REA increasing their BP and making other changes

[jayshum]

Originally Posted by Yoda

Why? They are a profitable company. Rob Lifson once cut the BP from 20% to 19%.

Curious how you know their current financial state. Care to provide a source for your claim?

[Snowman]

Originally Posted by jayshum

Curious how you know their current financial state. Care to provide a source for your claim?

Ya, his source is 'No Shit Sherlock'. What's yours?

[jayshum]

Originally Posted by Snowman

Ya, his source is 'No Shit Sherlock'. What's yours?

As a data scientist, I thought you might want actual data to support an argument, but I guess not. That's all I'm looking for someone to provide since I personally don't know how REA is doing as a business. I've seen local businesses that appear to be doing well close so just because a business appears to be successful, their actual financial situation may be different.

[piecesofthegame]

I find all the discussion about BP a lot like going to your cell phone provider’s store to get a new phone or change your plan…ridiculously confusing! They are literally in the business of running rings around you with the numbers. It’s what they are paid to do.
As mentioned by many previously, they can charge whatever they want for BP, it’s not going to change what I’m willing to pay in the end. I have a figure in mind, I make my bids and and mentally add the % to my bid, and when it’s over my bid, see ya next time.

Now here’s what I DON’T understand. Why are reputable companies who sell using ebay (Probstein, 4 Corners), not viewed as a better option for a consigner than large auction houses? The major ones using eBay offer 95% of the sale price on items selling over $1000. So do the math…

$5000 card through auction house
$4000 bid + 23%=$4920.Result to consigners is $4K IF…IF they have 0% consignment fee. That’s best case scenario.

$5000 card on eBay through Probstein, 4 Corners, etc
$4920 winning bid (to keep all things equal). Result to consigner after 5% fee=$4674.
This seems like a No-Brainer for a consigner. What am I missing? I realize when we get into 5 digit, 6 digit, and 7 digit cards, no one will throw them up on eBay and hope for the best. But for the $1000-$10000 cards, I don’t understand why it’s not considered as an option by more consigners.

[Casey2296]

Originally Posted by piecesofthegame

I find all the discussion about BP a lot like going to your cell phone provider’s store to get a new phone or change your plan…ridiculously confusing! They are literally in the business of running rings around you with the numbers. It’s what they are paid to do.
As mentioned by many previously, they can charge whatever they want for BP, it’s not going to change what I’m willing to pay in the end. I have a figure in mind, I make my bids and and mentally add the % to my bid, and when it’s over my bid, see ya next time.

Now here’s what I DON’T understand. Why are reputable companies who sell using ebay (Probstein, 4 Corners), not viewed as a better option for a consigner than large auction houses? The major ones using eBay offer 95% of the sale price on items selling over $1000. So do the math…

$5000 card through auction house
$4000 bid + 23%=$4920.Result to consigners is $4K IF…IF they have 0% consignment fee. That’s best case scenario.

$5000 card on eBay through Probstein, 4 Corners, etc
$4920 winning bid (to keep all things equal). Result to consigner after 5% fee=$4674.
This seems like a No-Brainer for a consigner. What am I missing? I realize when we get into 5 digit, 6 digit, and 7 digit cards, no one will throw them up on eBay and hope for the best. But for the $1000-$10000 cards, I don’t understand why it’s not considered as an option by more consigners.

Doesn’t eBay charge 13%?

[piecesofthegame]

If you consign through a high volume seller like Probstein, 4 Corners, Greg Morris, etc, they get completely different rates than the average guy. Check their rates on their websites. Generally anything over $1000 will net you 95%. And you get NONE of the hassle. I’ve had mostly good success through this route.
Full disclosure, I don’t work for any of them, just an impartial observation.

[Casey2296]

Originally Posted by piecesofthegame

If you consign through a high volume seller like Probstein, 4 Corners, Greg Morris, etc, they get completely different rates than the average guy. Check their rates on their websites. Generally anything over $1000 will net you 95%. And you get NONE of the hassle. I’ve had mostly good success through this route.
Full disclosure, I don’t work for any of them, just an impartial observation.

Ah, makes sense.

[Carter08]

Originally Posted by piecesofthegame

If you consign through a high volume seller like Probstein, 4 Corners, Greg Morris, etc, they get completely different rates than the average guy. Check their rates on their websites. Generally anything over $1000 will net you 95%. And you get NONE of the hassle. I’ve had mostly good success through this route.
Full disclosure, I don’t work for any of them, just an impartial observation.

Would have zero problem selling with probstein in terms of the results he seems to get. My fear is I’ve heard you ship items to a place in Jersey, don’t really get communication from him about if they’re received and when they’re being put up. I tend to doubt this is true. Anyone who has actually used him?

[Eric72]

Rick Probstein, in a YouTube interview a year or two ago, mentioned something that stuck with me. His business model involves a slimmer margin than traditional auction houses; however, he makes up for this through high volume.

We've all seen this in other sectors. Wal-Mart comes immediately to mind. It worked for Sam Walton. Apparently, it also works for Rick Probstein.

[cardsagain74]

Originally Posted by piecesofthegame

If you consign through a high volume seller like Probstein, 4 Corners, Greg Morris, etc, they get completely different rates than the average guy. Check their rates on their websites. Generally anything over $1000 will net you 95%. And you get NONE of the hassle. I’ve had mostly good success through this route.
Full disclosure, I don’t work for any of them, just an impartial observation.

Don't know about the others, but Greg Morris is nowhere close to this.

Last I looked, it was $5 k minimum submission for consignment. And they take 25% of raw vintage consigned sales.

[Huysmans]

Originally Posted by piecesofthegame

I find all the discussion about BP a lot like going to your cell phone provider’s store to get a new phone or change your plan…ridiculously confusing! They are literally in the business of running rings around you with the numbers. It’s what they are paid to do.
As mentioned by many previously, they can charge whatever they want for BP, it’s not going to change what I’m willing to pay in the end. I have a figure in mind, I make my bids and and mentally add the % to my bid, and when it’s over my bid, see ya next time.

Now here’s what I DON’T understand. Why are reputable companies who sell using ebay (Probstein, 4 Corners), not viewed as a better option for a consigner than large auction houses? The major ones using eBay offer 95% of the sale price on items selling over $1000. So do the math…

$5000 card through auction house
$4000 bid + 23%=$4920.Result to consigners is $4K IF…IF they have 0% consignment fee. That’s best case scenario.

$5000 card on eBay through Probstein, 4 Corners, etc
$4920 winning bid (to keep all things equal). Result to consigner after 5% fee=$4674.
This seems like a No-Brainer for a consigner. What am I missing? I realize when we get into 5 digit, 6 digit, and 7 digit cards, no one will throw them up on eBay and hope for the best. But for the $1000-$10000 cards, I don’t understand why it’s not considered as an option by more consigners.

With all due respect, unless I'm missing something, your comparison doesn't make sense.

With an auction house, the buyer's premium has to be factored in after the hammer price.
A card that sells for $5,000.00 will net the consignor $5,000.00 if there is no consignment fee as you stated. The buyer pays the $5,000.00 plus 23% for a total cost of $6,150.00 to the buyer.

If the card sells for $4,000.00 before the buyer's fee, like in your auction house example, it's not a $5,000.00 card - it's a $4,000.00 card, in which the consignor with no fee gets $4,000.00.

The problem is that you compared a $4,000.00 winning bid (auction house) to a $4,920 winning bid (on eBay through Probstein, 4 Corners, etc).

[jayshum]

Originally Posted by Huysmans

With all due respect, unless I'm missing something, your comparison doesn't make sense.

With an auction house, the buyer's premium has to be factored in after the hammer price.
A card that sells for $5,000.00 will net the consignor $5,000.00 if there is no consignment fee as you stated. The buyer pays the $5,000.00 plus 23% for a total cost of $6,150.00 to the buyer.

If the card sells for $4,000.00 before the buyer's fee, like in your auction house example, it's not a $5,000.00 card - it's a $4,000.00 card, in which the consignor with no fee gets $4,000.00.

The problem is that you compared a $4,000.00 winning bid (auction house) to a $4,920 winning bid (on eBay through Probstein, 4 Corners, etc).

The assumption in the example you are questioning is that the bidder is taking the BP into consideration when placing a bid so that the selling price with the BP equals the selling price on eBay. Of course, not all bidders do this, but many on this board claim they do (or at least try to).

[Huysmans]

Originally Posted by jayshum

The assumption in the example you are questioning is that the bidder is taking the BP into consideration when placing a bid so that the selling price with the BP equals the selling price on eBay. Of course, not all bidders do this, but many on this board claim they do (or at least try to).

Fair enough. But what I questioned was the argument that the seller would get less with an auction house than Ebay as the original poster stated - which is wrong. 0% commission means the consignor gets 100% of the winning bid total. He tried to state that with a $5,000.00 winning bid, the consignor would only get $4,000.00 despite a 0% commission.

[bnorth]

Originally Posted by Huysmans

With all due respect, unless I'm missing something, your comparison doesn't make sense.

With an auction house, the buyer's premium has to be factored in after the hammer price.
A card that sells for $5,000.00 will net the consignor $5,000.00 if there is no consignment fee as you stated. The buyer pays the $5,000.00 plus 23% for a total cost of $6,150.00 to the buyer.

If the card sells for $4,000.00 before the buyer's fee, like in your auction house example, it's not a $5,000.00 card - it's a $4,000.00 card, in which the consignor with no fee gets $4,000.00.

The problem is that you compared a $4,000.00 winning bid (auction house) to a $4,920 winning bid (on eBay through Probstein, 4 Corners, etc).

I believe you are confused because the real winning bid through the AH isn't $4000. It is the total of the actual price the winner pays including the BP.

I see it this way if the consignor isn't also hit with a sellers fee from AH.
Card sells for $5K on eBay so after fees(5%) seller gets $4750. 5% of $5K is $250.
Card sells for $5K at AH. Seller gets $4065 after the AH takes the BP(23%) from the real sale price($5K) the buyer paid. The $4065 is the "winning"(LOL) bid before the 23% buyers premium is added to the real selling price the buyer paid.

If I am wrong someone please post the math. To be clear I do not care how the AH tries to add confusing fees to get more cash from the consignor or trick buyers into bidding more than they thought. As long as I know the numbers up front I am good.

[Huysmans]

Originally Posted by bnorth

I believe you are confused because the real winning bid through the AH isn't $4000. It is the total of the actual price the winner pays including the BP.

I see it this way if the consignor isn't also hit with a sellers fee from AH.
Card sells for $5K on eBay so after fees(5%) seller gets $4750. 5% of $5K is $250.
Card sells for $5K at AH. Seller gets $4065 after the AH takes the BP(23%) from the real sale price($5K) the buyer paid. The $4065 is the "winning"(LOL) bid before the 23% buyers premium is added to the real selling price the buyer paid.

If I am wrong someone please post the math. To be clear I do not care how the AH tries to add confusing fees to get more cash from the consignor or trick buyers into bidding more than they thought. As long as I know the numbers up front I am good.

The buyer's premium isn't SUBTRACTED from the winning bid, it's ADDED.
So, if the bid total is $5,000.00 at auction end, the buyer's premium of 23% is ADDED to this total, not SUBTRACTED as in your example. So the buyer would pay a total of $6,150.00 as I previously mentioned.

The consignor - if paying no fees as was the original example given - receives $5000.00, which was the total of bidding at auction end.

Think about it logically, if the winning bid at the end of the auction is $5,000.00, and the consignor pays 0% commission, how could he possible end up with $4,000.00, as in the example of the original poster. 0 is 0 no?? not 20% ??

So again, the buyer's premium is ADDED to the final hammer price, it is not taken from it.

[G1911]

Originally Posted by jayshum

Curious how you know their current financial state. Care to provide a source for your claim?

As we do not have the complete financial records to account every penny of the companies finances, it seems more reasonable to think REA runs a profit than that REA runs a loss at this point in their business, at or near the top of a very profitable sector with auction prices exploding the last few years. Does anybody genuinely, seriously believe that REA is actively losing money?

[Republicaninmass]

Those catalog are nizzzzzzze but, come on! They are a gold mine

[jayshum]

Originally Posted by G1911

As we do not have the complete financial records to account every penny of the companies finances, it seems more reasonable to think REA runs a profit than that REA runs a loss at this point in their business, at or near the top of a very profitable sector with auction prices exploding the last few years. Does anybody genuinely, seriously believe that REA is actively losing money?

It's certainly easy to say they must be making a lot of money because of what prices have done over the past few years. However, it also seems strange they would raise their BP just to make more when doing so is also likely to upset a (probably) large percentage of their customers. Maybe it's for the reason that Scott provided in an earlier post or maybe it's for something else. Without knowing their overall financial situation, it's hard to know why they would make this change.

[Aquarian Sports Cards]

Originally Posted by jayshum

It's certainly easy to say they must be making a lot of money because of what prices have done over the past few years. However, it also seems strange they would raise their BP just to make more when doing so is also likely to upset a (probably) large percentage of their customers. Maybe it's for the reason that Scott provided in an earlier post or maybe it's for something else. Without knowing their overall financial situation, it's hard to know why they would make this change.

One last time. They are not raising their BP to make more money in the direct sense. As numerous people point out the BP shouldn't have any impact on the money generated by a lot, just shift things around.

They are raising the BP to better secure consignments. If it makes a few extra bucks because people aren't smart enough to incorporate the information into their bids, that's a only a side bonus.

[parkplace33]

Originally Posted by Aquarian Sports Cards

One last time. They are not raising their BP to make more money in the direct sense. As numerous people point out the BP shouldn't have any impact on the money generated by a lot, just shift things around.

They are raising the BP to better secure consignments. If it makes a few extra bucks because people aren't smart enough to incorporate the information into their bids, that's a only a side bonus.

Definitely true.

Another piece that I find interesting is the behind the scenes negation between the seller and AH about getting a piece of that BP. For example, if you were getting 50 percent of the 20 percent before, do you now ask for 50 percent of the 23 percent?

[jsfriedm]

Originally Posted by parkplace33

Definitely true.

Another piece that I find interesting is the behind the scenes negation between the seller and AH about getting a piece of that BP. For example, if you were getting 50 percent of the 20 percent before, do you now ask for 50 percent of the 23 percent?

Absolutely. Or more.

[Johnny630]

Originally Posted by parkplace33

Definitely true.

Another piece that I find interesting is the behind the scenes negation between the seller and AH about getting a piece of that BP. For example, if you were getting 50 percent of the 20 percent before, do you now ask for 50 percent of the 23 percent?

Or lager percentage in cash advance....idk I bet all kind of negations happen if the consigner has the material a auction house really wants to showcase. Who knows people always want it both ways...sometimes it's the diamond sometimes the stone...idk

[parkplace33]

Originally Posted by Johnny630

Or lager percentage in cash advance....idk I bet all kind of negations happen if the consigner has the material a auction house really wants to showcase. Who knows people always want it both ways...sometimes it's the diamond sometimes the stone...idk

Oh I am sure it quite the discussion between consignor and AH

A prominent guy on a FB group posted that he will not buy from REA anymore with this news. I am sure he won't.... until a huge card appears at the next REA auction. Then all bets are off

[oldjudge]

Originally Posted by parkplace33

Definitely true.

Another piece that I find interesting is the behind the scenes negation between the seller and AH about getting a piece of that BP. For example, if you were getting 50 percent of the 20 percent before, do you now ask for 50 percent of the 23 percent?

If you were getting 10% before to be equivalent you should be getting 13% now. I wonder if REA is passing this along to consignors. My guess is no. This is why consignors should negotiate not what amounted of the BP they get back but rather what amount of the BP that the auction house keeps.

[bnorth]

Originally Posted by G1911

As we do not have the complete financial records to account every penny of the companies finances, it seems more reasonable to think REA runs a profit than that REA runs a loss at this point in their business, at or near the top of a very profitable sector with auction prices exploding the last few years. Does anybody genuinely, seriously believe that REA is actively losing money?

I doubt they are losing money but maybe not making as much as during the big boom. So taking a bigger share to keep up the bigger profit margin. It really doesn't matter how they increase the rates with simple math it always means the consigner gets less money and the AH gets more. The whole breaking it up into sellers premiums and buyers premium is just a way to make many people not understand that in the end they will be receiving less money for their consignment. As a buyer it is really meaningless how they do it.