Heritage Auctions

[Bugsy]

Originally Posted by Runscott

If it's a separate business, it makes a difference. If not, then of course it doesn't.

If the auction house is buying lots from their own auctions, they are getting a 20% discount compared to the rest of the bidders. Now my analogy of taking $5 from one pocket and putting it into the other is a bit oversimplified because they theoretically pay a tax on that 20% bp, but I'm sure the amount they end up paying depends on how they keep their books. Either way, they are receiving a substantial discount the rest of their bidders are not getting. This is another ethical issue to consider.

[Runscott]

Originally Posted by Bugsy

If the auction house is buying lots from their own auctions, they are getting a 20% discount compared to the rest of the bidders. Now my analogy of taking $5 from one pocket and putting it into the other is a bit oversimplified because they theoretically pay a tax on that 20% bp, but I'm sure the amount they end up paying depends on how they keep their books. Either way, they are receiving a substantial discount the rest of their bidders are not getting. This is another ethical issue to consider.

The last time we had this discussion (regarding a different large auction house), they explained that, as two separate companies, they paid the buyers premium if their 'sister' company bid on auctions. If that's the case with Heritage, then they aren't getting a 20% discount. But I don't know - waiting for someone to chime in.

[BigJJ]

In instances in which an auction house actually wins an item, as opposed to just bidding, the auction house loses the buyers premium from what would have been a non-auction house high bidder, so saying an auction house gets the piece at a good size discount to non-auction house bidders by not paying a buyers premium (or by paying buyers premium to another company business) is not really accurate. There is a smidgen of a discount - the amount of buyers premium the auction house would have paid (if they were not the auction house) at the price they won the item, less the amount of buyers premium the losing non-auction house bidder would have paid if the auction house had not bid and won. Therefore, I do not think this is much of a factor.