Are 15% Buyers Fees at Auctions Too High?

dragon

Do you feel that the current going rate of 15% tacked onto the final bid in most major auctions is out of line? I can remember when the industry standard was 10% and it didn't seem like any major auction firms were exactly starving at that time.

BTW....Does anyone know who was the first major auction firm to raise the bar to 15% ??

dragon

nwcs

I generally refuse to buy anything at an auction that charges a buyers fee.

RotatedRainbows

Yes it is too high, I don't know who the first was but it probably resulted from the crash of coin prices in the late 80's. Since 65 Morgans no longer bring $400+ and 65 Saints no longer bring $2000+ (yet it still costs the same or more to list them in auctions) they had to do something to help cover the cost of running an auction.

mercurynut

I have stopped bidding on auctions because of the 15% fee.

CalGold

The buyer's fee is just a way for the auction house to charge the SELLER more for their auction services. The buyer does not really pay any extra charge for the coin because he figures the 15% into his bid. So if a coin is worth $100, a buyer will bid $87. With the 15% juice he will wind up paying $100.05 for it. But no buyer is going to bid $100 and pay $115 for a $100 coin.


As a result, the Seller gets paid $78.30 ($87 minus the 10% Seller fee). The house makes $21.75 on the sale. Since the Seller's coin was worth $100 and he got $78.30 from the sale, the $21.75 earned by the house really came out of his pocket.

The Buyer's fee does become more of a factor when the house charges on-line bidders 20% compared to 15% for floor bidders, but then again the floor bidders had to pay travel and lodging costs to get to the auction.

CG

MrKelso

Yes 15 % is Highway Robbery

kingmatt

YES! I think 15% is WAY too high a premium to payl.

gmarguli

Just bid 87% (1/1.15) of what you're willing to pay for the coin. No big deal. The only time this doesn't work is when newbies don't figure in the commission.

The thing I don't like is having to pay sales tax for auctions just because a company has some business in this state. I'm at a big disadvantage to other bidders.

leothelyon

What about the buyers who could care less about the fee. The buyers who do, aren't they selling themselves short. How about the dealers, won't they just tack this fee onto their sales? Sounds
like a no-win situation. Has anyone had any success bidding less to compensate the fee?

Leo

bigbadchad777

Yes. TOOOOO much.

Placid

Yes but I figure it into my bid so the seller gets less than they could.
I belive Heritage used to charge the seller 5% and the buyer 10% then changed to seller 0% and buyer 15% in attept to get more coins coming in. But in the end the seller still gets 15% less.

I spend some time trying to figure out how much profit is really in it for a big place like Heritage with paying employee's, building mortgage-rent and it didn't really seem like alot.

If you have 50 full time employee's at $2,000 a month that's $100,000 a month right there.
So to get that much at 15% you would need to sell $700,000 worth of coins every month just to cover paychecks.

Lakesammman

A few years ago it was 10% consignor, 10% buyer. I'm not sure who was the first to change. As noted earlier, just figure it into your bidding.

Auction houses need consignors more than bidders (there are plenty of the later). It's a shell game to make it look like a better deal. If bidders bid 87% of what they want to pay, it's not much of a difference for the seller - maybe 1% difference between the 2 percentage scenarios.

Trime

I am not sure what is a fair return for running a first class auction. There is the cost of gaining the privilege of having access to the venue; cost of cataloging; cost of reviewing the coins on site; cost of running the auction; carrying costs for payment (if advances given to consignors); cost of problem solving ; cost of failure to pay for successful bids, etc. Should this be 7.5%, 10%, 15% , or ?. Should the total cost be borne by seller, buyer, or shared?
I guess the answers come from knowing the profit margin and it's predictability.

ricardouno

I can remember when major coin auction houses did not charge bidders a fee at all. This is not going back to the middle ages either. Perhaps, the change was made around the 1978 to 1981 era. The commission rates for consigning were, however, higher than they are now. Stamp auction firms had charged a buyer's fee for decades but somehow coin auction firms did not go along with this practice until the late 1970's or very early 1980's. It should be noted that consigment fees in coin auctions have come way down since then. I recently gave a small consigment to Heritage and another to Bowers and Merena and was charged only 5%. My impression is that a 0% sellers commission could be negotiated for more significant holdings. To lend some perspective, I recently consigned movie memorabilia to a major memorabilia auction firm and was charged a 15% consignor's fee and there was a 15% bidder's fee in that auction as well. So I think the standard major (non-coin) auction firms are likely operating on a higher margin. I realize that some bidders adjust their bids to account for the buyer's premium or the "juice". However, as a consignor it is nice to receive a check that closely resembles the final auction value, even though this might be a placebo effect so to speak.

Conder101

Like Ricardouno I remember when the commission rate was 5% seller 0% buyer for the industry in general. then it went to 10/0%, and then 15/0%. When they did 20/0% briefly the consignors dried up and the 10/10% became standard. Some houses went to a 10/15% and lately I have seen some 5/15% and now we have Heritage doing a 20% sellers on internet auctions. (Sellers commissions have always been negotiatible depending upon the size and value of the consignment.)

flaminio

What Greg said. Buyer's fees are irrelevant, whether they're 10, 15, 20%, whatever. Just adjust your bidding appropriately so that you pay what you want to pay.

NBSQLGeek

Charging a buyer is greedy, I will never buy if they have a buyers fee.

Spooly

Auction fees are fine, but you better get something in return. A long time ago Heritage had the best pictures! Now you get is a crappy picture..... and have to wait 45 days to get your money. "Heritage has strong buyers" well maybe if you get good images of the coins! Crappy pictures = Crappy Bids

jdimmick

I figure in the buyers premium when I am bidding, as I think most people do. Secondly, I only make serious bidding attempts on material that I have to have or really and truly want with exceptional eye-appeal. ( Ex: things that dont come around on the market that often)


I mentioned this to Heritage one time, about the 15% buyers premium being a little harsh for cosigners,when I inquired about entering a few pieces into a signature sale. They replied that most buyers pay no attention to the buyers fee, and bid strong irregardless.

I find that hard to believe, with the exception being on high end super-star pieces, pedigreed stuff, etc.

Thats why I have not cosigned any pieces with an auction house to this date, I have actually had very-good luck in the past selling key-dates I have upgraded on E-bay, with strong buyer intrest in most cases.

Dave99B

I have no problem with it myself. Just be sure and consider it when you bid.

Dave

Ogden

I would be ok with it if the purchase price was right. Sometimes if you want a coin you can't get anywhere else you have to be willing to pay the freight. Most of the time I will not pay the premium, but it depends on the coin and how bad I want it.

Ogden

BillJones

I really hate the 15 buyers' fee. As a point of information one of the principle owners of the company that is leading the industry in pushing up buyers' fees introduced them to the coin auction industry over 20 years ago. It's a shame that every other firm has found it attractive to follow his lead.

DMWJR

Here's where I think the rubber hits the road. In real estate, it is ALWAYS implied that a real estate agent is working for the Seller. The agent charges a fee to the seller for this service. It is unethical for the same real estate agent to charge the Seller a fee and then charge the buyer a fee on top of this. The agent in this situation is not really performing a service to the buyer, but is charging him a fee anyway. There has been a lot of litigation over this, but I have not researched it for this thread (obviously!).

When a Seller of a coin consigns a coin for auction, he expects the auction to bring what the highest buyer will pay, less the commission fees the Seller has agreed to pay for this service. When an Auctioneer charges a Buyer's fee to the buyer, the Auctioneer has reduced "what the highest buyer will pay." Several of you have described this in this very thread. When you take the Buyer's fee into consideration, that is what you are doing. Therefore, the Seller is really paying a double fee on the auction if it costs 15% to sell, and the buyer pays 15% to buy. That's 30% cost really paid by the Seller, not the Buyer.

The Buyer NEVER really pays a fee.