Buyer's Premiums

Posted by: lando-4

Buyer's Premiums - Wed Mar 22 2017 08:22 PM

I just got through looking at an upcoming auction on Proxibid and saw that the buyer's premium was 27%.

WOW!! How high will these premiums go? It wasn't 6 months ago, a bought a couple of items and paid a 20% premium. I thought that was crazy high!

I'm curious how much a seller has to pay the auction house to sell items. Are they also getting fleeced like the on-line buyer?

Those of you that are close enough to attend these auctions in person, are you paying the same buyer's premium as what is listed on Proxibid? I'm curious to know if I'm already starting out 27% behind a person that is bidding in house.

Anyways, the auction I browsed had several items of interest, but with the buyer's premium that interest quickly disappeared.

Oh well it is what it is.
Posted by: Bill jr

Re: Buyer's Premiums - Wed Mar 22 2017 08:44 PM

I believe proxibid is usually higher
Posted by: Done4

Re: Buyer's Premiums - Wed Mar 22 2017 11:08 PM

The auction houses are almost getting 50% on the sales. This will come back to bite them.
Posted by: Paul Bell

Re: Buyer's Premiums - Thu Mar 23 2017 12:04 AM

I cant remember the percentages, but I know Mecum was charging a much higher percentage if your weren't local (internet buyer) too. Pretty much is making it impossible to buy anything and get a reasonable deal.
Posted by: Lastgas15

Re: Buyer's Premiums - Thu Mar 23 2017 09:10 AM

Remember when we used to complain about the 10% buyers premium that Aumann charged?

It's not just the bp, sellers commissions have crept up as well. That's a lot of money leaving the hobby.
Posted by: Craig Osbeck

Re: Buyer's Premiums - Thu Mar 23 2017 10:23 AM

It is only a few occasions now I look at auctions, THE PREMIUMS ARE JUST WAY OVER THE TOP. I have not bought for years and I am sure nobody really cares. Someone with a lot of money are buying things.
I have looked at an auction coming up and will bid on just one item, just too much with premiums on the other stuff.

NO ONE CARES THOUGH, THERE ARE NO OTHER OUTLETS.
Posted by: Wasatch Man

Re: Buyer's Premiums - Thu Mar 23 2017 12:14 PM

I have never bought anything from a auction house other than a few things from ebay but now I am looking to buy a dump truck thru a equipment auction house . There fee is 2.5% for purchases above $2,500 to a maximum of $950 and 10% for anything under $2,500 and there is no additional charge for online or proxy bidding . Now maybe this is not a fair comparison but I thought it was worth noting. Peter
Posted by: UpnorthNeil

Re: Buyer's Premiums - Thu Mar 23 2017 02:00 PM

Crime typically exists to the level we allow it to exist.


When enough people see these premiums as unfair and stop bidding, the premiums will go down or go away. Until that time, why would any auction house be compelled to change?
Posted by: PlainBroke

Re: Buyer's Premiums - Thu Mar 23 2017 02:20 PM

Originally Posted By UpnorthNeil
Crime typically exists to the level we allow it to exist.


When enough people see these premiums as unfair and stop bidding, the premiums will go down or go away. Until that time, why would any auction house be compelled to change?


Nail on the head......
Posted by: jecos

Re: Buyer's Premiums - Thu Mar 23 2017 04:59 PM

I don't like the high BPs either but I have a somewhat different perspective. When I go to an auction, I know what I am willing to pay for an item out the door. I therefore adjust my max bid based on the BP. If I'm willing to pay $500 and the BP is 25%, then I'll bid as high as $400. If its only 10%, then I'll go up to about $450. In a perfect world, the other buyers would have the same strategy.

This puts the onus on the consignors to put a halt to these BP increases, since they're more impacted. Higher BPs should mean lower hammer prices,which cuts into their take-home.

Of course this theory goes to hell when you have a couple knuckleheads with deep pockets show up who ignore the BPs and are willing to pay whatever it takes. Joe
Posted by: Steven C.

Re: Buyer's Premiums - Thu Mar 23 2017 05:35 PM

Originally Posted By UpnorthNeil

When enough people see these premiums as unfair and stop bidding, the premiums will go down or go away. Until that time, why would any auction house be compelled to change?


Neil, I just don't see this ever happening. I wish it would. But I just don't see a day when an auction has to close down because no one is buying/bidding.
I guess time will tell.
Posted by: carolinaskies

Re: Buyer's Premiums - Fri Mar 24 2017 07:33 AM

People have often complained about eBay fees on the sellers side of the equation, yet they remain under 10% and then under 5% Paypal fees. The average auction house charges 20-25% seller fee per item and 10% buyers premium IF ANY. The seller fee covers advertising and handling of the actual sale and people required.

Those of who regularly participate in the big advertising auctions are being fleeced and are willing to bend over and get reamed too. Until participants of those auctions decide to boycott them making the auction profit spiral stop it will continue to go up and up. Rich folk always have money to blow and so those who cater to them don't worry about premiums. But they are buying the cream of the crop, about 10% of overall auction sales. It's the rest of the bidders who buy the 90%, and if they quit showing up... well then you might get a correction. But unless people get together and make a concerted effort to ditch these particular auction houses they only have themselves to blame when they continue to be fleeced and bend over for the next prostate exam.
Posted by: K W FRITH

Re: Buyer's Premiums - Fri Mar 24 2017 08:04 AM

Steve--I think Neil is right on with this. If the only buyers at a big sale, are a few deep pocketed individuals looking for a few choice items, and the rest of the sale goes in the toilet, I doubt there will be many consigners knocking on that companys door?
It may be a small effort, but I have simply quit buying at ANY big auction charging those outrageous buyers premiums!
Posted by: BrianH

Re: Buyer's Premiums - Fri Mar 24 2017 09:33 AM

I don't disagree with anything you guys have said above. The BPs on these big gas & oil auctions are getting out of hand. However, as a relative new guy to this hobby, there are a limited number of places where I can buy this stuff:

eBay - forget it. Fakes are rampant and unless you really know what you're looking at you'll get taken.

Big auctions - fairly safe, but as everyone said, expensive.

Petro shows- Well, I still have a day job Mon-Fri and a limited number of vacation days/year. From what I have seen/heard on here, most of the action takes place during the week at these shows and I just can't take several days off and drive 8-12 hours to go to a show. That won't make me popular at home.

Personal contacts/network - For a new guy like me, not many exist yet. Working on this but it takes time.

Facebook - Some groups are good, some aren't. Sometimes good deals, sometimes not.

Oldgas - Great place but good deals get snapped up quick.

I think that pretty much sums it up for me. So I have Oldgas, Facebook and the big auctions as my sources right now. Again, I don't like the high BPs but my sources are limited.

BrianH
Posted by: jecos

Re: Buyer's Premiums - Fri Mar 24 2017 02:22 PM

As I've already stated, at auctions where the buyers adjust their bids based on the BP, the sellers/consignors effectively end up sharing the BP. Here's an interesting article on the subject:

http://www.antiquetrader.com/featured/buyers-premiums-price-auction-business
Posted by: Mike M.

Re: Buyer's Premiums - Fri Mar 24 2017 03:40 PM

Originally Posted By jecos
As I've already stated, at auctions where the buyers adjust their bids based on the BP, the sellers/consignors effectively end up sharing the BP. Here's an interesting article on the subject:

http://www.antiquetrader.com/featured/buyers-premiums-price-auction-business


Article pretty much sums it up!!!
Posted by: lando-4

Re: Buyer's Premiums - Fri Mar 24 2017 04:47 PM

Good article Joe.

The article states "Buyer’s Premium doesn’t concern me if I want the item: 11%."

From my experience I don't see folks adjusting their bidding down on the items I've been interested in at past auctions with high Buyer's premiums. I'd say the percentage in the above quote from the article is much higher for oil and gas auctions. In the end, I see items selling for more than what they are worth when the buyers premium is addded to the hammer price.

As each year passes, I'm coming to the realization, I need to win the lottery to continue collecting the items that catch my eye. eek
Posted by: Speedracer

Re: Buyer's Premiums - Fri Mar 24 2017 07:10 PM

Originally Posted By lando-4
As each year passes, I'm coming to the realization, I need to win the lottery to continue collecting the items that catch my eye. eek



Ha ha. That is my plan as well. I'll keep you posted on my progress.

And good article Joe.
Posted by: BryceG

Re: Buyer's Premiums - Mon Mar 27 2017 09:28 AM

the premiums are crazy. people will keep bidding as long as there are good consignments. the big auction houses spend a ton, thats why they charge a ton. will they shut down? no. will people stop buying/consigning? no.

the answer will eventually be competition. The hobby is in dire need of a honest, trustworthy, dedicated, and fair auction company. I believe this will eventually come to fruition. The key will be having contacts within the high-end collector world... so that the consignments come in. If someone does take on this huge commitment, I think that will be the only answer in battling the current premiums.
Posted by: Steven C.

Re: Buyer's Premiums - Mon Mar 27 2017 10:04 AM

"that competition for high-end consignments has resulted in lower commission revenue, an increase in buyer’s premiums was necessary to maintain profit margins and revenue"

Copy and pasted this from that article.
Basically the auction houses are saying, we'll damned if we're taking a pay cut!
Nothing to do with increases in the cost to run business.
Posted by: carolinaskies

Re: Buyer's Premiums - Wed Mar 29 2017 07:32 PM

Originally Posted By Steven C.
"that competition for high-end consignments has resulted in lower commission revenue, an increase in buyer’s premiums was necessary to maintain profit margins and revenue"

Copy and pasted this from that article.
Basically the auction houses are saying, we'll damned if we're taking a pay cut!
Nothing to do with increases in the cost to run business.


That's like oil companies saying they aren't making enough on gas sales. I would bet these guys are paying themselves more each year, increases beyond what any 9-5er gets in pay raises from companies they work for.
Posted by: Craig Osbeck

Re: Buyer's Premiums - Wed Mar 29 2017 08:50 PM

Each time I was going to bid on an item in the last auction, had my calculator at the ready and stopped when it reached the amount I wanted to pay. Did not get anything and probably won't. but there is no shortage of people willing to pay.
Posted by: cormy

Re: Buyer's Premiums - Thu Mar 30 2017 10:23 AM

Aren't the cosigners partly to blame since they are using them to fleece the buyer?
Posted by: Lastgas15

Re: Buyer's Premiums - Thu Mar 30 2017 02:13 PM

How is anyone being fleeced? Buyers know before they place a bid that they'll have to pay the premium.
The buyers premium is a tool that auctioneers use to attract consignors. Auctioneers can offer lower commissions to sellers by shifting a portion of the commission to the buyer. It also allows the auctioneers an opportunity to make more money because the combined sellers commission and buyers premium are usually higher than what the auctioneer can charge the seller in a non-bp auction.

I absolutely despise the buyers premium, but it's all above board. Buyers have a couple of choices. They can opt to not bid because they don't agree with the premium, or they can adjust their bids to account for the premium (and sales tax, and shipping and handling).

When it comes to collectibles the desire to own certain items outweighs the added expense. That was clearly evident with many items from Kyle Moore's collection bringing extremely high prices.
On the other hand the same auction house, with the same premium sold most of the globes in a 2 day sale for wholesale prices. Buyers are much more inclined to figure the added expenses when bidding on more common/less desirable items.
Posted by: cormy

Re: Buyer's Premiums - Fri Mar 31 2017 11:43 AM

Originally Posted By Lastgas15
How is anyone being fleeced?


You answered your own question.


Similar to price gouging after a natural disaster... frown
Posted by: K W FRITH

Re: Buyer's Premiums - Sun Sep 17 2017 02:37 PM

This is an old post but a discussion I had a couple days ago seems to bring it to mind again. I was speaking with the co-owner of a new auction company that charges 15% for consignments and 15% buyers premium. I politely explained my feelings on buyers premiums but it didn't change anything.
I feel that with this scenario, the seller is actually being charged 30% to market something, because any smart buyer is correcting his bidding to allow for the buyers premium and effectively stopping his bidding 15% early!
While I don't necessarily disagree for the need of increased income for some auction companies, I do disagree with the idea that the consigner should bear the burden. There is the argument that the buyer percentage doesn't actually affect bidders and I call BS on that. It may happen sometimes, but any seasoned collector has already calculated his bid amounts with the percentage figured in, and he intends to stop there.
I don't know about everyone else but I will NOT consign to a sale with bidder premiums. I don't mind buying at that type of sale because I will have already calculated my bid amounts and won't bypass them. The only scenario where this reasoning goes out the window is when you consign an item and a couple of individuals start fighting over it and the bidding tops all expectations! This happens to certain select items in any sale but certainly isn't the norm. In fact, many times it can go the other way too and the consigner really takes a beating.
I have always faced the fact that an auction can be a ***** shoot at times, so I have tried to off set those odds by consigning top quality pieces and shooting for the average on the bunch. It has always worked well for me in the past and was a good method to use when selling in an auction setting, but now that buyers premiums seem to be the norm, I have had to draw the line. I can sell items at a swap meet table and if I want them to sell faster, I can scale down my pricing by 20% and still come out ahead!
I sure hope a reputable auction company pops up soon and can exist on strictly a consignment fee. I really feel they will do more business than they ever thought possible!
Well, that's my story, and I'm sticking to it!