Another way to look at the BP is that it is a convenience fee.
I understand the whole "taking the BP into your final bidding price" thing....but at the same time, if a coin is worth $1,000 I have to ask myself how long it would take for me to find the same or similar coin....how much driving would I have to do....how much time would I have to spend....will it be as easier and cheap for me to find a similar coin with a few strokes of a keyboard ?
I'm all for being price-consicous and yet at the same time I realize there are times when paying the premium, even if tacked on 100% to a hammer price that matches or exceeds FMV, is often worth it.
@GoldFinger1969
I understand the whole "taking the BP into your final bidding price" thing....but at the same time, if a coin is worth $1,000 I have to ask myself how long it would take for me to find the same or similar coin....how much driving would I have to do....how much time would I have to spend....will it be as easier and cheap for me to find a similar coin with a few strokes of a keyboard ?
Yup. You’ve touched on classic economic theory. Stigler observed that buyers who search more find better deals, but searching itself has a cost (time, effort, opportunity cost). This is why “one price” markets are rare in practice; dispersion persists because eliminating it entirely would require costless search.
This also is why middlemen emerge (think Amazon) to shrink these costs. It’s often advantageous for buyers to pay a premium to middlemen in order to reduce friction elsewhere.
@cinque1543 said:
the fee (premium) is 22%. Ouch. Is this normal?
I cannot say it's "normal", but it is certainly very elevated, in my opinion.
Edited to add: The amount I purchase from Heritage auctions has substantially decreased in recent years, although their ever-increasing BP is not the sole reason. My purchases from "other" auctions has proportionally increased.
CNG has been at 22.5% for ancient coins in their auctions for quite a few years (25% for phone bids for technophobes). Many big European firms that I have bid on 12 Caesar coins are over 20% plus cultural commission fees and a 6 month wait to get the coin, so I try to use them as a last resort.
For higher priced coins $10K or above is it better to still go through Heritage auction? Has there been private sales on this forum at relatively higher prices?
I believe the online auctioneers would make more money if they adopted the Bring A Trailer auction method. The auction clock resets to 2:00 minutes after the last bid with 2 minutes remaining. It ends the sniping and allows for an auction to go on as long as there are two bidders. Clearly, this is for online only auctions.
@chickenlegs said:
For higher priced coins $10K or above is it better to still go through Heritage auction? Has there been private sales on this forum at relatively higher prices?
there was the 1945 V75 age issues that were being flipped on this forum for just under 10k each
@GoldFinger1969 said: Another way to look at the BP is that it is a convenience fee.
I understand the whole "taking the BP into your final bidding price" thing....but at the same time, if a coin is worth $1,000 I have to ask myself how long it would take for me to find the same or similar coin....how much driving would I have to do....how much time would I have to spend....will it be as easier and cheap for me to find a similar coin with a few strokes of a keyboard ?
I'm all for being price-consicous and yet at the same time I realize there are times when paying the premium, even if tacked on 100% to a hammer price that matches or exceeds FMV, is often worth it.
How would your above factors for deciding how much to spend be any differerent in an auction with no BP or a lower BP?
Do you think coins would sell for a lower total in a no-BP auction? Or would you refuse to pay as much if the competition drove it to the same total price in your example just because there was not a buyer's premium?
"To Be Esteemed Be Useful" - 1792 Birch Cent --- "I personally think we developed language because of our deep need to complain." - Lily Tomlin
Accounting for a buyer's premium isn't any different than accounting for shipping or salaries for employees or for whatever profit the seller is making on the sale when deciding how much to pay- at the end of the day, the cost is the cost. Personally, I don't care how or to what the seller chooses to allocate that money but I recognize that where those dollars go is important to some people.
I’d rather buy a nicer coin with less premium than a lower grade with a higher premium. Now it’s almost easier to go on the S and B website, go to Stacks Marketplace, make an offer, and bypass the BP altogether. Picked up a few nice coins recently doing that.
@DeepCoin2 said:
I believe the online auctioneers would make more money if they adopted the Bring A Trailer auction method. The auction clock resets to 2:00 minutes after the last bid with 2 minutes remaining. It ends the sniping and allows for an auction to go on as long as there are two bidders. Clearly, this is for online only auctions.
Comments
Another way to look at the BP is that it is a convenience fee.
I understand the whole "taking the BP into your final bidding price" thing....but at the same time, if a coin is worth $1,000 I have to ask myself how long it would take for me to find the same or similar coin....how much driving would I have to do....how much time would I have to spend....will it be as easier and cheap for me to find a similar coin with a few strokes of a keyboard ?
I'm all for being price-consicous and yet at the same time I realize there are times when paying the premium, even if tacked on 100% to a hammer price that matches or exceeds FMV, is often worth it.
Yup. You’ve touched on classic economic theory. Stigler observed that buyers who search more find better deals, but searching itself has a cost (time, effort, opportunity cost). This is why “one price” markets are rare in practice; dispersion persists because eliminating it entirely would require costless search.
This also is why middlemen emerge (think Amazon) to shrink these costs. It’s often advantageous for buyers to pay a premium to middlemen in order to reduce friction elsewhere.
CNG has been at 22.5% for ancient coins in their auctions for quite a few years (25% for phone bids for technophobes). Many big European firms that I have bid on 12 Caesar coins are over 20% plus cultural commission fees and a 6 month wait to get the coin, so I try to use them as a last resort.
For higher priced coins $10K or above is it better to still go through Heritage auction? Has there been private sales on this forum at relatively higher prices?
I believe the online auctioneers would make more money if they adopted the Bring A Trailer auction method. The auction clock resets to 2:00 minutes after the last bid with 2 minutes remaining. It ends the sniping and allows for an auction to go on as long as there are two bidders. Clearly, this is for online only auctions.
there was the 1945 V75 age issues that were being flipped on this forum for just under 10k each
How would your above factors for deciding how much to spend be any differerent in an auction with no BP or a lower BP?
Do you think coins would sell for a lower total in a no-BP auction? Or would you refuse to pay as much if the competition drove it to the same total price in your example just because there was not a buyer's premium?
"To Be Esteemed Be Useful" - 1792 Birch Cent --- "I personally think we developed language because of our deep need to complain." - Lily Tomlin
Accounting for a buyer's premium isn't any different than accounting for shipping or salaries for employees or for whatever profit the seller is making on the sale when deciding how much to pay- at the end of the day, the cost is the cost. Personally, I don't care how or to what the seller chooses to allocate that money but I recognize that where those dollars go is important to some people.
I try factor in the juice in my bidding but the reality is other bidders may ratchet it way up.
However whatever I win just mark them up accordingly. If players want them bad enough they will pay the money.
I’d rather buy a nicer coin with less premium than a lower grade with a higher premium. Now it’s almost easier to go on the S and B website, go to Stacks Marketplace, make an offer, and bypass the BP altogether. Picked up a few nice coins recently doing that.
DLRC auctions allow for extending bidding if a closing bid comes in during the final 5 minutes.
"She comes out of the sun in a silk dress,
running like a water color in the rain...."