Is this Holabird "buyers premium" excessive or is it the new norm for Numismatic Auctions.??
keets
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I was looking at some items on eBay and noticed this one for a nice HK-401 Gilt medal. ebay.com/itm/Pan-Pacific-International-Expo-Medal-HK-401-Lot-3299-/122256697309?hash=item1c771127dd:g:22MAAOSwA3dYRjUd
I was struck by the 29% buyers premium and wondered.......................is that high or normal??
Al H.
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That's the highest I've ever seen.
Typically 24% but usually you are better off registering with the auction site itself where the 3-4% ebay premium is not added to there usual 20%.
At Holobird sellers fee is 25% for items under $1000 and 15% above $1000.
At 29% the seller ends up with 62% of final selling price.
Sounds like consignor's financial suicide to me.
Holabird is the highest I've seen, both earlier and now.
Wow that is extremely high I don't care what kind of auction it is but that's just my opinion
HAPPY COLLECTING
Way too high. I buy from eBay and GC only.
And I thought Heritage's 25% buyer's premium was excessive!
(Still do.)
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
Doesn't matter to me very much as a buyer, will just factor it in to my max bid calculation as with any buyer's premium. Won't affect what I actually will pay for an item. They can just make it 50% or 100% buyer's premium, makes no difference to what is coming out of my pocket.
But as a seller, it matters much more so. Especially for those who are not used to the process or who do not use the auction process very much. Those infrequent sellers (think of an estate for example) will likely not always have the knowledge or power to negotiate reduced seller's fees and/or a share of that buyer's premium charged and will just pay what the auction house says is their fee. Unfortunate when sellers like that get taken advantage of, particularly when selling off the collection of a recently lost loved one.
Michael Kittle Rare Coins --- 1908-S Indian Head Cent Grading Set --- No. 1 1909 Mint Set --- Kittlecoins on Facebook --- Long Beach Table 448
Am not defending them but if you go to their auction website directly, the premiums vary, depending on the auction. I've bought from them and paid a 'mere' 17.5%.
What does Ebay charge to run an auction like that?
Since when can you add a buyers premium to eBay auction? I've never seen that before.
I'm not familiar with Holabird, but I believe the premium is on their auction. They are adding a few percent to offset eBay/PP fees. I expect that eBay allows it because the premium is there whether you list the auction on eBay or not. Makes for no surprises to an unwary buyer/bidder.
I only place bids at auction houses if they are willing to pay me an "auction house premium" equal to the buyer's premium they plan to charge me.
Which means that I never place bids at auction houses.
My Adolph A. Weinman signature
Heritage fee is 17.5 %..... are u including a sales tax?
Since they started running 'live auctions' which are just another bid venue source for an auction occurring somewhere in the world. An example would be if one of the auctions at the FUN show also ran through 'ebay live auctions'
pages.ebay.com/live-auctions/about.html
Buyer's fees will continue to rise as long as bidders remain willing to pay them. It's business.
The Live Auctions are always a rip off. They mostly sell jewelry. This guy has a FB of 80 and only 1 neg. 1 neg is great for a Live Auction.
I collect other items and auctions that have very high premiums are those that I get the best buy prices.
Collectors tend to be intimidated and stay away from the very high fee auction but the final prices end up being way below market, even with the premiums and shipping.
One forum I belong to with a number of collectors have members posting the excessive premiums at an upcoming auction and someone will add "then add the shipping"
End result the item hammers at 50% or lower.
Just last week a member posted how a Bing live steam engine I won sold cheap for only opening bid $125! (premium 20% + 23 shipping=$173) Members would be all over this on a BST for $400+ (typical range 500-800)
Surprised that they don't think along the lines as illini420 pointed out
The percentage is pretty high when Heritage has their Historical auctions.
I can't remember what the figure is off the top of my head... Maybe BillJones knows?
I bid the same way as illini420 does as when I figure a item be a certain value I back out the juice.
When I win the consignee takes the hit as I didn't spend more then what I felt it was worth.
Actually, I think buyer's fees will remain high as long as consignors are willing to let the auction house take that cut.
But I have heard of some consignors being able to negotiate to receive as much as 110% of the "hammer" prices.
I hate to say it, but I have not had good experiences with Holabird Auctions.
One time they had four circa 1872 Colorado silver agricultural/industrial fair medals. I placed "secret" maximum bids ahead of time on three of them. All three had obviously been cleaned. Two of those three had toned over again and had a reasonably nice appearance (but still hair-lined under the toning). The third example I bid on was un-toned (with hairlines).
I bid $1,200 and $1,100 on the two toned specimens. I didn't really want the un-toned one, but I placed a token bid of $400 on it.
Suspiciously, I won all three auctions for exactly my maximum bid. When I asked for an explanation, I was told that another outfit is contracted to impartially handle the bidding. I did not find that satisfactory.
And then there was this item that I bid on and clearly won. After the auction I received an email invoice stating that I had won that lot. But then a couple days later I received an email stating that the auctioneer had changed the result and I was no longer declared the winner. So, basically, I feel that I actually got a good deal on something, winning the auction fair and square (exceeding the initial bid), but then they wouldn't sell it to me. I was unable to get any explanation for that. Here is the item:
https://holabirdamericana.liveauctiongroup.com/Sacramento-Agricultural-Horticultural-Fair-Medal_i25652382
Makes think of the 90's where I always won at my max bid at Stacks.
The only auction house that I ran across like that and took me a couple of auctions to realize that raw material was way over graded before I went elsewhere..
I'm sure that with the new combo of principals that is no longer the case.
They are adding on eBays cut.
Nope, last auction was $25%. Political memorabilia auction that had some great stuff.
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
Anyone have an idea how valuable an item has to be to not pay a sellers fee/get more than the hammer price?
Interesting that the link says the medal was not sold.
Yes, and it also shows that the starting bid was $75.
The email invoice I received stated that I won it with a bid of $100, plus $24 premium, plus $5 handling fee, plus $19 shipping = $148. I asked for an explanation as to why I was no longer the winner of the lot, and when they wouldn't provide one I said "so long".
Maybe something like a $50K consignment at Heritage would be a start.
Buyer's fees are irrelevant to bidders. They should only matter to consignors who have to negotiate with the auction house to determine what % of hammer they will receive. It doesn't matter one bit what the stated seller's or buyer's fees are....only what you negotiate to based on hammer. In the days of no fees over 30 years ago, I received a net of 88-90% for my coins. These days, with "posted" 10% sellers and 17.5% buyer's fees, I still net out around 88-90% of final prices realized. It's what you negotiate, not what is necessarily posted. Lots of inputs to confuse both bidders and sellers. There are no hard and fast rules, only what you negotiate. Sure, high sellers and buyer's fees could scare away some bidders and sellers who don't understand how they really work.
As a bidder, all you have to do is divide what you're willing to pay for a lot by the buyer's fee. That's your max bid. So if a coin is worth $500 and the buyer's fee is 17.5%, you bid $425 max....and will end up paying $500 if you get it for your max bid. What if the buyer's fee were 100%? (can they do that? lol). No problem. That means you bid 50% of market value. What if the buyer's fee is 1000% (is that even possible?....lol). Yup it's possible. In that case, you bid 10% of full market value. For a $1,000 coin you would bid $100. They're just numbers. The only bidders that pay the buyer's fee are the one's who don't take it off their bids to begin with. If the next guy wants to pay 117.5% of FMV for a lot that is readily found for 100% of FMV, let them. Don't let their laziness affect you. Now if a coin is scarce enough that it really does routinely sell for say 125% of FMV/posted retail guides, then the coin was never readily available at 100% of listed price guides to begin with. In this case 125% (x 1.175) or 147% of "listed FMV"/"price guide" is when you'd be paying an extra 17.5%. Seasoned bidders and consignors understand this stuff.
That might not be too far off. My last Heritage consignment was a while back but they gave me 102% of hammer for a $40K reserve/2 lot consignment (15% buyers fee at that time). I was expecting 103-104% and was surprised when they didn't seem willing to go there. I didn't push it because I had other qualifiers in my contract that I felt were more important. That is, I picked the venues the 2 coins could be sold at (only Long Beach, summer ANA, or winter FUN). I also stipulated that both coins be in Platinum night with a full page for one lot and 1/4 page on the other. I also wanted to input pedigree and historical/rarity information on the 2 coins which they agreed to....and they pretty much used that information without much editing. I also had it verbally agreed to that if I felt the photographs were marginal, they could be redone (didn't need it though). I also had 0% buy back fees on both coins where Heritage made sure that the reserves were very conservative.
The coins did very well and more than I expected....about 2X the reserve prices. Gene Gardner ended up buying both of them for his collection. It didn't hurt that both of them had been off the market for 18-22 years. So missing that extra 1-2% didn't hurt much considering the coins brought 100% over the reserves. The timing, venue, auction house and market conditions were all pretty much dead on. I figured they could go for anywhere from $50K to $65K....and I was hoping higher if there were some strong bidders in the room. They ended up bringing $83K. And I netted 88.7% of prices realized. While it probably should have been 90-91%, I was more than happy with the overall outcome. Had we known in advance it was an $80K consignment, I'd have probably gotten the net 90%+. The highest I've received from a major auction house was a 106% of hammer deal back in 2009 when buyer's fees were still 15% (net 92%) but it was a fairly large consignment.
I disagree because many bidders also need to think about selling their coins at which time they become consigners. The buyer's fee indicates the transaction cost they will pay to sell the coin.
Similar to the driving a new car off the lot analogy where this infographic indicates a buyer can lose 11% immediately when buying / driving a new car off the lot, it seems easy to calculate that buyer with a 29% buyer's fee will lose 29% immediately if they turn around and sell the coin via the same venue.
Things may be different if you have $50k to consign, but that may not help with the item in the OP with a $200-$400 estimate. In this case, it seems the winning bidder may lose 29% immediately by taking the coin home.
Is it reasonable to say that you need a minimum of $40k to $50k to not lose buyer's premium when selling? If so, that may be a good reason for collectors below those levels to be cautious about high buyer's premiums.
Why should it matter to the buyer? The seller effectively pays the "buyer's premium" in the form of lower bids to compensate for the extra fees. You would think, however, that the site would have no consignors.
It beats buying the same coin from a dealer for a 30-40% markup over the auction price (to include any buyer's premium).
40% on 29% is essentially a 80% buyer's premium. Does this indicate that when selling, a buyer could end up losing 44%?
This sounds like something Stacks-Bowers would do with its website issues.
Your math is a little fuzzy.
1.4 x 29 = 40.6. I don't understand what you are asking in your second sentence.
You are not accounting for the possibility of using a different auction house with lower commissions, some auction houses offer more than hammer when you sell a coin you purchased from them, and a collector may sell without consigning to an auction house at all. Depending on your consignment and if you piggyback with others, you can also end up with negotiated commissions that are lower or more favorable to you when it comes time to sell.
$1 * 1.29 * 1.40 = $1.81 >> 80%
Yes, I'm specifically discussing the scenario of selling at the same venue to limit the number of variables discussed.
Selling at a different venue can have lower, or higher, fees.
You are counting all of the dealer's commission and not just the 40% mark up on the auction buyer's premium alone in your definition of "buyer's premium." So the difference is more conceptual/semantic than it is mathematical.
$1 x $1.29 x $1.40 = $1.81 effective cost or 81% mark-up to new owner
$1 x 0.29 bp x 1.4 markup = 0.406 attributed only to the auction house's buyer's premium + dealer's mark-up but not the 40% mark-up on the portion that constituted the original hammer price.
Either way is a valid way to look at it, I just don't consider all of the final total 81% cost over hammer to be a buyer's premium.
Yes, it's semantics, but an interesting one.
Depends on the auction house and the terms you negotiate. At the $10K-$20K level you can probably still negotiate away 15% of the total fees (ie 10 + 17.5%) with S/B and other auctions houses....where you net out in the 86-89% range. At least it was that way 5 years ago. Heritage gets so many consignments they can afford to be pickier. There's always the option of pooling your coins with a middleman dealer who sends $50K-$250K in pooled consignments to auctions houses they routinely deal with. That way your $10K-$20K doesn't get lost so easily. You get a better net rate to and have a more seasoned dealer negotiating and working for you. Even for those with smaller consignments like $5K-$15K, can't they do better than 85% net with firms like GC? If you're giving up the 17.5% to start, that's 82.5% net. I'd never settle for that unless we're talking illiquid or junk coins. And in that case, I'd probably be happy to get 70-75%. The reason for going to auction in the first place is that you have specialized coins that would do better there, and be sold at higher levels than you could get on the bourse floor.
If you don't do any negotiating you as the consignor will fork over both the 10% sellers and 17.5% buyers fee....netting 76.6% in the process (ie 90/117.5). You can always do better than that. I don't see why a $20K consignment couldn't get a net rate at a major auction of at least 85-88%. When I did $20K consignments consistently in the 1980's B&M gave me around an 87-88% net. You should be able to walk decent coins on the bourse floor for 85% net. Why waste time at an auction unless they're "special." At $40K-$50K I'd expect to net out at 88% or better....which still digs into the buyer's fee a little (the seller's fee is gone)....that's 103.4% of hammer.
No, because consignors like me know that the sum of the fees are all negotiable. List them any way you like. But I am going to negotiate for a net 88-90% no matter how onerous they may look on paper.
For coins bought at auction, dealer's subsequent mark ups are not "buyer's fees." One way to look at this is the dealer bought that coin at auction because to them it was a wholesale price. By marking it up 10-45%, their customer is probably paying a retail markup. Whatever buyer's fee was charged at the auction was paid for by the consignor. Often times dealers can buy something at auction and flip it for a 10-50% profit. The next guy might flip it for another 10-25%. And so on. All those prices are wholesale as they are occurring between dealers. It could happen that the end retail user ends up paying 2X what it went for at auction....and a year later someone offers them a 30% profit. So the idea of wholesale/retail/etc. is rather variable. It comes down to the coin and who recognizes the full value of it. Some coins sell way too cheap at auctions. But, most sell for what they're worth and then some.
If you've been a full time dealer or have consigned consistently over the years to major auctions, you wouldn't be saying that. If the bidders factor out the buyer's fee when buying, then they are not paying it....period. What they are paying is the difference from say bourse floor wholesale and what the coin went for at auction. I don't buy anything at auction or on the bourse if I don't think I'm into that coin at 0-10% within wholesale (ie a 10% max risk). No way am I jumping in at a 20-40% hole to start off. I prefer to get in near 0% so that ideally I could liquidate the coin at cost if I over-estimated it. To do that, you need to know what you can liquidate that coin for the very next day. The buyer's fee has NOTHING to do with the cost of acquiring a coin...unless you forget to back it out at the auction. If it were really true that the 17.5% buyer's fee was part of your acquisition cost, then dealers wouldn't buy at auctions for inventory. They'd save that 17.5% and buy it on the bourse floor instead.
The only acquisition cost at auction for collectors is whatever you pay over and above wholesale levels. That can range from 0% and up. In some cases, we've seen top collectors (like Stewart Blay) cruise through major auctions among the sharks and buy items for wholesale or less. I remember bidding against Gene Gardner at the 2002 Queller sale for a raw gem 1857-s half dollar. I had the coin as a solid MS65 or +. Gene had it as a 66. They got the coin for strong 65 money. In essence they got it way under wholesale as soon as it slabbed out PCGS MS66. And that's the game. They paid $22K for it. As a 66 it was at least upper $20's to lower $30's. I was only around $18K-$20K. A collector got that coin for ZERO acquisition cost. Even if graded out as MS65, it was still the finest known and worth every cent of what they paid. There was no 15% buyer's fee "loss." I recall that coin went for $55K-$65K when Gene sold his collection.
**Doesn't matter to me very much as a buyer, will just factor it in to my max bid calculation as with any buyer's premium. **
this is the oft repeated mantra I hear from forum members but doesn't seem to be the one practiced by the overall Hobby(this is the only place I hear it mentioned as a strategy). it certainly isn't logical, since prices would reflect the lower winning bid in auction reporting. also, I would like someone to tell me what the FMV of the medal in the OP might be, that way I can keep my bid back to account for the 29%.
all I know is that if I bid in auctions in accordance with the method prescribed by illini420 and roadrunner I would not be winning very many Lots.
I don't understand what you find so illogical about it. The prices reported include the buyer's fees and all other premiums; thus, it doesn't matter whether the buyer's fee is 10% or 50%, the price will fall within the same narrow range (with some round off error and perhaps variation for bidding increments). As for the FMV, I do not think it is unrealistic to devise an estimate of FMV or [I]what it is worth to you[/I] , and then calculate back of 29%. You could add a little if you really like the item to add some padding. If not, then pass.
Using my methods over the years I won about 1/3 of the lots I was really after. In some auctions I won too many coins. In others, not enough. Over a 25 year period, I'm not aware of a single major player (bidder or collector) who didn't consistently back out their bids by the Buyer's Fee and win lots successfully. That assumes you knew how to grade close to TPG standards in your specialty and can price the market fairly accurately. If the overall hobby doesn't practice this, it's to their own detriment. When I went after a raw gem, top seated rarity in August 1986 I was willing to pay $15,500 all-in for it. With a 10% buyer's fee that meant a bid of approx $14,000. I got the coin with an actual bid of $8750....net of $9625 + 5% commish to the dealer who bid for me. What a rip considering it sold for $30,000 in April 1980. It graded out PCGS MS66 in 1986. The buyer's fee meant nothing considering the reasonable price it went for....only 4 years later it was worth $45K+. It last sold in Gardner for $88K now graded PCGS MS67 CAC.
TDN and others have indicated that at times they just have to keep their hand raised and win the lot as there might not ever be a 2nd chance. That's a totally different scenario. Don't compare bidding on a SP66 1794 FH $ with bidding on an 1879 MS64 seated half. Most of my bidding at auction over those 25 years was on raw coins. So never mind whether you factored in the 10-15% BF correctly....the bigger problem was that you weren't already 50-100% too high by picking the wrong grade for the coin. These days, the 17.5% Buyer's Fee is probably less than the 30-50% range of low end to high end value on a $1000 price guide coin (ie actual value $500-$1500 depending on quality). So you can factor out the BF and still be off by 50% on a very low end or high end coin.
Great conversation.
I routinely place bids at auctions less bidders fees and shipping (sometimes sellers fees as well, depending on the issue)....typically making me an under bidder. That's fine, as it also may mean I'm not overpaying for the coin. Likewise, I factor both the seller and the buyers fees plus shipping and grading costs into every coin I auction/plan on auctioning, prior to buying (plus a fee/mark up for profit). Again, it means that I hopefully won't be buried in the coin. If those numbers don't work for the seller, I don't get the coin. If I buy in this fashion, and sell local/bourse, I will generate a better profit, but I'm still mostly ok if I have to auction. Again, it also depends on the coin.....
The prices reported include the buyer's fees and all other premiums;
and this is fact, or is it what stman posted about: Do people post facts here, or opinion?
@roadrunner mentioned that TDN bidding on the 1794 $1 as being a different scenario... but that example of bidding is worth looking at here as it is a great example of the buyer's premium percentage not really mattering and the buyer factoring it in to their floor bid.
When that coin was sold in auction, the buyer's premium was clearly factored into the winning floor bid. Remember that they didn't raise their hand and bid $10 million; instead, they bid $8,525,000 on the floor and the price reported by the media and all since then is $10,016,875 as it factored in the 17.5% buyer's premium.
Looking back, no one cares and few will ever remember what the amount bid on the floor was and few will care or remember what the auction buyer's premium was at the time. What matters is that the buyer paid $10,016,875. The BP percentage there was clearly not relevant other than having to use it in some math to figure out what to bid on the floor.
Michael Kittle Rare Coins --- 1908-S Indian Head Cent Grading Set --- No. 1 1909 Mint Set --- Kittlecoins on Facebook --- Long Beach Table 448