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Heritage Buyers Premium Increase

ZoharZohar Posts: 6,629 ✭✭✭✭✭

Please note that for all Coin & Currency auctions closing after August 11th, 2017, the Buyer's Premium will be 20% (minimum $19). Please direct any inquiries to 214-409-1150 or Bid@HA.com.

This was not a decision that we came to lightly. Heritage is a major player on the world auction stage, and our BP rates will now be competitive with the rest of the world's key auctioneers.

The Buyer's Premium for auctions in other categories will remain unchanged.

Comments

  • CoinstartledCoinstartled Posts: 10,135 ✭✭✭✭✭

    They have a large payroll to maintain.

  • ZoharZohar Posts: 6,629 ✭✭✭✭✭

    It's a double edged sword -

    1) The company's global footprint is significant and spreads across different product lines - costs are relatively fixed
    2) Volume of consignments needs to be predictable enough to manage revenue/profit expectations

    Question is whether 20% will deter consignments as effectively seller fees + BP would take a bigger chunk of the sale from the consignor. Higher value items will obviously take a larger $ impact. Now if the platform can maintain the higher sales prices in the market, BP matters less, as it will be offset by the increased sales prices, if not, motivation to consign may dampen and perhaps shift to dealers/lesser auction houses/ebay.

  • StorkStork Posts: 5,205 ✭✭✭✭✭

    and our BP rates will now be competitive with the rest of the world's key auctioneers.

    In other words...'We saw most everyone else do it and figured we could get a way with it too'.

    Yes, other auction houses have that much fee, especially in Europe and when you figure in other taxes too.

    However, the phrase 'be competitive' is something more accurately applied to a service, a product, or something else that keeps the company near the cutting edge...of something other than a RISING fee schedule. Dropping one, sure. If they'd dropped to 10% then they'd 'be competitive' with Great Collections. But not rising. That is not 'being competitive'. That is being 'we are increasing our profits'.

    All they needed to do to sound like a truly big corporation would have been to add the phrase 'in order to serve you better'. "In order to serve you better we will now jack up our fees to match what our competitors have gotten away with even though there is no value added to you, the customer".

    I guess time will tell if this will be supported or not. Will the eventual end users (individual buyers and, by extension, sellers) allow the new price-of-doing-business-tax to cut into their budgets or not? The bigger dealers/customers will surely get negotiated prices so the ones really paying will be the small potato folks who are the end customers.


  • brg5658brg5658 Posts: 2,384 ✭✭✭✭✭

    This topic is being discussed at length on the US boards also.

    Link here.

    It was a mere 5 years ago (August 1, 2012) when Heritage made the move from 15% to 17.5% for coins. So, can I expect it to be 25% in 2027, and possibly 30% by 2037? Where does the greed stop and the sanity set in?

    I only see that technology advances have eased their lives. Yet, they want more and more of the cut. Their online-only auctions are handled by software (HeritageLive!). Visibility of auctions via the internet to millions of potential bidders, instead of needing to call-in or be physically in an auction room. If they wanted to cut the costs, they don't need to mail paper catalogs or pay the people who lay those out -- that's an antiquated practice of the past. They don't have to take photos of coins with film-cameras (develop them, size them, etc. ) Now, they have an army of digital photographers who take fixed/standard photos with little or no actual thought/effort put into them.

    It's like when eBay said they were doing us a favor by making the final value fee on all items an even 10%. Now we're supposed to believe Heritage is being more competitive by raising their buyer's premium. How stupid do they think we are? Completely illogical.

    -Brandon
    -~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-
    My sets: [280+ horse coins] :: [France Sowers] :: [Colorful world copper] :: [Beautiful world coins]
    -~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-

  • ZoharZohar Posts: 6,629 ✭✭✭✭✭

    If Ebay was truly vested in collectibles it would have a window of opportunity at some segments.

    Dealers, other than a few like Atlas, do not invest much in websites and market outreach. They heavily rely on auctions to liquidate what is unsold. I am sure that volume will maintain a favorable cost structure for wholesale. Retail collectors will be impacted the most.

    The increased cost of sales (25% including seller fees) should open up competition for lower cost platforms to intermediate. It does mean that intermediaries will need to invest in technology, which Heritage no doubt has done.

  • EVillageProwlerEVillageProwler Posts: 5,859 ✭✭✭✭✭

    I do not see how raising the BP can be a non-negative impact on consignors. I do not see how raising the BP can cause a commensurate increase in bid levels, unless the bidders fail to calculate final pricing correctly as a result (which is a ridiculous assumption to make, especially when HA's own technology platform calculates the final prices on the fly).

    In other words, no matter the official corporate spin, it's all about trying to increase profits (which is a reasonable goal for any corporation) and only time will tell if they can maintain consignment levels or if they are handing a competitive edge to other auction venues like GC, Legend, etc.

    EVP

    How does one get a hater to stop hating?

    I can be reached at evillageprowler@gmail.com

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @Zohar said:
    It's a double edged sword -

    1) The company's global footprint is significant and spreads across different product lines - costs are relatively fixed
    2) Volume of consignments needs to be predictable enough to manage revenue/profit expectations

    Question is whether 20% will deter consignments as effectively seller fees + BP would take a bigger chunk of the sale from the consignor. Higher value items will obviously take a larger $ impact. Now if the platform can maintain the higher sales prices in the market, BP matters less, as it will be offset by the increased sales prices, if not, motivation to consign may dampen and perhaps shift to dealers/lesser auction houses/ebay.

    Generally, major consignors will NOT see much of an impact. Heritage typically rebates part of the BP to large consignors. The larger BP allows them to kick back more to the consignor to incentivize them to place there coins in auction. Only small consignors are likely to see any impact.

    Stacks Bowers has done the same. I imagine all auction houses will follow suit.

    As for dealers or eBay, it depends on the item. You can easily get 0% BP from Heritage on a consignment. Let's assume it's a $1000 coin. So, on Heritage, the bidder bids it up to $833 for a total purchase price of $1000. The consignor gets $833. Now, if you put the same coin on eBay and it goes for $1000, you'll net about $900 depending on your exact eBay status. BUT BUT BUT, that assumes your visibility on eBay is as high as a coin at Heritage. For a relatively common coin, you will not see the same kind of bidding on eBay that you would in a Heritage or Stacks auction.

    It's also worth noting that Heritage insulates you from the problems of lost/stolen packages, credit card fraud, etc. that can happen on eBay.

    The material impact on the coin market of this move by Heritage is likely ABSOLUTELY NOTHING.

    IMHO

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @brg5658 said:
    This topic is being discussed at length on the US boards also.

    Link here.

    It was a mere 5 years ago (August 1, 2012) when Heritage made the move from 15% to 17.5% for coins. So, can I expect it to be 25% in 2027, and possibly 30% by 2037? Where does the greed stop and the sanity set in?

    I only see that technology advances have eased their lives. Yet, they want more and more of the cut. Their online-only auctions are handled by software (HeritageLive!). Visibility of auctions via the internet to millions of potential bidders, instead of needing to call-in or be physically in an auction room. If they wanted to cut the costs, they don't need to mail paper catalogs or pay the people who lay those out -- that's an antiquated practice of the past. They don't have to take photos of coins with film-cameras (develop them, size them, etc. ) Now, they have an army of digital photographers who take fixed/standard photos with little or no actual thought/effort put into them.

    It's like when eBay said they were doing us a favor by making the final value fee on all items an even 10%. Now we're supposed to believe Heritage is being more competitive by raising their buyer's premium. How stupid do they think we are? Completely illogical.

    You are ignoring how much of that buyer's premium goes to consignors. Major dealers get as much as NEGATIVE 5% seller fees - that's right, they get 5% of the 20% BP. That encourages the placement of better coins into the auction. With the extra 2.5% BP, I would expect the kick back to consignors to increase accordingly.

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @EVillageProwler said:
    I do not see how raising the BP can be a non-negative impact on consignors. I do not see how raising the BP can cause a commensurate increase in bid levels, unless the bidders fail to calculate final pricing correctly as a result (which is a ridiculous assumption to make, especially when HA's own technology platform calculates the final prices on the fly).

    In other words, no matter the official corporate spin, it's all about trying to increase profits (which is a reasonable goal for any corporation) and only time will tell if they can maintain consignment levels or if they are handing a competitive edge to other auction venues like GC, Legend, etc.

    EVP

    You might be surprised how much of the BP goes TO consignors. If you have a significant coin, you might get MOST of the BP given to you.

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @Stork said:

    and our BP rates will now be competitive with the rest of the world's key auctioneers.

    In other words...'We saw most everyone else do it and figured we could get a way with it too'.

    Yes, other auction houses have that much fee, especially in Europe and when you figure in other taxes too.

    However, the phrase 'be competitive' is something more accurately applied to a service, a product, or something else that keeps the company near the cutting edge...of something other than a RISING fee schedule. Dropping one, sure. If they'd dropped to 10% then they'd 'be competitive' with Great Collections. But not rising. That is not 'being competitive'. That is being 'we are increasing our profits'.

    All they needed to do to sound like a truly big corporation would have been to add the phrase 'in order to serve you better'. "In order to serve you better we will now jack up our fees to match what our competitors have gotten away with even though there is no value added to you, the customer".

    I guess time will tell if this will be supported or not. Will the eventual end users (individual buyers and, by extension, sellers) allow the new price-of-doing-business-tax to cut into their budgets or not? The bigger dealers/customers will surely get negotiated prices so the ones really paying will be the small potato folks who are the end customers.

    If they cut the BP, they'd likely get FEWER coins consigned because they would have less money to incentivize consignors. Most major consignors get NEGATIVE seller premiums. Even I, who rarely consigns, asked for 0% seller premium recently and they gave it to me.

  • brg5658brg5658 Posts: 2,384 ✭✭✭✭✭
    edited August 9, 2017 10:40AM

    @jmlanzaf said:

    @brg5658 said:
    This topic is being discussed at length on the US boards also.

    Link here.

    It was a mere 5 years ago (August 1, 2012) when Heritage made the move from 15% to 17.5% for coins. So, can I expect it to be 25% in 2027, and possibly 30% by 2037? Where does the greed stop and the sanity set in?

    I only see that technology advances have eased their lives. Yet, they want more and more of the cut. Their online-only auctions are handled by software (HeritageLive!). Visibility of auctions via the internet to millions of potential bidders, instead of needing to call-in or be physically in an auction room. If they wanted to cut the costs, they don't need to mail paper catalogs or pay the people who lay those out -- that's an antiquated practice of the past. They don't have to take photos of coins with film-cameras (develop them, size them, etc. ) Now, they have an army of digital photographers who take fixed/standard photos with little or no actual thought/effort put into them.

    It's like when eBay said they were doing us a favor by making the final value fee on all items an even 10%. Now we're supposed to believe Heritage is being more competitive by raising their buyer's premium. How stupid do they think we are? Completely illogical.

    You are ignoring how much of that buyer's premium goes to consignors. Major dealers get as much as NEGATIVE 5% seller fees - that's right, they get 5% of the 20% BP. That encourages the placement of better coins into the auction. With the extra 2.5% BP, I would expect the kick back to consignors to increase accordingly.

    The just as likely scenario is that fewer people will bid because they are just fed up with the greed. So, the consignor may be getting that extra 5% on a smaller final sale value. The only entity making a profit here is the middle-man Heritage.

    -Brandon
    -~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-
    My sets: [280+ horse coins] :: [France Sowers] :: [Colorful world copper] :: [Beautiful world coins]
    -~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-

  • ZoharZohar Posts: 6,629 ✭✭✭✭✭

    @jmlanzaf said:
    >
    You might be surprised how much of the BP goes TO consignors. If you have a significant coin, you might get MOST of the BP given to you.

    You may be referring to dealers not collectors. To us this is at the very least 20% of value, more likely 25%.

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @Zohar said:

    @jmlanzaf said:
    >
    You might be surprised how much of the BP goes TO consignors. If you have a significant coin, you might get MOST of the BP given to you.

    You may be referring to dealers not collectors. To us this is at the very least 20% of value, more likely 25%.

    Not true. I've consigned a total of 4 coins to Heritage in 3 years. I got 0% every time. By the way, the standard seller's fee is 10% not 20 or 25%.

    I don't think you are understanding me. If you buy a coin from Heritage, you pay 20%. But, depending on that coin, some of that money actually goes to the consignor.

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @brg5658 said:

    @jmlanzaf said:

    @brg5658 said:
    This topic is being discussed at length on the US boards also.

    Link here.

    It was a mere 5 years ago (August 1, 2012) when Heritage made the move from 15% to 17.5% for coins. So, can I expect it to be 25% in 2027, and possibly 30% by 2037? Where does the greed stop and the sanity set in?

    I only see that technology advances have eased their lives. Yet, they want more and more of the cut. Their online-only auctions are handled by software (HeritageLive!). Visibility of auctions via the internet to millions of potential bidders, instead of needing to call-in or be physically in an auction room. If they wanted to cut the costs, they don't need to mail paper catalogs or pay the people who lay those out -- that's an antiquated practice of the past. They don't have to take photos of coins with film-cameras (develop them, size them, etc. ) Now, they have an army of digital photographers who take fixed/standard photos with little or no actual thought/effort put into them.

    It's like when eBay said they were doing us a favor by making the final value fee on all items an even 10%. Now we're supposed to believe Heritage is being more competitive by raising their buyer's premium. How stupid do they think we are? Completely illogical.

    You are ignoring how much of that buyer's premium goes to consignors. Major dealers get as much as NEGATIVE 5% seller fees - that's right, they get 5% of the 20% BP. That encourages the placement of better coins into the auction. With the extra 2.5% BP, I would expect the kick back to consignors to increase accordingly.

    The just as likely scenario is that fewer people will bid because they are just fed up with the greed. So, the consignor may be getting that extra 5% on a smaller final sale value. The only entity making a profit here is the middle-man Heritage.

    Except it costs the buyer exactly $0. When I buy a coin, I determine my bid based on the total cost with BP. If I wanted to pay $1000 for a coin last week, I bid $850 last week because the total with 17.5% BP would be $1000. If I want to pay $1000 for a coin this week, I'm now only bidding $830 because with a 20% BP it would be $1000.

  • AbueloAbuelo Posts: 1,758 ✭✭✭✭✭

    While not happy that Stack's or Heritage increased their fees ( not even sure there was a reason but maybe there was), I am not sure collectors will be affected. If I have 100 for a coin I will bid the same. How it gets split between auction house and consignor does not bother me at all. I think here the problem will be for consignors, particularly small collectors consigning regular coins. Not everyone has Stellas to sell...

  • ZoharZohar Posts: 6,629 ✭✭✭✭✭
    edited August 9, 2017 6:17PM

    /jmlanzaf Are you affiliated with an auction house or dealership... you seem very well rehearsed with respect to the process for someone who has done such little consignment/sales activity and joined the forum less than a week ago. If I am wrong then I am very impressed by the analysis and position taken as a smaller collector.

    Anyways, we will see how this plays out. I have not heard of a collector who gets more of the BP, other than dropping the sales commission so to me it really doesn't work in favor of your typical collector.

  • EVillageProwlerEVillageProwler Posts: 5,859 ✭✭✭✭✭

    @jmlanzaf

    The way you respond to us drips of way too much arrogance. To assume that I or anyone else here do not know that consignors often get more than 100% of bid is beyond foolish -- that you'd draw such conclusions based on assumptions.

    Additionally, I also arrived at the strong suspicion as @Zohar that you are a shill for HA. Your credibility here stinks, even if you may be correct in part.

    Do us all a favor and don't come around here strutting your arrogant peacock feathers and treating us like we are clueless noobs. If you are an actual collector, then stay and enjoy the camaraderie. Otherwise, please just leave us alone.

    EVP

    How does one get a hater to stop hating?

    I can be reached at evillageprowler@gmail.com

  • brg5658brg5658 Posts: 2,384 ✭✭✭✭✭

    @jmlanzaf said:

    @brg5658 said:

    @jmlanzaf said:

    @brg5658 said:
    This topic is being discussed at length on the US boards also.

    Link here.

    It was a mere 5 years ago (August 1, 2012) when Heritage made the move from 15% to 17.5% for coins. So, can I expect it to be 25% in 2027, and possibly 30% by 2037? Where does the greed stop and the sanity set in?

    I only see that technology advances have eased their lives. Yet, they want more and more of the cut. Their online-only auctions are handled by software (HeritageLive!). Visibility of auctions via the internet to millions of potential bidders, instead of needing to call-in or be physically in an auction room. If they wanted to cut the costs, they don't need to mail paper catalogs or pay the people who lay those out -- that's an antiquated practice of the past. They don't have to take photos of coins with film-cameras (develop them, size them, etc. ) Now, they have an army of digital photographers who take fixed/standard photos with little or no actual thought/effort put into them.

    It's like when eBay said they were doing us a favor by making the final value fee on all items an even 10%. Now we're supposed to believe Heritage is being more competitive by raising their buyer's premium. How stupid do they think we are? Completely illogical.

    You are ignoring how much of that buyer's premium goes to consignors. Major dealers get as much as NEGATIVE 5% seller fees - that's right, they get 5% of the 20% BP. That encourages the placement of better coins into the auction. With the extra 2.5% BP, I would expect the kick back to consignors to increase accordingly.

    The just as likely scenario is that fewer people will bid because they are just fed up with the greed. So, the consignor may be getting that extra 5% on a smaller final sale value. The only entity making a profit here is the middle-man Heritage.

    Except it costs the buyer exactly $0. When I buy a coin, I determine my bid based on the total cost with BP. If I wanted to pay $1000 for a coin last week, I bid $850 last week because the total with 17.5% BP would be $1000. If I want to pay $1000 for a coin this week, I'm now only bidding $830 because with a 20% BP it would be $1000.

    I guess some of us have a more universal understanding of fairness than you do. All of us will eventually be sellers, not just buyers. It might be after we're dead, but eventually we will all pass to the great beyond and our coins will need to be consigned or dispersed in some way. I'd like to be treated fairly at that time, or that my family be treated fairly. The point that seems to be escaping you is that the more you let the greedy corporate auction machine (Heritage et al.) skim off the top for offering truly NO added benefit, the more they will think they can continue to do this in the future. Chipping away at 5% BP increase per decade is not a sustainable model IMO.

    I don't get the rhetoric from so many on this issue. On the one hand, I'm hearing folks (like you) say "it doesn't affect me as a buyer, I just figure it into my bid." While, at the same time, saying Heritage regularly gives consignors more than 100% hammer. So, as an example, if they are giving consignors 105% of hammer so often, why not just make the BP 15% instead of 20% and save everyone the numeric acrobatics? The obvious reason is that they are not giving consignors 105% (or more than 100% of hammer) all that often. There must be a profit motive for the auction houses to undertake this BP increase otherwise it's just arithmetic complexity for the sake of complexity.

    -Brandon
    -~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-
    My sets: [280+ horse coins] :: [France Sowers] :: [Colorful world copper] :: [Beautiful world coins]
    -~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-

  • JustacommemanJustacommeman Posts: 22,847 ✭✭✭✭✭
    edited August 9, 2017 9:56PM

    FWIW I received 108% & 112% on two fairly recent consignments from two auction venues other then Heritage.. If you have stuff they want Its all negotiable. You will do better without reserves. It's the spread you want to tighten. Yes, the burden falls on smaller consigners.

    Of course raising their BP is to boost their bottom line. There is nothing sadistic about that, What for profit company doesn't have profits high on their agenda? It maybe a hobby to most of us but it's a business to them.

    mark

    Walker Proof Digital Album
    Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
  • ZoharZohar Posts: 6,629 ✭✭✭✭✭

    So what we will likely see is

    1) Smaller catalogs with better items in them, effectively sold at lower BP rates than published
    2) Drop in appetite for retail consignments, dealers appealing to clients to consign through them to get the benefit of scale/price vs. auction house
    3) Fallout of more commonly available material from auctions - opportunity for dealer/online venues to sell at lower costs
    4) If I am Heritage, I offer lower fee structure on the weekly electronic auction to keep people engaged

    Mid-high market is wide open for someone to engage with a thinner cost structure, likely electronic platform with solid marketing capabilities.

  • MrBreezeMrBreeze Posts: 1,035 ✭✭✭

    A couple of things that I thought about reading the responses. As a past consignor to Heritage and a few other places, I can draw from some experience with it.

    "Yes, the burden falls on smaller consigners."

    I agree with that and would add (if not already assumed) that this is probably true in any area of business. It's hard to get equal terms to the big fish when you are swimming in the shallow pools. The coin business should not be that different. We all get "chiseled" in nearly every area of our life where a cost is being incrementally increased to profit someone else. Isn't that capitalism?

    As for Heritage or any auction company raising the rates, they will do so until they see a legitimate negative impact on their bottom line. As a shallow pool swimmer, I still can't help but think that the big boys don't really see much to it. I, however do feel the pinch as far as a potential future consignor because I don't/won't have the bargaining position of others. And honestly, from Heritage's perspective, it probably makes sense. To me, the costs of holding, selling, handling, shipping, etc. one $50 coin is not that dissimilar to one $5,000 coin. Of course, there is money associated with marketing certain more high profile coins, but in general, wouldn't they want to handle one $1,000 coin where they potentially make $100+ vs one $100 coin where they make $10+. Now, do I see Heritage strictly going that direction, absolutely not. The weekly and monthly auctions of generally less expensive items keep a consistent flow of money coming in between the big event auctions. It would make sense to me to keep these auctions, if not for anything, to keep eyes and wallets coming to the site on a consistent basis. From my personal experience, I spend way more time at Heritage's website than any other auction site that offers only 3-4 auctions per year because of the more affordable material that they probably make very little on.

    Having said that, I also believe that raising the rate does not automatically mean that they will lose smaller consignors or smaller value items. It could mean more. In my experience, I saw the potential for receiving better consignor terms based on the value of the material I consigned. If, let's say, at $5,000 worth of material, I could get hammer, and $10,000 worth, I could get hammer + 2%, I may be "encouraged" to add more items or wait until I met the threshold for an increase in money to me, as the consignor.

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @brg5658 said:

    @jmlanzaf said:

    @brg5658 said:

    @jmlanzaf said:

    @brg5658 said:
    This topic is being discussed at length on the US boards also.

    Link here.

    It was a mere 5 years ago (August 1, 2012) when Heritage made the move from 15% to 17.5% for coins. So, can I expect it to be 25% in 2027, and possibly 30% by 2037? Where does the greed stop and the sanity set in?

    I only see that technology advances have eased their lives. Yet, they want more and more of the cut. Their online-only auctions are handled by software (HeritageLive!). Visibility of auctions via the internet to millions of potential bidders, instead of needing to call-in or be physically in an auction room. If they wanted to cut the costs, they don't need to mail paper catalogs or pay the people who lay those out -- that's an antiquated practice of the past. They don't have to take photos of coins with film-cameras (develop them, size them, etc. ) Now, they have an army of digital photographers who take fixed/standard photos with little or no actual thought/effort put into them.

    It's like when eBay said they were doing us a favor by making the final value fee on all items an even 10%. Now we're supposed to believe Heritage is being more competitive by raising their buyer's premium. How stupid do they think we are? Completely illogical.

    You are ignoring how much of that buyer's premium goes to consignors. Major dealers get as much as NEGATIVE 5% seller fees - that's right, they get 5% of the 20% BP. That encourages the placement of better coins into the auction. With the extra 2.5% BP, I would expect the kick back to consignors to increase accordingly.

    The just as likely scenario is that fewer people will bid because they are just fed up with the greed. So, the consignor may be getting that extra 5% on a smaller final sale value. The only entity making a profit here is the middle-man Heritage.

    Except it costs the buyer exactly $0. When I buy a coin, I determine my bid based on the total cost with BP. If I wanted to pay $1000 for a coin last week, I bid $850 last week because the total with 17.5% BP would be $1000. If I want to pay $1000 for a coin this week, I'm now only bidding $830 because with a 20% BP it would be $1000.

    I guess some of us have a more universal understanding of fairness than you do. All of us will eventually be sellers, not just buyers. It might be after we're dead, but eventually we will all pass to the great beyond and our coins will need to be consigned or dispersed in some way. I'd like to be treated fairly at that time, or that my family be treated fairly. The point that seems to be escaping you is that the more you let the greedy corporate auction machine (Heritage et al.) skim off the top for offering truly NO added benefit, the more they will think they can continue to do this in the future. Chipping away at 5% BP increase per decade is not a sustainable model IMO.

    I don't get the rhetoric from so many on this issue. On the one hand, I'm hearing folks (like you) say "it doesn't affect me as a buyer, I just figure it into my bid." While, at the same time, saying Heritage regularly gives consignors more than 100% hammer. So, as an example, if they are giving consignors 105% of hammer so often, why not just make the BP 15% instead of 20% and save everyone the numeric acrobatics? The obvious reason is that they are not giving consignors 105% (or more than 100% of hammer) all that often. There must be a profit motive for the auction houses to undertake this BP increase otherwise it's just arithmetic complexity for the sake of complexity.

    They don't give everyone 105% of the hammer. Some sellers pay 10% of hammer. Some sellers get 10% of hammer. It depends on the quality of the consignment.

    My point is that looking at the BP alone doesn't indicate much of anything about the economics of the coin market. As a buyer, I can easily take it into account so a 15% BP just means I bid more than with a 20% BP. As a seller, the situation is more complicated. The higher BP could very well INCREASE my yield as a seller, since I could get a kickback on better material. It could also DECREASE my yield as a seller if I have common material that they House isn't enthused about taking on consignment.

    But people who are bemoaning the increase (like you) are ignoring the nuance of the situation. It is not so simply a money grab by the Auction House as the coin market itself is global and competitiveness is a more nuanced concept.

    You are also ignoring the value you get from the House. I would never consign my material to the lowest cost House if the lower cost means lower exposure and lower prices. Looking at just the BP doesn't tell you what value added you might be getting as a result either directly (BP kickback to consignors) or indirectly (more advertising, greater internet presence, etc.)

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @MrBreeze said:
    A couple of things that I thought about reading the responses. As a past consignor to Heritage and a few other places, I can draw from some experience with it.

    "Yes, the burden falls on smaller consigners."

    I agree with that and would add (if not already assumed) that this is probably true in any area of business. It's hard to get equal terms to the big fish when you are swimming in the shallow pools. The coin business should not be that different. We all get "chiseled" in nearly every area of our life where a cost is being incrementally increased to profit someone else. Isn't that capitalism?

    As for Heritage or any auction company raising the rates, they will do so until they see a legitimate negative impact on their bottom line. As a shallow pool swimmer, I still can't help but think that the big boys don't really see much to it. I, however do feel the pinch as far as a potential future consignor because I don't/won't have the bargaining position of others. And honestly, from Heritage's perspective, it probably makes sense. To me, the costs of holding, selling, handling, shipping, etc. one $50 coin is not that dissimilar to one $5,000 coin. Of course, there is money associated with marketing certain more high profile coins, but in general, wouldn't they want to handle one $1,000 coin where they potentially make $100+ vs one $100 coin where they make $10+. Now, do I see Heritage strictly going that direction, absolutely not. The weekly and monthly auctions of generally less expensive items keep a consistent flow of money coming in between the big event auctions. It would make sense to me to keep these auctions, if not for anything, to keep eyes and wallets coming to the site on a consistent basis. From my personal experience, I spend way more time at Heritage's website than any other auction site that offers only 3-4 auctions per year because of the more affordable material that they probably make very little on.

    Having said that, I also believe that raising the rate does not automatically mean that they will lose smaller consignors or smaller value items. It could mean more. In my experience, I saw the potential for receiving better consignor terms based on the value of the material I consigned. If, let's say, at $5,000 worth of material, I could get hammer, and $10,000 worth, I could get hammer + 2%, I may be "encouraged" to add more items or wait until I met the threshold for an increase in money to me, as the consignor.

    Well said, sir!

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @EVillageProwler said:
    @jmlanzaf

    The way you respond to us drips of way too much arrogance. To assume that I or anyone else here do not know that consignors often get more than 100% of bid is beyond foolish -- that you'd draw such conclusions based on assumptions.

    Additionally, I also arrived at the strong suspicion as @Zohar that you are a shill for HA. Your credibility here stinks, even if you may be correct in part.

    Do us all a favor and don't come around here strutting your arrogant peacock feathers and treating us like we are clueless noobs. If you are an actual collector, then stay and enjoy the camaraderie. Otherwise, please just leave us alone.

    EVP

    I am far too small a fish to be a shill for anyone.

    I do not speak from arrogance but to point out the part of the argument that everyone keeps avoiding. While you may well be aware of the 100+% premiums, it has been completely missing from many of the early posts either from ignorance of its existence or willful disregard of it.

    Interestingly, your post drips of arrogance, assumptions and insult while I never did anything but point out facts.

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @Zohar said:
    /jmlanzaf Are you affiliated with an auction house or dealership... you seem very well rehearsed with respect to the process for someone who has done such little consignment/sales activity and joined the forum less than a week ago. If I am wrong then I am very impressed by the analysis and position taken as a smaller collector.

    Anyways, we will see how this plays out. I have not heard of a collector who gets more of the BP, other than dropping the sales commission so to me it really doesn't work in favor of your typical collector.

    I have no connection to an auction house. I'm a small-time dealer who mostly sells on eBay. Occasionally, I stumble across a better coin which I consign to Heritage. As a collector/dealer, I do have relationships with many larger dealers and so I know what terms they get.

    Most collectors, as you say, do NOT get 100+% of hammer. But it is less based on collector/dealer status and more on the quality of the material. A local dealer once had a silver-centered cent come in. It was just about the only coin this family owned as it had been in the family for 200+ years. Their ancestor was in the government in the 1790s and was given the piece as a result of his position. They got 110% of hammer because the auction house really wanted the piece.

    I also know a medium-sized dealer who only gets 100% of hammer. Why? His total volume of consignments to Heritage is not that large. A smaller dealer I know gets 103% of hammer because his total volume of Heritage consignments is much higher.

    But for collectors of inexpensive material - which is mostly what I am - the situation is much more nuanced.

    Would I get a better price from Heritage even with the 20% BP than I would get on eBay (10% fees)? Probably - if it is something Heritage would take.

    Would I get a better price from Heritage with a 15% BP than a 20% BP? It's hard to say, because it depends on where the 5% went. Even if the 5% went to the silver-center cent, that increases the visibility of that entire auction. So if I have material in that auction, I might still get the benefit of higher yield.

    I just think one needs to take a broader picture of the economics of the entire situation rather than strictly focussing on BP alone. In the end, whether the BP is 15%, 20% or 25%, the auction House determines how the BP and the Sellers' Premium get dispersed. And they need to actively work on the quality of their business in order to get the best hammer prices. That does take money.

    I would gladly take all consignments you would like to send. I have a 0% BP and a 12% seller's premium. But you would be a fool to send it to me rather than Heritage because I can't get you anywhere near the exposure that they will. You would be much better served by them at 20% BP + 10% SP even though nominally they are getting 30% of the transaction and I'd only be getting 12%.

  • jmlanzafjmlanzaf Posts: 31,614 ✭✭✭✭✭

    @brg5658 said:

    @jmlanzaf said:

    @brg5658 said:
    This topic is being discussed at length on the US boards also.

    Link here.

    It was a mere 5 years ago (August 1, 2012) when Heritage made the move from 15% to 17.5% for coins. So, can I expect it to be 25% in 2027, and possibly 30% by 2037? Where does the greed stop and the sanity set in?

    I only see that technology advances have eased their lives. Yet, they want more and more of the cut. Their online-only auctions are handled by software (HeritageLive!). Visibility of auctions via the internet to millions of potential bidders, instead of needing to call-in or be physically in an auction room. If they wanted to cut the costs, they don't need to mail paper catalogs or pay the people who lay those out -- that's an antiquated practice of the past. They don't have to take photos of coins with film-cameras (develop them, size them, etc. ) Now, they have an army of digital photographers who take fixed/standard photos with little or no actual thought/effort put into them.

    It's like when eBay said they were doing us a favor by making the final value fee on all items an even 10%. Now we're supposed to believe Heritage is being more competitive by raising their buyer's premium. How stupid do they think we are? Completely illogical.

    You are ignoring how much of that buyer's premium goes to consignors. Major dealers get as much as NEGATIVE 5% seller fees - that's right, they get 5% of the 20% BP. That encourages the placement of better coins into the auction. With the extra 2.5% BP, I would expect the kick back to consignors to increase accordingly.

    The just as likely scenario is that fewer people will bid because they are just fed up with the greed. So, the consignor may be getting that extra 5% on a smaller final sale value. The only entity making a profit here is the middle-man Heritage.

    That can't be true or no one would consign to Heritage. I was pleased with the results of my consignments to them even though they may have made more money than I did. I simply could not have yielded as much if I had sold directly to a dealer or put it on eBay.

  • marcmoishmarcmoish Posts: 6,207 ✭✭✭✭✭

    Yikes guys, its called business, relax.

    Simply bid a tad lower and mark your bids now at 20%. We are all used to doing exactly that at 17.5 so I fail to see what all the hoopla is, and bad venom against HA...

    Besides I believe SB also did exactly the same move this month.

    I'm going to the lite-side now where no one needs anger mgmnt tips :#

  • OriginalDanOriginalDan Posts: 3,713 ✭✭✭✭✭

    But but but...greedy bastards!

  • brg5658brg5658 Posts: 2,384 ✭✭✭✭✭

    @marcmoish said:
    Yikes guys, its called business, relax.

    Simply bid a tad lower and mark your bids now at 20%. We are all used to doing exactly that at 17.5 so I fail to see what all the hoopla is, and bad venom against HA...

    Besides I believe SB also did exactly the same move this month.

    I'm going to the lite-side now where no one needs anger mgmnt tips :#

    When the coin auction universe in the USA is mostly 2-3 large companies who always move BP rates in concert, it is an effective monopoly.

    Yes, we can do the remedial arithmetic to modify our bids in auctions. But, the principle is what's in question here. Where does one draw the line of insanity and greed? That decision is not ours to make, but as a consumer who will eventually need to be a consignor, I can take my business elsewhere.

    -Brandon
    -~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-
    My sets: [280+ horse coins] :: [France Sowers] :: [Colorful world copper] :: [Beautiful world coins]
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  • AbueloAbuelo Posts: 1,758 ✭✭✭✭✭

    GreatCollections... :-)

  • 7Jaguars7Jaguars Posts: 7,228 ✭✭✭✭✭

    I just don't see them as a competitive venue with the two listed, at least as regards foreign and ancient.

    Love that Milled British (1830-1960)
    Well, just Love coins, period.
  • AbueloAbuelo Posts: 1,758 ✭✭✭✭✭

    @7Jaguars said:
    I just don't see them as a competitive venue with the two listed, at least as regards foreign and ancient.

    For sure not for world coins, even when once I'm a while you find big surprises. For US coins they are as good as they come I think. But they are an alternative. Low fees, fast payment. But their world coin selection is limited.

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