What to expect from AH consignments?

[Rhotchkiss]

Auction Houses are for profit businesses (God Bless them). While some AHs may take a scrape on shipping, insurance and other "soft costs", the vast majority of their revenue is derived though fees. These fees are usually computed as a percentage of the hammer price. It doesn't really matter how its computed and to whom it applies, it ends up being something the buyer pays for and it reduces what the consignor puts in their pocket.

Traditionally, an AH will charge the consignor a Seller's fee -- a percentage of the hammer price -- and will charge a Buyer's Premium - a percentage added to the hammer price that the Buyer must pay to get the item they won. However, regardless of semantics, its all about how much the AH makes, paid for by the Buyer, and reducing what the consignor walks away from.

Two fundamental facts to acknowledge: (1) Since the consignor is the customer with the item, and since the AH makes no money unless it sells consignments, this is all negotiable. And, with most negotiations, he with the leverage has the advantage in negotiations. (2) in general, it is just as much work to list, sell, collect, ship, etc, a $500 card as it is a $50,000. This latter point is important because 10% on a $50k card is $5,000 vs 30% on a $500 card is only $150, but the work is similar while the reward is greatly disproportionate.

Ultimately, it comes down to how motivated is the AH to list a particular consignment; and motivation can be quantified in tangible terms -- how much money do I need to make to do the work here, and intangibly - are there indirect benefits to having certain items in an auction (such as a T206 Wagner, high grade 51 Mantle, or other items that create buzz and generate traffic to the auction). This motivation will of course vary by AH, and that's all part of the negotiation.

To address the OP's initial inquiry: I am not surprised that you are getting offers of a 7.5% - 10% seller's fee and none of the Buyer's premium, on a group of items valued at $100 - $500. Think about it. Suppose you have an item valued at $250; the hammer price would have to be about $200+ so that it sells for $250 with the 20% BP. If the AH takes a 10% seller's fee and a 20% BP, the AH is making $50 to sell this item. That's $50 to receive, list, describe, promote, sell, collect, and ship. Plus, there is customer service time and certain risks, such as someone is unhappy and bashes the AH on net54 or another forum. Whether $50 is worth all of this is the decision the AH must make. Whether the consignor is willing to walk with $200 on a card worth $250 is the a decision the consignor must make.

Anyway, my gut is that you can probably get the seller's fee reduced to less than 5% or eliminated entirely. But that will depend on leverage and motivation of the AH to get your consignment. And, fighting over 2.5%+ may not matter much, as getting 70% of a card that sells for $500 is almost the same as getting 80% of a card that sells for $450 ($10 difference).