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.

Sent from my moto g(6) using Tapatalk

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.