Buyers premiums are a tool to help auctions trick sellers into thinking they
are paying less in commissions than they really do. I hated them when I ran
auctions through other auction houses because of their deceptive nature and
that is why I don't use them now.
Most bidders are savvy enough to factor in the 19.5% or 20% BP in their bid
(they bid $500 because they are willing to pay $600), but it is a different
story with sellers.
A guy finds a bunch of posters in his attic or barn, and contacts a bunch of
auctions about selling them. Most will tell him their selling commission,
with no mention of the buyers premium (or it will be buried in fine print).
That guy will often call me and tell me I had the highest commission rate of
anyone who they contacted, because I take 20% on a $1,000+ item, and
everyone else takes less. I then have to explain why BP is (they have never
heard of it), and I have to lead them through the math, and finally they go,
"That's pretty underhanded".
But most people never get that explanation. It is also why some auctions
list "selling price" as the "hammer price", because that way, the consignor
doesn't learn about the BP even AFTER the sale.
And, as Phil points out, there are also the profit centers of mark-up on
restoration, insurance fees, catalog fees, photography fees, color
photography fees, unsold premiums, return shipping fees, etc. I have known
many cases over the years where the consignor of a group of items (who was
both naive and trusting and simply sent their items) ended up OWING the
auction house money on their total consignment!
How about a discussion of auction houses that charge BUYERS outrageous
shipping (which becomes one of their greatest profit centers)?
Bruce
On Sat, Jul 12, 2008 at 8:10 PM, Susan Heim <[EMAIL PROTECTED]> wrote:
>
> Hello all,
> I was talking with a fellow collector yesterday about auctions. A
> subject came up that seems to have some controversary of opinions regarding
> auction results. Let's say the gavel comes down for an item sold at $500,
> but with the buyer's premium the total cost is $600. I often hear many
> people say "that item sold for $500", but in my opinion it sold for $600. I
> have had many people say to me you don't count the buyer's premium, but that
> sounds ridiculous to me since the overall cost of the item to the buyer was
> $600. That final value means alot when you have items closing in the
> thousands and the buyer's premiums add several thousand more. I have
> customers looking for certain titles and they will quote recent auction
> sales and often, especially when seeking to buy not sell, quote the gavel
> price without the buyer's premium. I will mention to them that the price
> they are quoting isn't the true selling price that you have to include the
> buyer's premium. They will then inform me that since they are looking to buy
> from a private party, the buyer's premium doesn't apply. As I shake my head,
> I suggest that if you are going to quote auction prices, you have to include
> the buyer's premium as that is really the final cost of the item and what
> someone was willing to pay "total" for said item. For instance, if
> Breakfast at Tiffany's gaveled at $5000, but the final cost was $6000, how
> can you say "Breakfast at Tiffany's just sold for $5000"? I'm rambling, I
> know......What do you all think?
>
> Sue
> www.hollywoodposterframes.com
>
> Visit the MoPo Mailing List Web Site at www.filmfan.com
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