Auction Buyers Fees

Hi everyone,

I just wanted to get your opinion on Auction Buyers Fees . Do you think paying 20% or more for the right to buy reasonable..?
How about the auction house having the right to disqualify you even after you won the item -- at their discretion.
How about requireing you to provide two Numismatic references even though your paying by cashier's check or Money Order.


Let's move this scenario. You go to the grocery store. When you get to the door to go in they tell you that you have to tell them two other grocery stores that you shop at before you can shop at theirs. Before they let you in they make you give them a credit card number and tell them how you intend to pay. You pick up a can of beans and take it to the check out counter. The clerk charges you 20% more that the can is marked. Or tells you you can't buy it. Why..? because he/she doesn't want you to have it. Or they check you out and you pay for the item and start walking for the door. The clerk runs up to your bag, grabs the beans and tells you he/she decided that they weren't goin to sell the beans to you.

Let me hear some feedback folks.

catman

 

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Sounds like beans to me!!!! I totally disagree with Buyers Fees all together. I mean , come on, they are already getting a fair commission on the sale, and then turning around and trying to get a commision from the buyer as well? Where do I sign up?

I might go with a small registration fee, if I absolutely knew that there was something there that I was truly interested in, but it would nothing to do with a percentage of my bids.

 

I think I would be buying more from the local coin store and attending more coin shows to buy my coins.
coinsngolf

 

Buyers fee, sellers fee, it's only a name. The bottom line is that they are simply creatively boosting the fees charged and telling the buyer and seller that they are each paying a different fee. For example, if you win an item with a $100 bid, they can charge the seller 20% and the buyer 20%. The buyer ends up paying $120, the seller gets $80, the auction gets $40, or a third (33.3%) of the $120 paid. Another way to look at it, the auction gets 50% of what the seller got.

These guys could work for Enron....

 

I can see why you would do that..! I was looking on Ebay and they had about 5 pages of coins that was linked to a live auction by Hertiage. After reading the terms and conditions I realized that it wasn't worth my time or consideration to buy anything that they were offering.

catman

 

I never even bother to look at the live auction items for just that reason.

 

The listings by Heritage, or other live auctions, should be listed in a whole other area. Having to scroll thru 3 pages of their coins to find something I can bid on is ridiculous.

I won't go to auctions where you have to pay a buyers premium. What is the point of paying for the benefit of buying. If it was a set price that you were buying something for, like a members warehouse, that is one thing, but an auction is totally different.

 

The 20% "Buyer's Premium" takes the investment potential out of all but the high end rare coins. It takes a long time for many or even most coins to appreciate 20% above the purchase price, even longer to be able to make a profit down the road since any selling fees would be on top of the premium plus sales price.

Dealers must be doubly frustrated by the Buyer's Premium since they wouldn't be able to sell any auction-purchased coin at anywhere near "book value" within the reasonable since they probably had to bid near book value to obtain the coin. Thinking on it, why would any dealer want to buy any coin at auction unless he was shopping for a client?

Heritage Galleries is presently conducting an auction and is offering a lot of very attractive coins... but the premium is putting me off. While I'm a collector first and an investor second and I don't mind paying top dollar for a coin if I want it badly enough, I want to be able to maintain the option to sell any coins in the instance I need fast cash. I certainly don't want to lose money on my purchase. More specifically, I don't want to lose a LOT of money if I sell a coin.

 

I suspect that most, if not all, of the people posting to this thread have never participated in an art, furniture, or other commercial auction. I have, many times over several decades.

Buyer's premiums are commonplace at such auctions, and careful buyers determine their maximum bid by discounting for the premium. For example, the auction has a 15% buyer's premium, and the most I am willing to pay for Lot #X is $200. I divide 200 by 1.15 and get $173.91, so I stop bidding if the price goes over $174. (If there is sales tax to be paid, I discount my top bid for that too, so that any time I am high bidder, I'm paying a price I'm comfortable with.)

How you describe the fees Is all window dressing anyhow. Economically it makes no difference whether the auctioneer

• charges the seller 25% of the hammer price with no buyer's fee
• charges the buyer 25% of the hammer price with no fee to the seller, or
• charges each one 12.5% or some variation totalling 25%.

In each case the auctioneer gets 25¢ on the dollar, the seller gets 75¢ on the dollar, and if the buyer was paying attention, and discounted the bid when there is a buyer's fee, he/she pays 100¢ on the dollar.

If you keep getting outbid when you factor in the charges, it just means that someone else wanted the item more than you did, so get a life.

An auction where there are knowledgeable bidders is not a good place to buy for "investment" anyhow. You usually can't "buy low" when there are others who know the difference between "low" and "high" for the item on the block.

When the buyer pays more, it's because he/she bought the "sizzle" instead of the "meat". In the grip of auction fever, buyers will sometimes keep bidding as long as the hammer price is in their range, ignoring buyer's fees, sales tax, and even shipping on large items. That's just as stupid as ignoring excessive S/H when buying online.

 

I have attended auctions for the better part of 20 years also and the auctions that require buyer premiums are typically high end estate type auctions. I stay more to real estate, farm and antique / collectable type auctions where there are no buyer costs.

You are corect in saying that all upfront costs should be considered in deciding what the max price you will pay is going to be. That is the way I have always done it myself. But, I would rather put $100 towards a coin, then $80 to the coin and $20 towards commission / shipping even though either way the end price is $100.

 

It really don't matter. However if you don't like the pratice don't buy from them or particapate. The market will dictate the survival.

catman