REA increasing their BP and making other changes

[jayshum]

From the REA newsletter email I received:

Later this summer, we will roll out changes to the closing times and procedures for auctions in an effort to end auctions earlier, a practice we pioneered in 2016. More specifics will be forthcoming, but we are confident this will result in the same spirited bidding on a quicker basis while still allowing lots to remain open for as long as needed in the presence of competitive bidding. Additionally, effective September 1, 2025, the Buyer’s Premium for auction items will be 23%. There will continue to be no Buyer’s Premium on Marketplace purchases, and our introductory commission of 5% on any successful sale will continue through the end of the year.

[theshowandme]

[oldjudge]

Really sorry to hear that. I thought they were one of the good guys. Just because you can doesn't mean you should.

[Yoda]

Originally Posted by oldjudge

Really sorry to hear that. I thought they were one of the good guys. Just because you can doesn't mean you should.

Why? They are a profitable company. Rob Lifson once cut the BP from 20% to 19%.

[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

[Musashi]

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

It actually has nothing to do with the bids or bidders, and is about consignors. Consignors expect to pay little or no commission on high end items, and at the top of the market, expect a piece of the buyer premium as well. Buyer premium is how auctions maintain their profit margin while competing aggressively for high end consignments.

[Aquarian Sports Cards]

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

It started with Christie's and Sotheby's in the art auction world (I forget which one but this is what we were taught in auction school) using BP as a tool to be able to say to consignors "Hey we're only charging you X% the other guy is charging Y%. Of course when you add X% and the newfangled BP it equaled, or even surpassed Y%, but when you're the first to do something it works. Of course you also get copied, and the other company followed suit pretty quickly because they got tired of hearing "The other company only charges X%"

It's pretty hard to get away from once a the market starts to do it. This may well actually be to get them competitive again with Goldin and Heritage on the CONSIGNMENT end of things, because, as we all know, BP SHOULDN'T make a difference in the money an auction makes as people SHOULD account for it in their bidding.

[jayshum]

Originally Posted by Yoda

Why? They are a profitable company. Rob Lifson once cut the BP from 20% to 19%.

Curious how you know their current financial state. Care to provide a source for your claim?

[jayshum]

Originally Posted by oldjudge

Really sorry to hear that. I thought they were one of the good guys. Just because you can doesn't mean you should.

They're a business that's trying to make money, and usually that means as much as possible. I don't consider them to be bad guys for that.