Auction house buyers premiums

pruebas

I was watching the Stacks-Bowers-Ponterio auction in Hong Kong last evening and heard them say there was a 19.5% buyers premium on all lots purchased. I also note that this same firm increased their buyers premium to 18% for domestic (US) sales (with a discount to 15% if paid by cash).

Also, Spink-Smythe charges 20% on the first $2000 of each lot, then 15% on the remainder.

How long do you think before we see all the auction houses increase their buyers premiums to compensate for increased expenses?

YQQ

That is actually a very easy question to answer:
Only as long as we will buy at the auctions!
as soon as they notice a reversal, they will re-evaluate...
there are some other houses they already charge up to 23%!!!!!! and get it!
after all, someone has to pay for the fancy multicolor catalogs. Postage alone must cost a fortune...

MrEureka

As the BPs rise, the seller's commissions fall, often into negative territory. I suspect most of the increases are more a function of competition for consignments from unsophisticated sellers that don't understand the game.

For example, a pitch from the auction house to a potential consignor:

"Hey, not only will we waive the seller's commission but we'll give you an extra 10%! And don't worry abut the fact that our BP has been raised to 25%. You don't pay that. The buyer does."

To compete, other auction firms have to raise their BPs as well.

YQQ

do not think that this is happening.....
I have been a seller..........and a known buyer...

jt88

I did not realize that the BP is 19.50% until I checked the price of my winning bids. I can’t believe it. For 10K I have to pay $450 more and $900 for 20K. EBay also charge a lot on fee and buyer don't want to pay more. It is very difficult to make money now by selling coins.

pruebas

<< <i>I did not realize that the BP is 19.50% until I checked the price of my winning bids. I can’t believe it. For 10K I have to pay $450 more and $900 for 20K. EBay also charge a lot on fee and buyer don't want to pay more. It is very difficult to make money now by selling coins. >>

jt88, I can't believe anyone can make money given the prices these coins sold for. I was blown out of the water on all my lots of interest, and I stayed up most of the night waiting for them.

In the Baldwin HK Sale, there was a crown that sold in their Dr. Jacobs Chinese sale exactly 3 years ago for $48k. It sold for 3 times that on Thursday.

I always thought the buyers were agents rather than dealers buying inventory.

jt88

<< <i>

<< <i>I did not realize that the BP is 19.50% until I checked the price of my winning bids. I can’t believe it. For 10K I have to pay $450 more and $900 for 20K. EBay also charge a lot on fee and buyer don't want to pay more. It is very difficult to make money now by selling coins. >>

jt88, I can't believe anyone can make money given the prices these coins sold for. I was blown out of the water on all my lots of interest, and I stayed up most of the night waiting for them.

In the Baldwin HK Sale, there was a crown that sold in their Dr. Jacobs Chinese sale exactly 3 years ago for $48k. It sold for 3 times that on Thursday.

I always thought the buyers were agents rather than dealers buying inventory. >>



I totally agree with you the price is pretty high but did we say the same for last Dec. 2010 HK auction? Anyway, I think if you know what you are doing you might be OK. That's why I don't do live bidding because I don't want to follow the pumped up price and bought some coins in high price. I just put in my max bid and forget about it even though I was watching the live bid most of the time but I did not bid live. I was outbid for over 1.2 M and only got about 17K coins and banknotes. I am not sure if I can resell them right away but I am OK to hold them. Last year I got about 40K and I sold most of them in couple weeks.

jt88

someone told me there are more people in the floor this year than last year. This is the indiction that Chinese coin and paper money martket are still pretty hot, once the dealers load up with inventory they will push up the price. Don't forget China has a lot more people than US and people are getting more money to buy something other than food. If they can pushed orchid and other collectable price to sky I am sure they can do the same with coin and paper money.

SYRACUSIAN

<< <i>As the BPs rise, the seller's commissions fall, often into negative territory. I suspect most of the increases are more a function of competition for consignments from unsophisticated sellers that don't understand the game.
>>




Andy, it might come as a surprise to you, who lives and breathes in the coin microcosm, but you're talking about 99.5% of collectors (with $5000+ material for sale, that is essential to become an unsophisticated consignor).

The word game that you've chosen, speaks for itself.

pruebas

<< <i>someone told me there are more people in the floor this year than last year. This is the indiction that Chinese coin and paper money martket are still pretty hot, once the dealers load up with inventory they will push up the price. Don't forget China has a lot more people than US and people are getting more money to buy something other than food. If they can pushed orchid and other collectable price to sky I am sure they can do the same with coin and paper money. >>

Yes, you could definitely hear the many, many people in the auction room of both Ponterio and Baldwins. I'm glad you were successful on at least some lots and I hope you do well on them.

Not to change the topic of the thread, but I am confused by the China market. Let me start a new thread so as not to hijack my own thread with this.