Quote:
Originally Posted by Hordfest
Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.
How do they stay in business?!
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First, the vast majority of businesses in the world make more than a 45% gross margin. 2nd, very few, if any, auction companies make a 45% gross margin. I can tell you ours is significantly lower than that number. Gross margin, if you are not aware, is NOT profit mind you it's merely the difference between what we take in and what we send to consignors. so out of that number we have to pay for the online platform or software, all of our employees, advertising, lease on our offices and warehouse, show fees and on and on.
If you are new to the board dig around a little you'll see plenty of stories of auctions that went bust, often after they actually stole from consignors. Why did they steal? likely because, like you, they thought running an auction was an easy path to instant riches. When they found out they were wrong and they couldn't pay the bills, they victimized their consignors.