good auction house? To get your stuff in front of rich people who can spend big money. And you are relying on the skills of someone to market it in an attractive way to those folks. Period.

Same reason people list their real estate now with Sotherby's and happily pay their commission.

Eh, I actually grumbled quite a bit when Sotheby's took 22% of my home sale.

It’s not the actual $$s. It’s all relative. If you were going to spend $120 for a card ($100 hammer plus $20bp), wouldn’t you spend $122? Are you really going to let it get away over $2?

Let’s say you were going to spend $1200 on a card ($1000 hammer and $200 BP). Wouldn’t you spend $1220 to get the card, or will you let it get away over $20?

Now $12,000 ($10,000 hammer plus $2000 BP). Are you not going to pay $12,200 to get the card?

On $120,000…. It’s $122,000. I understand it’s another $2,000 but if you were going to pay $120k I don’t think you let the card get away over another $2000.

And so on. I suppose at some point the 2% becomes large enough that it gives you pause, but I think it’s relative.

And BTW - many auction houses started charging state taxes after the Wayfair ruling in 2018. In Maryland, that resulted in 6% more cost than before; I expect that’s about average. I don’t think the implementation of state taxes had a material change in bidding habits. In fact, card prices have soared since we started paying state taxes.

A rational person would still take state taxes into account when bidding. That the market has independently soared due to other forces since 2018 doesn't speak one way or the other to that, it's an illogical observation. If hypothetically the market overall had stayed flat, hammer prices would be down because of taxes being added to the bill, at least in a world where most people bid rationally.

Put me down for the hypothesis that baseball card buyers participating in auctions do not bid rationally.

Well, undoubtedly there is some of that, especially very late at night, but I still think for the most part they do understand how their bid will translate into a final price..

Yeah, the problem for me is that if I'm at $1200, I probably set a limit for myself of $1000 and am $200 over already. At some point you have to stop, don't you? Even if it's just another 2%.

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Sometimes, Al, you just gotta say, WTF and bid more than everyone else. Attachment 646549

yes! this is what the AH's hope for. And honestly...I fall into this mentality more often than not if its an item I have to have. Sometimes I'm just stupid!!!!

We are collectors. Sometimes we are all stupid!

I don’t disagree with that concept.

I just think that the math isn’t the most important part of the calculus.

The most important part is the jonesing and coveting.

That and the realization that all of this restraint leads to losing just about every auction, because some other bidder is willing to be less restrained.

There is a difference between knowing how much you will have to pay based on your bid, and how much you are willing to pay. The debates about BP usually are about the former; as people have claimed bidders do not take it into account.

Is it possible that you’re both right?

I’m not a psychologist, but when it comes to exceeding the amount that we were willing to pay for an item, my experience is that we come up with rationalizations and ways to fool ourselves into thinking that we’re paying less than we really are. Even though we mathematically know that the BP is there, I think we sometimes choose to conveniently ignore it if it means that we can still feel good about our decision to keep bidding.

You're not helping!

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It will only be time until higher bps come out. You say consignors hold the power, yet I think ahs hold more power these days. And they will want to make more money, so as long as bidders don’t mind, keep upping the bp.

Trust me, 25 percent isn’t that far in the future.

Every time there is a new auction, there are a ton of posts in this board about it. Hell, the opening day of bidding is like a holiday around here.

I know guys say they incorporate the bp into bidding, but if you really want the item, that notion goes out the window.

Yes but this is true when we get outbid also. People I'm bidding against bump the final price I'll have to pay far more than the bp.

Heritage is one of the best at putting the actual cost (bid + bp) in parentheses to inform the bidder of what he's actually committing to spend. So, my conclusion is that with elevated buyers' premiums, the ah wins and the consigner loses, while the bidder is unaffected - the money the winning bidder pays just gets distributed differently between consignor and ah.

Since the commission and the buyer’s premium both are paid to the auctioneer from the proceeds of the sale, they are functionally the same, so why have BP? Why not just take the 22% from the overall gross proceeds? If you’ve read my columns for a while you know my answer: it is a jazz hands misdirect. Labeling it a “buyer’s premium” tends to suggest that it is not a "commission" and that the buyer pays the “buyer’s premium”. That’s a bullshit framing, but a significant percentage of the public falls for it.

I agree. Similarly, why do auction houses only permit bidders to bid on items they put a bid on prior to extended bidding? How does this help either the consignor or bidder?

It seems like this policy forces people to at least put in placeholder bids before extended bidding. You may or may not really like that dynamic, but it seems like overall it has the potential to push stuff up a bit in the early going, rather than wait until extended bidding for the action to start.

And in terms of who benefits, it sure seems like the eventual winner benefits from having less competition. My odds of winning have to be better going against just 5 or 10 bidders rather than having to face the entire field.

My guess is that these days, most of us adjust our behavior to take this feature into account, and so anyone who is potentially a serious bidder is going to be in the hunt during extended bidding by virtue of having previously made a placeholder bid, and the odds of someone waking up during extended bidding and realizing they really wanted to bid on something new are probably relatively low.

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Pretty sure I've posted it before but it was Sotheby's and Christie's that started BP in the art world for exactly the reason Adam posits. Basically it let them tell consignors "Hey we're charging you less" even though we know the reality. Unfortunately once an entire industry adopts a practice it's hard to fight that. If I went to my clients and said we don't charge BP but we charge a higher commission I don't think I could talk fast enough to make that work.

Kevin Savage Auctions has no buyers premium added onto final bids. I have never looked into consigning with them so I don't know what their consignment fees are, but they have to be getting paid by someone to stay in business.

Most or all of the material that they offer is owned by them...

Kevin Savage is largely not a consignment model. They are the owners of the vast majority of the cards they sell. Nothing wrong with that, but it's not an apples to apples comparison.

EDIT. Should have read Scott's reply before I posted.

Good to know. I was not aware of that.