Is a 22.5% Buyer Premium excessive for auctions?

wildjag

I was looking at a few auctions on Ebay, such as this one,
and I was shocked to see how much of a buyers premium they are charging. Not to mention that they don't take Paypal and charge local taxes as well.

I thought Heritage (15%) and Teletrade (12%)were high enough already
Is it just me who feels this way or is it normal?

ROBERTB

That's just plain ridiculous!

AuldFartte

No, it's not just you. The fee structures for recent auctions are ridiculous

lordmarcovan

When I first read your title, I thought you said 2.5%, which sounded quite reasonable.

22.5% is highway robbery.

lordmarcovan

I always skip those auctions with the little "paddle" icon, anyway. Too much hassle.

Now I see what the paddles are for- to spank their buyers on the arse for bein' dumb.

gxseries

So much for ridicious fees. They must have added all those lame ebay auction fees etc.

JamminJ

Just one more thing to factor into your bid, if any.

Silvereagle82

I think 10-12% is fair. I've been bidding on some the European auctions which most are are 18-20% ( most provide free auction catalogs).
That is as high as I go. No 20+ % auctions for me.

wildjag

<< <i>Just one more thing to factor into your bid, if any. >>



Well say I won the coin at $600 + $135 buyers fee + $47.75 local tax = $782.75 + shipping and postage, which may or not bury you with the coin.

If I was a consignor, I wouldn't be happy either since those fees are coming out of your pocket instead of getting higher bids.



<< <i> I always skip those auctions with the little "paddle" icon, anyway. Too much hassle. >>



I normally do too until I see a coin I am interested in

cacheman

It's coming up on 40% with German auctions when you figure in their 15% juice, bank fees, shipping/handling fees, additional credit card fees if you use plastic and then the 20% loss on each dollar for conversion from Euro's...

wybrit

Is a 22.5% Buyer Premium excessive for auctions?

Absolutely. Factor it into your bid.

Those who don't understand how economics works always try to push that % take envelope. Result: in the long run bids are lower and the only guy who gets the shaft is the coin owner who is selling the piece. If I were wishing to sell my collection, I would not use an auction house that charges that high of a premium.

By the way, 20% is standard for Heritage and Goldberg on ebay auctions. You only get the 15% BP if you bid via their site or by mail.

Silvereagle82

<< <i>It's coming up on 40% with German auctions when you figure in their 15% juice, bank fees, shipping/handling fees, additional credit card fees if you use plastic and then the 20% loss on each dollar for conversion from Euro's... >>



The price you pay to go where all the "real" goods are!!!!

nicholasz219

The other factor in economics is how price will affect demand as well. With a fee structure that ridiculous, there is no way I would purchase that coin from that seller. I get irritated enough when I am buying on Ebay and get sucked into looking at a coin with a low start price only to see the prison raping they are going to do to me when I pay for shipping and handling for the coin. I refuse to pay $5 on a $5 coin.

If I were the seller I would avoid those auction houses as well Wybrit, and I definitely would not be a buyer through them either. Tradition of buyer's fees or not, 22.5% is total insanity.

Nick

Aethelred

In my opinion 22.5% is nothing short of absurd!

JamminJ

<< <i>If I was a consignor, I wouldn't be happy either since those fees are coming out of your pocket instead of getting higher bids. >>



It's quite possible the consignor, especially if he's a big one, is getting more than 100% of hammer.

wybrit

It's quite possible the consignor, especially if he's a big one, is getting more than 100% of hammer.

Now that is a possibility. Good point.

That still doesn't convince me that it's the best way to go, though.

Consider a $1,000 coin. With a 15% BP at Heritage, that would ring up as approximately $1170 including shipping. I don't know if the consignor gets 100% or not, but let's assume that for simplicity - $1,000 in his pocket.

Now the same coin sells at 22.5%, but if the buyer is shrewd and factors in a higher BP, the hammer price is only $939. The consignor would have to get over 106% of the hammer price to net the same result. Not only that, 5% of that BP goes to ebay right off of the top - they would get $47, so there's only $103 of excess left to play with.

There are a lot of assumptions here, but I still think the higher BP ought to scare off the potential seller.

AndyNC2005

I was under the impression that there was a fee on both ends (buyer and seller). Is this not true? Andy

wybrit

I was under the impression that there was a fee on both ends (buyer and seller). Is this not true?

It probably is true. I have not worked on the selling end with an auction house so have not been interested in finding out yet.

JamminJ

I think 22% is excessive myself.

That being said, as a buyer I really only care about one thing: the price after all the assorted overhead, tax, BP, shipping, cc fees, graft, whatever. Similarly, as a seller I only care about how much I net after everyone else takes their cut.

If these guys are really out of line you'd think they'll be forced to change their fee structure. Then again, people seem to bid through e-bay and pay an extra 5% so maybe they'll do just fine praying on the ignorant or price insensitive.

Udo

22,5 % that's a damn high premium.

In Germany the auction houses usually take 15% from both consignor and buyer, i.e. the auction hous gets 30 % of the hammer price.
In the majority of cases 7% sales tax are added to the Hammer price and premium. (only a few gold coins are taxfree)

Example for a coin with a hammer price of 100 Euro.


Consignor gets: 100 - 15 (15% fee) = 85 Euro

Buyer has to pay: 100 + 15 (15% premium) + 8,05 (7 % sales tax) = 123,05 Euro + shipping charges

The auction house makes: 15 +15 (fees from consignor and buyers premium) = 30 Euro


The premiums of some auction houses vary, so it's possible that the consignor has to pay a lower fee but the buyer has to pay a higher fee instead.

One good thing for foreign bidders is that they don't have to pay the sales tax, but on the other hand they usually have to pay very high shipping rates.

docday2003

<< <i>22,5 % that's a damn high premium.

In Germany the auction houses usually take 15% from both consignor and buyer, i.e. the auction hous gets 30 % of the hammer price.
In the majority of cases 7% sales tax are added to the Hammer price and premium. (only a few gold coins are taxfree)

Example for a coin with a hammer price of 100 Euro.


Consignor gets: 100 - 15 (15% fee) = 85 Euro

Buyer has to pay: 100 + 15 (15% premium) + 8,05 (7 % sales tax) = 123,05 Euro + shipping charges

The auction house makes: 15 +15 (fees from consignor and buyers premium) = 30 Euro


The premiums of some auction houses vary, so it's possible that the consignor has to pay a lower fee but the buyer has to pay a higher fee instead.

One good thing for foreign bidders is that they don't have to pay the sales tax, but on the other hand they usually have to pay very high shipping rates. >>



and if you import into Canada, you end up paying the high shipping, and 7-15% local taxes as well!

CIVITAS

I'm with James. All I want to know is the bottom line. If you want $100.00 for your coin, or $1.00 + $99.00 service charge or $50.00 + 100% buyer's fee, I really don't care. As long as I'm willing to pay $100.00, I'm in.

SYRACUSIAN

Buyer has to pay: 100 + 15 (15% premium) + 8,05 (7 % sales tax) = 123,05 Euro + shipping charges




Udo,

the 7% you refer to, is I suppose the VAT for foreign buyers. You forgot to add 2.5% (I think) if you pay by credit card which brings the total of German and Swiss auction houses to ~25%. How on earth can someone get a good deal with such percentages and with starting prices near retail?