Psychology of the Buyer's Premium

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Posted By: Bruce Dorskind

Whilst we agree with the observations of our esteemed colleague and respected
dealer, Mr. Sloate, as well as those comments so eloquently articulated by
legendary 19th century collector Corey Shanus, we would like to make two additional
observations.

Dealers. at least in the baseball card hobby, are quite ready to drop their "draws" and
eliminate their seller's premium for any graded item with a value of $500. We wonder,
for example, what percentage of the graded baseball cards sold in the last 10 M (Mastro, Mile High and MemoryLane) Auctions commanded a seller's premium at all?

In the few cases where we have considered selling an extremely rare and valuable item,
the major auction houses (not REA) offered us an arrangement where there would be no
seller's premium and we would split the buyer's premium.

Our friends in the rare coin business basically work on a total premium of 7.5% to 10%.
They waive the seller's premium and rebate between 1/3 and 1/2 of the buyer's premium
in order to secure a major collection.

The big question is which matters more the premium or the Auction House? Based on our experience,
non commodity items command a much higher price when one deals with a knowledgeable auction house.
Descriptions and marketing really matter. and they cost a great deal of money.

Both Christie’s and Sothebys have fallen short when it came to baseball items (at least post Copeland and Halper).

Accordingly, if one is selling a truly valuable item, regardless of the fee arrangement, one must consider the auction house's reputation, industry knowledge and marketing strategy.

As a buyer, we always consider the premium to be a part of the purchase price.

We appreciate your consideration.


Bruce Dorskind
America's Toughest Want List