Does the REA auction pick up towards the end?

[BRoberts]

Originally Posted by Hordfest

I get what you guys are saying. By "unfair" I just meant that it is frustrating that it can become a contest of whomever can stay awake later...

Am eager to hear your thoughts on buyer's premium.

[Hordfest]

Originally Posted by BRoberts

Am eager to hear your thoughts on buyer's premium.

Buyer's premium?

[darwinbulldog]

Originally Posted by Hordfest

Buyer's premium?

Auction houses tack on a buyer's premium (typically 20%) to the winning bid, so if the winning bid is $1,000 that's akin to placing a winning bid of $1,200 on eBay when you get the bill. Definitely something to be aware of before you place any serious bids with an auction house.

[brianp-beme]

Originally Posted by darwinbulldog

Auction houses tack on a buyer's premium (typically 20%) to the winning bid, so if the winning bid is $1,000 that's akin to placing a winning bid of $1,200 on eBay when you get the bill. Definitely something to be aware of before you place any serious bids with an auction house.

And don't forget to check beforehand if the winning bid will also be assessed state sales tax...it varies from auction house to auction house, and also can depend on what state you live in.

Brian

[Hordfest]

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

[Snapolit1]

Originally Posted by Hordfest

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

Do you think that they pocket the sales tax?

Breaking news: taxes collected are remitted to the state taxing authorities

[Hordfest]

Originally Posted by Snapolit1

Do you think that they pocket the sales tax?

Okay well that part is true of course lol. Not their fault about sales tax I suppose. I may have gotten a bit carried away in my surprise about 20% buyers premiums haha.

[BRoberts]

Originally Posted by Hordfest

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

Troll.

[Leon]

Originally Posted by BRoberts

Troll.

I will find out. No one picked up and I didn't leave a message. Calls are easy...
My guess, and this is only a guess, he is young.

.

[jcmtiger]

Originally Posted by Hordfest

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

Consignors (sellers can negotiate the consignment fee, depending on what your consigning, sometimes zero or anything less than the 25%.

[Aquarian Sports Cards]

Originally Posted by Hordfest

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

First, the vast majority of businesses in the world make more than a 45% gross margin. 2nd, very few, if any, auction companies make a 45% gross margin. I can tell you ours is significantly lower than that number. Gross margin, if you are not aware, is NOT profit mind you it's merely the difference between what we take in and what we send to consignors. so out of that number we have to pay for the online platform or software, all of our employees, advertising, lease on our offices and warehouse, show fees and on and on.

If you are new to the board dig around a little you'll see plenty of stories of auctions that went bust, often after they actually stole from consignors. Why did they steal? likely because, like you, they thought running an auction was an easy path to instant riches. When they found out they were wrong and they couldn't pay the bills, they victimized their consignors.

[Hordfest]

Clearly my opinion is in the minority here. Maybe I'll change my mind as I get deeper into the hobby. For now, let's just say I'm a skeptic.

[darwinbulldog]

Originally Posted by brianp-beme

And don't forget to check beforehand if the winning bid will also be assessed state sales tax...it varies from auction house to auction house, and also can depend on what state you live in.

Brian

I thought that was the same with eBay. Do they charge sales tax for everyone?

[brianp-beme]

Originally Posted by darwinbulldog

I thought that was the same with eBay. Do they charge sales tax for everyone?

I believe Ebay switched over to tacking on sales tax to all buyers, no matter what the state, a couple of years ago.

I could be wrong about if it was implemented uniformly, or if buyers from some states still did not have sales tax added to their purchases.

Brian

[Leon]

Originally Posted by Hordfest

Buyer's premium?

I suggest reading the auction rules, terms and conditions before you bid. If you don't know what a buyer's premium is, if you win a lot in an auction, you will find out LOL
.

.

[HexsHeroes]

.

. . . and lets not forget about the impact and fun that "shipping and handling" charges bring to the buyer's total cost

[JustinD]

Originally Posted by Hordfest

Buyer's premium?

I read that and was waiting for you to go full GPK -

[jcmtiger]

Originally Posted by Hordfest

Buyer's premium?

Make sure you read all the rules of the auction. They all add a buyers premium.

[insidethewrapper]

Definitely the West Coast has the advantage because of when the auction ends. I like individual lots closing if no bids on them for 10-15 minutes after 9pm. This gives everyone a chance at a reasonable hour. Why keep all the lots open until 4-5 am. ?

[JeremyW]

Hordfest/Brandon shouldn't have to pay any seller's premium.

[Snapolit1]

Originally Posted by insidethewrapper

Definitely the West Coast has the advantage because of when the auction ends. I like individual lots closing if no bids on them for 10-15 minutes after 9pm. This gives everyone a chance at a reasonable hour. Why keep all the lots open until 4-5 am. ?

I'm fine with modified closing a number of AH have adopted where lots can close after midnight or 1 if there has been no bid in the last hour.

I think that's fair to consignors and bidders.

[molenick]

I understand the confusion when first encountering the AH pricing models. They are providing a service by marketing, collecting payment, and shipping your consignment. In some cases, they will also submit your cards to a grading service. Some AHs will give you a partial advance (say 25% of the estimated value) on your consignment and you can also use your consignment to offset purchases in the same auction. In exchange for these services, they charge a buyer's premium (non-negotiable) and consignment fees (usually negotiable). It’s pretty much the standard business model for auction houses all over the world.

You have to judge whether you think you could net the same amount by selling the cards yourself (also factoring in the time and effort spent in doing so). If you choose not to use their services, there are other options without fees, like the B/S/T section on this board.

My understanding is that an AH charges taxes as per applicable state laws. No one asks Home Depot why they are charging sales tax on the microwave you just brought. Taxes are certainly a big issue...I live in New York, so I know…but it’s not specific to baseball cards.

As for the buyer’s premium, I am not clear what the issue is. If you know ahead of time you will be paying 20% more than you are bidding (it’s always in the rules), you take this into account when you bid. If you are willing to pay up to $1200 for an item, you bid up to $1000. I understand the psychology of it and the sticker shock when you get the invoice. But it’s not a hidden fee that they spring on you without advance notice. In some cases (Heritage, for example) an AH will show the current bid with and without the BP.

As for REA, I have some lots consigned as well. Some have spirited bidding, some only one or two bids. I am hoping the slower ones pick up, but I think this is a function of the cards themselves not REA. The cards are accurately described and scanned. I doubt the final results will be different from any other major AH.

[Edited to add: That was not a knock on REA. I use them because of familiarity, and because I like their knowledge, customer service, and ability to reach collectors. But my cards are what they are (not headline stuff) and I assume they would get more-or-less the same prices elsewhere.]