Quote:
Originally Posted by bandrus1
Can somebody explain to me the reasoning behind adding a BP vs taking a total amount of a final hammer price?
Is there a known psychology that people will bid higher with BP's vs total price
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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 split them? If you’ve read my Substack for a while you know my answer: to manipulate people. It is a jazz hands misdirect. Labeling 1/3 of the AH take as a “commission” and the other 2/3 as a “buyer’s premium” tends to suggest that they are somehow different and that the consignor only pays the “commission” because the buyer pays the “buyer’s premium”. It's salesmanship: "I tell you what: I am going to make you a special deal and completely waive the commission on your consignment." Nevermind the 20%, er 23%, Biuyer's Premium. That’s a bullshit framing, but a significant percentage of the public (especially the novices or hon-collectors) falls for it when consigning. They don't have the knowledge or the stomach to ask for a piece of the BP.
Something I am going to cover in more detail in another column is the follow-on effect of the confusion that the split causes to some percentage of bidders.