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!
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