REA increasing their BP and making other changes

[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

[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.

[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).

[Mark17]

I'm watching inflation going on all around me with virtually everything I buy. I just constantly keep adjusting what I'm willing to pay, realizing the numbers across the board trend upwards. This is just another example.

[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).

[Aquarian Sports Cards]

Originally Posted by parkplace33

I do think there might be an opportunity for ebay sellers to capitalize on this.

Which is amusing as every time ebay does something that pisses off the rank and file we get consignments from people who are sick of Ebay.

Obviously you're talking about the power guys like Probstein, but Ebay is constantly abusing their smaller sellers, much to our benefit.

[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.

[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.

[jayshum]

Originally Posted by Huysmans

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.

The 0% commission referred to is saying that the seller is not paying any commission to the auction house so they keep whatever the high bid is. However, the argument that was made is that when an auction house has a 23% BP, if the high bid is $4000 then the final selling price is really $4920, but the seller only gets $4000 and the auction house keeps $920.

On eBay, if a consignment company charges 5% of the high bid, if the high bid is $4920 (same as the selling price with the auction house including the BP), then the seller gets $4674 (95% of $4920) and the consignment company gets $246 (5% of $4920).

In the 2 cases above, the card is selling for $4920. One is a high bid plus BP (auction house) while the other is just a high bid (consignment house on eBay). When comparing the above outcomes, the seller is getting $4674 from the consignment company selling the card on eBay versus $4000 from the auction house.

[bnorth]

Originally Posted by Huysmans

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.

I get how it works. Take my example and actually do the math. My example shows the buyer paying the exact $5k total for their purchase in both examples. OK my math is actually a few pennies off because in my example the buyer at the AH really only paid $4999.95 for the card the consignor will receive $4065 for.

Seriously please show me the math when the real total selling price the buyer pays is $5K.

[rand1com]

Ebay is unlikely to bring as much as top AHs on most items. There is no OT bidding on Ebay so an under bidder who is willing to pay more has no opportunity unless they put in a ceiling bid in advance of the close. The option of jumping back in after the initial bidding is closed often is the big difference in AHs. I see plenty of completed auctions on EBay that fall well under market even with the big guys previously mentioned. It is more of a crap shoot IMO.

[Huysmans]

Originally Posted by jayshum

The 0% commission referred to is saying that the seller is not paying any commission to the auction house so they keep whatever the high bid is. However, the argument that was made is that when an auction house has a 23% BP, if the high bid is $4000 then the final selling price is really $4920, but the seller only gets $4000 and the auction house keeps $920.

On eBay, if a consignment company charges 5% of the high bid, if the high bid is $4920 (same as the selling price with the auction house including the BP), then the seller gets $4674 (95% of $4920) and the consignment company gets $246 (5% of $4920).

In the 2 cases above, the card is selling for $4920. One is a high bid plus BP (auction house) while the other is just a high bid (consignment house on eBay). When comparing the above outcomes, the seller is getting $4674 from the consignment company selling the card on eBay versus $4000 from the auction house.

These are not equal comparisons. Both you and Ben are comparing a closing bid of $4,000.00 with the auction house, to a closing bid of $4,920 on Ebay. Honestly, can you not see the difference??

IF the closing bid for both the auction house and eBay is $4,920.00, which is all that matters in making a fair comparison, the seller with the auction house and a 0% commission fee gets $4,920. The eBay seller pays 5% commission which is $246.00, for a net total of $4,674.00 to the seller.

You're comparing two DIFFERENT high bid totals. You don't add the buyer's premium INTO the high bid, it's added ON TOP of the high bid. Of course the buyer will get more for a card that sells for a HIGH BID of $4,920 on eBay, compared to a card that sells for a HIGH BID of $4,000.00 at an auction house. I don't know how to better spell it out.

[Huysmans]

Originally Posted by bnorth

I get how it works. Take my example and actually do the math. My example shows the buyer paying the exact $5k total for their purchase in both examples. OK my math is actually a few pennies off because in my example the buyer at the AH really only paid $4999.95 for the card the consignor will receive $4065 for.

Seriously please show me the math when the real total selling price the buyer pays is $5K.

Yes, your example shows the BUYERS paying the same price. So what?? What the seller gets is in relation to the FINAL HIGH BID, not what the buyer's FINAL price is. Again, the buyer's commission price is ADDED to the HIGH BID with an auction house.

Seriously Ben, you're combining the winning bid with the buyer's fee as opposed to basing what the consignor gets which is based on the winning bid amount. The winning bid amount determines what the consignor gets, the buyer's fees are ADDITIONAL to that.

[jayshum]

Originally Posted by Huysmans

These are not equal comparisons. Both you and Ben are comparing a closing bid of $4,000.00 with the auction house, to a closing bid of $4,920 on Ebay. Honestly, can you not see the difference??

IF the closing bid for both the auction house and eBay is $4,920.00, which is all that matters in making a fair comparison, the seller with the auction house and a 0% commission fee gets $4,920. The eBay seller pays 5% commission which is $246.00, for a net total of $4,674.00 to the seller.

You're comparing two DIFFERENT high bid totals. You don't add the buyer's premium INTO the high bid, it's added ON TOP of the high bid. Of course the buyer will get more for a card that sells for a HIGH BID of $4,920 on eBay, compared to a card that sells for a HIGH BID of $4,000.00 at an auction house. I don't know how to better spell it out.

The assumption being made is that the selling price is the same because the buyer is including the BP being added on when determining what their high bid will be. If that's the case, then the example is correct. Yes, the high bids are different, but what the buyer pays isn't.

If the selling prices are different (which is what happens if the actual high bids are the same), then yes, the consigner will do better with the auction house, but since many people say they include the BP when deciding what their high bid will be, it's more likely that the high bid will be lower if there's a BP added on top of it.

[Huysmans]

Originally Posted by jayshum

The assumption being made is that the selling price is the same because the buyer is including the BP being added on when determining what their high bid will be. If that's the case, then the example is correct. Yes, the high bids are different, but what the buyer pays isn't.

If the selling prices are different (which is what happens if the actual high bids are the same), then yes, the consigner will do better with the auction house, but since many people say they include the BP when deciding what their high bid will be, it's more likely that the high bid will be lower if there's a BP added on top of it.

Thanks for the clarification on your part. I don't disagree with this at all. The original argument made was why would a consignor sell with an auction house as opposed to eBay, with the fees mentioned included 0% for the auction house, and 5% with eBay, yet he claimed the consignor would net more with eBay - which is wrong. That was my whole point. It is irrelevant what the seller pays in the end. IF the high bids are the same in both scenarios, the consignor would net more with the auction house. That's all I was stating.

[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

[Johnny630]

Originally Posted by parkplace33

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

The complaining will end soon enough and they will be back to buying from REA. The real winner is REA they will still get tons of bidders and consigners.

[Exhibitman]

Scott, besides the fact that the antecedents for having a BP are totally irrelevant to today's business, I do not buy any explanation for the commission-BP structure other than it makes the auctioneer more money. If I 'win' a card at REA now, I pay REA the hammer price plus 23%. 123% of the hammer price is the true price of the card. On a $1,000 bid the auction house receives $1,230 from the winning bidder. How the proceeds are chopped up does not change that math. When a middleman (and auctioneers are middlemen between buyer and seller) has two choices of how to do things, a simple one and a more complex one, there is no reason to use the complicated one, other than in the belief that it makes more money for the middleman to do it that way. I've had many negotiations with auctioneers big and small, and they all use the bifurcated structure because they all 'sell' a low or zero commission knowing that the buyer's premium is still going to them.

I am not begrudging an auctioneer the right to make a living, I am expressing a preference for simply admitting that the commission and buyer's premium are one and the same, and dropping the pretense.

[Andy Sandler]

Everything is negotiable! I have done auctions for years going back to my Teletrade days when I had numerous employees, and currently with
www.AllSportsAuctions.com
where I am the only employee and have NO overhead!
When you run the company, you can do anything you want!
In my auctions consignors get the best of both worlds---I get very retail prices and I limit the consignor fees to something that makes sense for all parties.
Call me and see what I can do!
Thanks, Andy Sandler (914) 388-2940

[BRoberts]

Lol.

[OhioLawyerF5]

Originally Posted by Exhibitman

Scott, besides the fact that the antecedents for having a BP are totally irrelevant to today's business, I do not buy any explanation for the commission-BP structure other than it makes the auctioneer more money. If I 'win' a card at REA now, I pay REA the hammer price plus 23%. 123% of the hammer price is the true price of the card. On a $1,000 bid the auction house receives $1,230 from the winning bidder. How the proceeds are chopped up does not change that math. When a middleman (and auctioneers are middlemen between buyer and seller) has two choices of how to do things, a simple one and a more complex one, there is no reason to use the complicated one, other than in the belief that it makes more money for the middleman to do it that way. I've had many negotiations with auctioneers big and small, and they all use the bifurcated structure because they all 'sell' a low or zero commission knowing that the buyer's premium is still going to them.

I am not begrudging an auctioneer the right to make a living, I am expressing a preference for simply admitting that the commission and buyer's premium are one and the same, and dropping the pretense.

It was readily admitted that the purpose is to make the auction house more money and bring in more consignments. That's the goal of a for-profit business after all. Of course the auction house wants the more complex situation. They can spread the costs/fees out in various ways to keep various cutomers happy. They have to please buyers so they spend more. And they have to please consigners so they keep getting good items that draw buyers to their auctions. That's common sense and it isn't disputed by the auction house as the reasons for buyer's premiums. So I'm not sure who you are arguing with. I haven't seen anyone disagree with that. In fact, the one auctioneer posting said as much.

While you are correct that "how the proceeds are chopped up doesn't change the math" of a buyer's total cost being the hammer price, plus the BP. Your argument seems to ignore the fact that without the BP, the hammer price would be 123% of what it is when there is a 23% BP. In your scenario, the buyer wants to spend $1230 on the card. It makes no difference if there is zero BP and he bids $1230, or there is a 23% BP and he bids $1000. It's incorrect to suggest the bids would be the same with or without the BP. The buyer who doesn't factor the BP into his bids is a small minority.

[Touch'EmAll]

For the sake of conversation, let's assume extremes to help understand what happens in normal ranges.

If the buyers premium was zero, I believe the buyer would spend the same bottom line. And the consignor would get more because the hammer would be higher.

If the buyers premium were 50%, I believe the buyer would still spend the same bottom line. And the consignor would get less because the hammer would be lower.

So, as the buyers premium increases, there is probably going to be no affect on what the buyer spends. However, the consignor would get less as BP increases.

In a roundabout way, the BP is actually a consignors fee.

[bandrus1]

Originally Posted by Touch'EmAll

For the sake of conversation, let's assume extremes to help understand what happens in normal ranges.

If the buyers premium was zero, I believe the buyer would spend the same bottom line. And the consignor would get more because the hammer would be higher.

If the buyers premium were 50%, I believe the buyer would still spend the same bottom line. And the consignor would get less because the hammer would be lower.

So, as the buyers premium increases, there is probably going to be no affect on what the buyer spends. However, the consignor would get less as BP increases.

In a roundabout way, the BP is actually a consignors fee.

I absolutely agree with this logic

[OhioLawyerF5]

Originally Posted by Touch'EmAll

For the sake of conversation, let's assume extremes to help understand what happens in normal ranges.

If the buyers premium was zero, I believe the buyer would spend the same bottom line. And the consignor would get more because the hammer would be higher.

If the buyers premium were 50%, I believe the buyer would still spend the same bottom line. And the consignor would get less because the hammer would be lower.

So, as the buyers premium increases, there is probably going to be no affect on what the buyer spends. However, the consignor would get less as BP increases.

In a roundabout way, the BP is actually a consignors fee.

But I don't think that's realistic. If the buyer's premium goes down, commissions have to go up to compensate the auctioneer. So I don't think the consignor will get more with a lower BP. The auction house will get theirs one way or another. This is just about shifting those things around in the best way to get the most buyers and sellers to use them. It all balances out in the end for the consignor.