AH Blues

[Exhibitman]

It's all marketing, guys. No matter how many math examples we run, the fact is that consignors hate hearing about a commission. That's why a high BP is the norm: most AHs will waive the commission for a decent consignment. Just like shipping. REA (hi Brian) doing the free shipping is brilliant because shipping pisses off so many customers. It is a minuscule part of the overall invoice from the AH in most cases but it feels like dirt in your eye, especially when the AH charges for insurance to value and you just know that they have a blanket insurance policy that covers to a set limit regardless of value, so it is a profit center.

Scott B is definitely spot-on about other fields and what AHs charge there. We are lucky that we (consignors) can usually get a no commission deal. Try selling an entertainment item; you are nearly always going to pay 35%+ total because the AHs that deal in those materials do not waive their commissions unless the item is astounding.

As for BP splits, well, if you are offering a $100K card for consignment, you have leverage to get a piece of the BP. Nothing wrong with that.

I am not surprised people use PWCC for some nicer stuff. It gets the eBay customer base of eyeballs, the rate is substantially lower than most AHs charge, and cards to cash is fast as compared to other outlets. I don't know what others experience, but it is very frustrating when I consign an item in January, not see it hit the blocks for months and not get paid for another 30-60 days. Particularly if I have a use for the funds and can't wait half a year or more to get to paid.

[TanksAndSpartans]

Originally Posted by Exhibitman

you are nearly always going to pay 35%+ total because the AHs that deal in those materials do not waive their commissions unless the item is astounding.

Adam, great post - I found the same thing this morning when I did some research = "google searches" - the BP gives AHs the opportunity to split their take into two different accounting items.

Another interesting thing was I did find a couple studies that were a bit surprising - one implying a low BP, less than 5%, doesn't suppress bidder behavior and another that showed a 10% BP compared with no BP had a 9% impact i.e. bidders did not reduce their bids by the full BP, but interestingly they used this as evidence bidders will reduce bids when the BP is present because it was very close to a 1-1 reduction.

[Peter_Spaeth]

A study by Gerding, Rogers, Dash and Jennings at the University of Southampton (UK) titled “Sellers Competing for Buyers in Online Markets: Reserve Prices, Shill Bids, and Auction Fees” states, “Another popular type of auction fee is the buyer’s premium, which is paid by the winner of the auction and is a fraction of the closing price … note that a bidder with a given valuation will correct his/her bid … such that the bid plus the fee … is equal to the bidder’s valuation. Interestingly, since all buyers thus lower their bids, the seller ends up paying the fee even though the fee is originally charged to the buyers.”

[RedsFan1941]

the study obviously was written by a bunch of auction house cronies who are very angry

[tiger8mush]

Originally Posted by Peter_Spaeth

"...Interestingly, since all buyers thus lower their bids, the seller ends up paying the fee even though the fee is originally charged to the buyers.”

Yeah but thats not Webster's definition of a bid so it can't be true

[RedsFan1941]

just got a text from the troll. his shift under the bridge scaring weary travelers ends at 9. he will check in then.

[Fballguy]

Originally Posted by RedsFan1941

just got a text from the troll. his shift under the bridge scaring weary travelers ends at 9. he will check in then.

Old man humor. I love it. I feel like I'm being trashed talked to by this guy.

[Fballguy]

Originally Posted by Peter_Spaeth

A study by Gerding, Rogers, Dash and Jennings at the University of Southampton (UK) titled “Sellers Competing for Buyers in Online Markets: Reserve Prices, Shill Bids, and Auction Fees” states, “Another popular type of auction fee is the buyer’s premium, which is paid by the winner of the auction and is a fraction of the closing price … note that a bidder with a given valuation will correct his/her bid … such that the bid plus the fee … is equal to the bidder’s valuation. Interestingly, since all buyers thus lower their bids, the seller ends up paying the fee even though the fee is originally charged to the buyers.”

The University of Southhampton? What's the matter, couldn't find a study from Bangladesh? Don't get me wrong, who better to go to for insight on the bidding habits of Americans in the sports memorabilia market than the Brits...after all they were playing the game back when it was still known as BaseRock.

Amazing they know the thought process of "all bidders". Sounds like a thoughtful study.

[Peter_Spaeth]

The rants of a guy on a chatboard who is a minority of one doubtless are more persuasive.

[RedsFan1941]

"mom! the meat loaf! we want it now!"

[Snapolit1]

Tired issue. . . I've posted on it a number of times myself and mostly been told I'm wrong. I think AHs love the BP because it does lead to higher bidding prices. In a perfect world all buyers would religiously include the vig in their bids. They don't. Just like why someone says a meal at a restaurant cost us $100, and not $120 including a tip. People aren't perfect decision making machines. Particularly with regard to a discretionary purchase like a collectible that they are passionate about. But most people here are perfectly rational and analytical in their bidding approach so I may be in the minority.

I've also had more than a few drinks at charity auctions and overbid for crap that I really don't need.