Will Auction Commissions Trend Higher or Lower?

MrEureka

At the top of the last market (1989-90), commission rates were extremely competitive. As the market softened, and as some competitors were weakened - most notably Superior, which was a real force back then - commission rates trended higher. Today, with the market in the vicinity of an all-time high, commission rates are once again extraordinarily competitive. It's tempting to say that history will repeat and that commission rates will head back up as soon as the market weakens. (That's especially true with the loss of ANR.)

On the other hand, price levels are higher now, sales bring much higher gross volumes, and technology has created tremendous efficiencies. These factors clearly point to lower commission rates.

How do you think this will all play out?

dragon

With the advent of PCGS, NGC, and the internet, I feel auction commission rates are altogether too high across the board.

Pistareen

I think if people knew how much work went into that 15-20%, they would cut a bigger check to the auction company, or send cookies or something.

Someday they may be able to teach a computer how to grade, but I doubt they'll be able to train one how to catalogue!

PerryHall

<< <i>With the advent of PCGS, NGC, and the internet, I feel auction commission rates are altogether too high across the board. >>



Especially such viable venues such as eBay and Teletrade.

ziggy29

<< <i>Especially such viable venues such as eBay and Teletrade. >>

Teletrade just went up from 10% to 12% in an era when coin prices were rising considerably faster than inflation.

coinkat

Commissions...

PerryHall

<< <i>

<< <i>Especially such viable venues such as eBay and Teletrade. >>

Teletrade just went up from 10% to 12% in an era when coin prices were rising considerably faster than inflation. >>



It's still less than what the big auction companies charge.

ziggy29

<< <i>

<< <i>

<< <i>Especially such viable venues such as eBay and Teletrade. >>

Teletrade just went up from 10% to 12% in an era when coin prices were rising considerably faster than inflation. >>

It's still less than what the big auction companies charge. >>

I think they have far less overhead, too.

bidask

Jim Halperin in the Dec 25th Coin World wrote an article on the future of the coin market and auctions and commented they are going down!

mozin

I believe the auction commissions are too high. The should be able to lower buyer's fees to 10% and still make a decent profit. Will they? Not unless buyers insist.

prenum

Fewer Auction companies = higher commissons.

The loss of ANR was tragic. Now Superior is being sold. I fear we are instore for more bad news.

This does not look for commisson rates.

cladking

They are probably near a peak and about to trend lower.

Commissions on low priced items could go a little higher a little longer though.

Labor is becoming a lower percentage of costs and most of the costs are labor. Meanwhile
activity is increasing meaning they can spread these costs out over more items.

DennisH

Don:

Thanks for your comments (I think you're right), and welcome to the message boards!

Nic

Commissions are trending down. This will continue. Net profits for the auction houses will still rise for awhile, as coins are still bringing big money. K

robertpr

Today, with the market in the vicinity of an all-time high, commission rates are once again extraordinarily competitive.

Andy, with all due respect, lay off the weed for a while, OK?

MrEureka

Someday they may be able to teach a computer how to grade, but I doubt they'll be able to train one how to catalogue!

The use of stock descriptions is essentially computer-based cataloging. Same goes for the automated use of prior auction prices realized and pop report data.

Barndog

<< <i>Jim Halperin in the Dec 25th Coin World wrote an article on the future of the coin market and auctions and commented they are going down! >>



I don't expect a big Heritage announcement of the drop to 12% anytime soon

MrEureka

I don't expect a big Heritage announcement of the drop to 12% anytime soon

Agreed, but the average seller's fee can decline.

Coxe

<< <i>I think if people knew how much work went into that 15-20%, they would cut a bigger check to the auction company, or send cookies or something.

Someday they may be able to teach a computer how to grade, but I doubt they'll be able to train one how to catalogue! >>



Agreed for the major sales. However, Heritage's online sales and Teletrade come to mind as examples where cataloguing is minimal. They have an engine to feed them into and process bids and payments. The photography is the only speed bump. I cannot see how 15% and 12% in buyer fees (respectively) is aligned with overhead if the market is doing 15% (up from 10%-12% not so many years ago in a lower valuation market) on major sales with glossy well-produced and detailed catalogues, room rentals, floor/internet/phone bidding, lot viewing, mailing, promotion, ... Since coin valuations have generally outpaced inflation for the calibre of coins in the major sales, it is mathematically unjustified to raise the percentage, at least on the surface without regard to perhaps unrecognized factors. I think Heritage would best serve their and their consignors' interests in lowering the online sales commissions to say 8% buyers' fees and 2% sellers' fees. That might pull away coins to them that might have gone to eBay, TT or nowhere at all because the paper gains hadn't covered the present commissions. The real gem there is the potential for better coins to ride on in with the widgets. Just my two cents, which might be worth more or less that amount.

BTW, anyone remember the good old days when TT had 5.5% flat fees on all their gold? That went on for years and was great for buyers and sellers. If they could do that then, why not 10% now (to cover the photography)?

cointagious

As a comparative, in many other segments of collectibles, auction house commissions are 20% to 25% of the hammer.

JZrarities

Auction fees are Way Too High.

The Real Estate market takes a 3% from the Buyer and a 3% from the Seller. They do Much More Work than the average cataloger.

The coin 'industry' takes a 15% from the Buyer and often an undisclosed 10% from the Seller. Sure, the seller rates are 'negotiable' but auction companies taking a full 25%+ of pure profit is Insane IMHO.

The rates Should go down with more compettition, but only if Buyers and Sellers demand it.

This won't happen with the current Raging Bull Market in coins. Buyers and Sellers don't mind the percentage as long as they are making money...

Once this Bull ends, then we'll see a change.

(of course, this is an oversimplification of problem - there is MUCH more to the Auction problem than just the fees)

seemyauction

Good Golly you guys are not looking in the right places....

My fees are 20% for coins and 35% for antiques & Collectibles, this includes online absentee bidding on Auction Zip

A 10% buyers Premium for absentee bids or online bids.

AL