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Would removing the BUYER premium rejuvenate the entire coin market?

topstuftopstuf Posts: 14,803 ✭✭✭✭✭

From real estate to almost everything else, a ...seller... knows and expects a cost of selling.

A buyer, whether he considers the price to include some cost to him seems, to me, to be less inclined to buy if, in addition to the price, someone is charging him to buy.

Motivation is different for buyers or sellers. Buyers are less likely to "need" to buy. Also, the seller stands to possibly profit after time. A seller selling for need has less choice.

So...would making all costs go on the seller attract more buyers?

???

Would removing the BUYER premium rejuvenate the entire coin market?

This is a private poll: no-one will see what you voted for.
«134567

Comments

  • SmudgeSmudge Posts: 9,208 ✭✭✭✭✭

    That brings up a question. When you look in Confacts auctions and see that a coin sold in a Heritage auction for say $1000. Does that include the 20% bp or did the buyer pay $1200? I should know this and hopefully will soon. Thanks.

  • jdimmickjdimmick Posts: 9,583 ✭✭✭✭✭

    I Just purchased an note for a customer out of the heritage sale. The buyers premium on this was near 5k, plus they charged like 85 in shipping/handling. Its money that is literally lost forever IMO. He might possibly recoup the original hammer one day when he decides to sell it, but BP never

  • MattTheRileyMattTheRiley Posts: 806 ✭✭✭✭

    But then, how would the auction houses make any money?! 😄

  • MasonGMasonG Posts: 6,268 ✭✭✭✭✭

    @thebigeng said:
    I think a reduction in both buyer and seller fees across the board would do the trick.

    There isn't anything stopping anyone from doing that, is there?

  • TommyTypeTommyType Posts: 4,586 ✭✭✭✭✭

    I answered "No", under the assumption that the auction company would just shift their profit margin to the seller, and the net that buyer and seller pay/receive would be mostly unchanged. (Unless you are suggesting the auction companies will somehow be required to work for less commission than they had in the past....which I think they will fight you on. :) )

    The buyer would pay roughly the same amount they are paying now, since any logical bidder already backs out the BP when they bid...they would just stop doing that!

    So, you might change the overall math, by the end result would be the same.

    Easily distracted Type Collector
  • BillDugan1959BillDugan1959 Posts: 3,821 ✭✭✭✭✭

    If coin prices/values were still constantly increasing at a nice clip, nobody would care as much.

    The demand for numismatic coins has to improve considerably to actually change things.

    More collectors are needed, more collectors who view coins as desirable historic artifacts.

    Of course, buyer's premiums have escalated a lot, even as the market has gone in the potty.

  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭

    That's what I'm asking. Would more collectors go to auctions if they didn't have to calculate and "back out" bids?

  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭

    Lemme word it differently:

    Would no buyer premium at auctions improve the interest of ANYONE?

  • BillDugan1959BillDugan1959 Posts: 3,821 ✭✭✭✭✭

    Zero percentage would cause some additional business, but you used the word "rejuvenate"...

    What percentage of the coins swershing around the greater marketplace ever pass through the major auction houses?

  • jmlanzafjmlanzaf Posts: 31,618 ✭✭✭✭✭

    @BillDugan1959 said:
    The buyers premiums aren't the big factor. Cost is not the big factor. The big factor is that there is a lack of interest in history which translates into a disregard for historic artifacts.

    Electronic gadgets have sucked up the attention span of the younger folks. This forum is one manifestation of how electronic mediums suck up people's attention span.

    I guess we resemble that remark

  • jmlanzafjmlanzaf Posts: 31,618 ✭✭✭✭✭
    edited August 23, 2019 10:57PM

    @topstuf said:
    Lemme word it differently:

    Would no buyer premium at auctions improve the interest of ANYONE?

    It probably would because they BP might well confuse some people and get ignored by some people. But it really shouldn't affect anything. It is not a hidden fee. Most of the major houses actually calculate it for you and show it to you when you place an online bid.

    We've had this discussion a couple times before. I will just say "ditto" to whatever I said previously.

  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    edited August 23, 2019 11:35PM

    Question for the lawyers:

    We know that auction firms cannot legally collude to raise commission rates, but could they legally agree to simultaneously reduce their BPs to zero?

    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • cameonut2011cameonut2011 Posts: 10,060 ✭✭✭✭✭

    @topstuf said:
    Lemme word it differently:

    Would no buyer premium at auctions improve the interest of ANYONE?

    No.

  • cameonut2011cameonut2011 Posts: 10,060 ✭✭✭✭✭

    @cameonut2011 said:

    @topstuf said:
    Lemme word it differently:

    Would no buyer premium at auctions improve the interest of ANYONE?

    No.

    To explain my reasoning, the buyer's premium would merely be renamed to something else.

  • winestevenwinesteven Posts: 4,008 ✭✭✭✭✭

    As many of you know, not only eBay, but DLRC (David Lawrence Rare Coins) use the business model suggested by @topstuf.

    A day without fine wine and working on your coin collection is like a day without sunshine!!!

    My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
    https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
  • rickoricko Posts: 98,724 ✭✭✭✭✭

    It would not rejuvenate the entire coin market, however, it would certainly energize the auction segment. Cheers, RickO

  • SmudgeSmudge Posts: 9,208 ✭✭✭✭✭

    @topstuf said:

    @Smudge said:
    That brings up a question. When you look in Confacts auctions and see that a coin sold in a Heritage auction for say $1000. Does that include the 20% bp or did the buyer pay $1200? I should know this and hopefully will soon. Thanks.

    Heritage price realized shows BP included in the Coinfacts search.

    Thanks.

  • ARCOARCO Posts: 4,305 ✭✭✭✭✭

    @topstuf said:
    Lemme word it differently:

    Would no buyer premium at auctions improve the interest of ANYONE?

    Am I in the twilight zone here reading comments? OF COURSE IT WOULD. Everyone would be interested. No one would be disinterested. Crazy comments here. I guesss collectors enjoy the guaranteed transaction cost of a 20% auction fee?

    Rejuvenate? It sure the hell would for me. I thought I knew you people. :)

  • 7Jaguars7Jaguars Posts: 7,228 ✭✭✭✭✭

    I think it ridiculous to say that there would be NO effect. I know that extra added kick in the teeth goes into my thinking and not only decreased my bids but also leaves just that little bit of sour taste in my mouth as I think that my jut purchased lot at, say $3200, is really bought at $3900+. So not as much bidding excitement for many reasons.
    I would not realistically expect them drop the "juice", but even a drop to 12% or so would be an improvement.

    Love that Milled British (1830-1960)
    Well, just Love coins, period.
  • TradesWithChopsTradesWithChops Posts: 640 ✭✭✭✭

    Lower buyer/seller premiums may bring more coins to market. It wouldn't change the buyers though. I dont know of anyone who doesnt factor costs in when buying coins. All it does is change how much money the sellers realize.

    Minor Variety Trade dollar's with chop marks set:
    More Than It's Chopped Up To Be

  • TradesWithChopsTradesWithChops Posts: 640 ✭✭✭✭

    @ARCO said:

    @topstuf said:
    Lemme word it differently:

    Would no buyer premium at auctions improve the interest of ANYONE?

    Am I in the twilight zone here reading comments? OF COURSE IT WOULD. Everyone would be interested. No one would be disinterested. Crazy comments here. I guesss collectors enjoy the guaranteed transaction cost of a 20% auction fee?

    Rejuvenate? It sure the hell would for me. I thought I knew you people. :)

    Perhaps you are.

    If every single selling venue had the same fees, then yes it would. Otherwise, HOW DOES IT ?! Nearly all coins are widgets. You can buy them from one place or another. You can choose places with higher fees or lower fees. But guess what? The price is probably nearly the same.

    Fees affect sellers. Even a "buyers fee" is really not. It's an additional fee on the seller

    Minor Variety Trade dollar's with chop marks set:
    More Than It's Chopped Up To Be

  • CoinstartledCoinstartled Posts: 10,135 ✭✭✭✭✭
    edited August 24, 2019 7:02AM

    Still much confusion here as to who is paying the buyer fee. It is the seller, but at the least, the added fee adds confusion and chaos to the auction process and I suspect by design.

    I suppose is the intent is to entice the unsophisticated consignor with the prospect of selling fee free. Maybe I was that guy 15 years ago when I sold a pricey coin which I realize now would be worthy of a percentage of hammer as well. Didn't occur top me at the time as there was no seller fee.

    At any rate...that is the last auction coin they got from me.

  • MasonGMasonG Posts: 6,268 ✭✭✭✭✭

    @topstuf said:
    A buyer, whether he considers the price to include some cost to him seems, to me, to be less inclined to buy if, in addition to the price, someone is charging him to buy.

    A buyer who pays a total of $1,000 (including a 20% buyer's fee) for a coin now would only be willing to pay $833 for it without the fee? I don't see that happening.

  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭

    @ARCO said:

    @topstuf said:
    Lemme word it differently:

    Would no buyer premium at auctions improve the interest of ANYONE?

    Am I in the twilight zone here reading comments? OF COURSE IT WOULD. Everyone would be interested. No one would be disinterested. Crazy comments here. I guesss collectors enjoy the guaranteed transaction cost of a 20% auction fee?

    Rejuvenate? It sure the hell would for me. I thought I knew you people. :)

    Exactly !! I don't know how my OP got construed as a request to comment on current market and demographic trends.
    I am fully aware of the declining interest in history and to some degree....coin collecting.
    I was simply suggesting a ...new.... approach to simplifying the decision process for those who MAY be developing interest in our hobby but are a bit "put off" with complicating acquisition procedures.

    :)

    Also, as @winesteven pointed out, David Lawrence is already doing it. <3

  • johnny9434johnny9434 Posts: 27,412 ✭✭✭✭✭

    id say that a good reduction on fees on both sides would be justified. they have to make a few bucks somewhere, jmo

  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭

    Sure. Catalogs and promotion is good for everyone. The trick right now is to get NEW collectors and simplifying the process of collecting has to be a good thing.
    I'd like to see it be before there is a mass exodus. :)

  • ARCOARCO Posts: 4,305 ✭✭✭✭✭
    edited August 24, 2019 8:45AM

    @TradesWithChops said:

    Perhaps you are.

    If every single selling venue had the same fees, then yes it would. Otherwise, HOW DOES IT ?! Nearly all coins are widgets. You can buy them from one place or another. You can choose places with higher fees or lower fees. But guess what? The price is probably nearly the same.

    Fees affect sellers. Even a "buyers fee" is really not. It's an additional fee on the seller

    Yes, auction fees affect sellers. All sellers are first buyers. The buy side equation changes if the sell side equation changes. Does that not seem evident to you? The buy prices may not change, but who knows how many collectors have exited the hobby because coins are a bad financially (when you factor the transaction costs of selling)

    I used to buy $500-$1500 coins frequently. I no longer buy $500-$1500 coins because I cannot sell them without taking a 20% loss in most cases. If I could at least break even on $500-$1500 coins, I would continue to buy.

    How do you sell coins, widgets or what not? Ebay, you lose 9.10% at best and GC /Stacks / Heritage 15-20%. Dealers won't pay what you paid to buy the widget so please explain to me how lower transaction costs wouldn't help the hobby.

  • ms70ms70 Posts: 13,946 ✭✭✭✭✭
    edited August 24, 2019 8:47AM

    @MattTheRiley said:
    But then, how would the auction houses make any money?! 😄

    By choking the seller with the seller's premium. In fact, they already are.

    Great transactions with oih82w8, JasonGaming, Moose1913.

  • MasonGMasonG Posts: 6,268 ✭✭✭✭✭

    @ARCO said:
    How do you sell coins, widgets or what not? Ebay, you lose 9.10% at best and GC /Stacks / Heritage 15-20%. Dealers won't pay what you paid to buy the widget so please explain to me how lower transaction costs wouldn't help the hobby.

    You're not required to use eBay, GC /Stacks / Heritage or dealers to sell your coins. If you don't want to pay the costs associated with doing so, you are free to cut out the middleman and sell directly to collectors.

  • BAJJERFANBAJJERFAN Posts: 30,977 ✭✭✭✭✭
    edited August 24, 2019 11:27AM

    @MasonG said:

    @topstuf said:
    A buyer, whether he considers the price to include some cost to him seems, to me, to be less inclined to buy if, in addition to the price, someone is charging him to buy.

    A buyer who pays a total of $1,000 (including a 20% buyer's fee) for a coin now would only be willing to pay $833 for it without the fee? I don't see that happening.

    If the coin is truly worth the $1000 then somebody will probably run it up to that BP or not. Buyers pay it, but sellers bear the cost.

  • BAJJERFANBAJJERFAN Posts: 30,977 ✭✭✭✭✭

    @MattTheRiley said:
    But then, how would the auction houses make any money?! 😄

    IIRC there is a 10% commission which likely doesn't cover the cost plus allow for a reasonable profit. Instead of 20% BP they could just call it 30% commish. I think that psychologically the seller is less turned off by 10% commish and 20% BP than by 30% commish, in the same way that $99.99 is often used instead of $100.00

  • jonrunsjonruns Posts: 1,196 ✭✭✭✭✭

    NO...to me "rejuvenate" means bringing new buyers to the market...I don't think this will happen just by eliminating the BP at coin auctions...people who have no interest in coins aren't going to suddenly start buying them because they are 20% "less expensive"...

  • ZoinsZoins Posts: 33,811 ✭✭✭✭✭
    edited August 24, 2019 11:41AM

    I think removing the BP would bring new buyers into the market because a BP is not used in most markets and it's complicated to explain. It's not because the coins would be less expensive, but that the prices would be easier to understand. In general, the buyer shouldn't even need to know about the premium.

    I think the BP is actually used more to let the seller know what they are getting. I think telling sellers they are getting 100% of hammer makes the sellers feel better than telling them they are getting 83% of the realized price (given a 20% BP).

  • ZoinsZoins Posts: 33,811 ✭✭✭✭✭

    Here's one way to look at this.

    Let's say an auction house increases BP from 17.5% to 20% to 25%.

    From a hammer perspective, a seller can make 100% of hammer, 100% of hammer and 100% of hammer. No change.

    However, relative to the prize realized, they are making 85%, 83% and 80%.

  • keetskeets Posts: 25,351 ✭✭✭✭✭

    From real estate to almost everything else, a ...seller... knows and expects a cost of selling.

    with Real Estate the buyer also pays. they pay the lender.

    I think it's too late to change how things work now and it costs quite a bit to put these auctions together and completed. Stack's and Heritage among others are pretty big operations that are in it to make money, if the fees are too high for a collector they always have a choice, but I think expecting a reversal of the current trend isn't going to happen.

  • ms71ms71 Posts: 1,459 ✭✭✭✭✭

    In commerce, coins are decreasing in importance and utility; and they will continue to do so. When I was a kid, coins were your money. A candy bar or a pack of baseball cards cost a nickel. Coins are now a very insignificant facet of a kid's life. In the long term, that doesn't augur well for collecting. The very high-end coins will always be sought after, but the ordinary "stuff" will never again be pursued to the extent that it was in decades past.

    Successful BST transactions: EagleEye, Christos, Proofmorgan,
    Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins

    Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't an optical illusion, it only looks like an optical illusion.

    My mind reader refuses to charge me....
  • ColonelJessupColonelJessup Posts: 6,442 ✭✭✭✭✭
    edited August 24, 2019 1:42PM

    @winesteven said:
    As many of you know, not only eBay, but DLRC (David Lawrence Rare Coins) use the business model suggested by @topstuf.

    That is not a "business model", but a rudimentary pricing mechanism.

    Innumeracy.. tragedy of the masses.... :'(

    Harsh reality.. if you are too stupid, blind or lazy to do simple arithmetic, you deserve to lose money. :*

    My peasant grandmother never knew how to use a checkbook, but she found those little tipping calculation cards easy to understand. Why can't you? (Rhetorical and not directed at @winesteven)

    "People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - Geo. Orwell
  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭

    Holy SImoleons! Did I ever suggest it would COST less?
    I'm thinking only of simplicity like America thrives on nowadays.
    I want to lure the "stupid, blind and lazy" into coin collecting. :D
    (well, MORE of them anyhow) >:)

    Think of the untapped dozens of peasant grandmothers who could start a coin collection. :p

  • PTVETTERPTVETTER Posts: 5,880 ✭✭✭✭✭

    Someone has to pay
    Working for free doesn’t exist
    However some buyers fees are a bit high, maybe!

    Pat Vetter,Mercury Dime registry set,1938 Proof set registry,Pat & BJ Coins:724-325-7211


  • BillJonesBillJones Posts: 33,430 ✭✭✭✭✭
    edited August 24, 2019 2:32PM

    You didn't have the option of lowering it. I was okay with 15%, but things went downhill when it went to 17.5% and kind of got out of control at 20%. Heritage charges 25% for political items. Add to that my local sales taxes and the “over the hammer price” to me is at 33.5% which makes it hard for me to buy anything from them in that field.

    Many dealers push the theory that the level of the buyers’ fee does not matter, and it doesn’t for them. If the bid goes too high after they have broken back their bids for the buyers’ fee they move on.

    For the collector, it’s different. They usually have a much narrower want list. When the right item comes along, that they have been seeking for a long time, the buyers’ fee is less important. Some of them bid as if there is no buyers’ fee. I know. I’ve been up against those people.

    One of my economics professors in undergraduate school explained something about theories. If the theory does not work in practice, then it’s not a valid theory. That’s point I would make to those who say that the buyers’ fee could be 100%, and it wouldn’t matter. Their theory is invalid because it does not work in practice.

    Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
  • MasonGMasonG Posts: 6,268 ✭✭✭✭✭
    edited August 24, 2019 2:42PM

    @BillJones said:
    For the collector, it’s different.

    Well, yeah. Collectors are the end users (read: retail buyers). Dealers are buying in order to resell to the end user, so they can't afford to pay as much as a collector will if they hope to make a profit.

    edited to add...

    Has a 100% buyer's fee ever been tried?

  • coinkatcoinkat Posts: 22,721 ✭✭✭✭✭

    No.

    There are larger issues that have impacted the coin market that may just be beyond correcting in part because few have a vested interest in doing anything about them. Talk is cheap and the arm chair philosophy is like listening to a record with an impassable dig.

    Experience the World through Numismatics...it's more than you can imagine.

  • ZoinsZoins Posts: 33,811 ✭✭✭✭✭

    @MasonG said:
    Has a 100% buyer's fee ever been tried?

    Not sure but it’s been mentioned a few times.

  • MFeldMFeld Posts: 11,921 ✭✭✭✭✭

    @BillJones said:

    For the collector, it’s different. They usually have a much narrower want list. When the right item comes along, that they have been seeking for a long time, the buyers’ fee is less important. Some of them bid as if there is no buyers’ fee. I know. I’ve been up against those people.

    I don’t understand what impact the buyer’s premium has here.

    Either a collector bids with a limit or not. If he does, he can back out the buyer’s premium, when calculating his maximum bid. If he doesn’t set a bid and stick to it, it wont really matter if there’s a buyer’s premium (or the amount of one, if applicable).

    If there is a buyer’s premium, he will be bidding against other bidders, the vast majority of whom lower their hammer bid limits. And if there is no buyer’s premium, he will be bidding against other bidders, who will be bidding higher than they would if there were no buyer’s premium.

    Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.

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