Stack’s Bowers and Heritage to increase buyer’s premium to 20 percent
Gluggo
Posts: 3,566 ✭✭✭✭✭
Glad one market analyzer thinks it wont affect my buyers pay. 
https://www.coinworld.com/news/us-coins/2017/07/stacks-bowers-heritage-increase-buyers-premium.html
Market Analysis: Change will likely have no effect on prices coin buyers pay.
The upcoming official auctions held at the American Numismatic Association World’s Fair of Money in Denver the first week of August will represent the end of an era as the sales mark the final year of a 17.5 percent buyer’s premium for the convention’s official auctioneers: Stack’s Bowers Galleries and Heritage Auctions.
On June 30 Stack’s Bowers announced that, effective Aug. 14 with its Hong Kong Showcase Auction, it would be standardizing its buyer’s fee to 20 percent across all auction formats including live and online sales. The firm’s president, Brian Kendrella said in a statement, “Our new buyer’s premium remains one of the lowest of all major collectibles and now provides our clients simplicity and uniformity when participating in our auctions regardless of the auction location, format or bid source.”
Heritage confirmed with Coin World that it would also introduce a 20 percent buyer’s fee for all U.S. and World coin auctions after Aug. 14.
Auctioneers dealing in similar areas often move together when announcing rates. In September 2016 Christie’s announced that it would be raising buyer’s fees and Sotheby’s quickly followed a month later.
Comments
Isnt it already 20%?
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
This move represents an opening for dealers to become more competitive both in buying and selling. Will they take advantage of the opening or continue to allow more and more business to go the auction route?
This move to a 20% buyers commission will likely have the most impact on the bulk of what is in most auctions ... ordinary coins. Will buyers of ordinary material "pay up" or will they just cut the amount of their bids or stop bidding in auctions altogether? The trophy material will continue to exist on its own high end world of wealth. Bidding on that material will continue as always.
Isnt it already 20%?
Yup. It's the S-B Ponterio commission structure that's changing.
No change equals no move equals no new opening.
Even @BillJones likely still buys coins whenever he can. Fortunately, he finally got a sweet '77 20c from a Forum member, not at auction (possibly undermining my point a bit).
Totally irrelevant populist rant spread by the politically-subversive Innumerrati. Malarkey
Everyone should, by this time, understand that a buyers fee is an artificial construct simulating a pseudo-hammer result being utilized as a opening ploy in the auctioneer's commission gambit with the seller. It has no practical impact (less than 1.3% in the most extreme cases) on the gross and net amounts the buyer ultimately pays. LOL, they're the same, "Hammer Hoodoo" notwithstanding.
A momentary pause, on the way to 25% undoubtedly.
But, as far as I can tell, Heritage and Stacks have been at 20% for a while now.
Yes they have been 20% for awhile now in the US
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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......
It amazes me they still get the volume of consignments they do. I suspect almost any dealer on this forum would be tickled pink if they could make 20% straight across the board on everything they sell! On top of that the auction houses have no financial risk...AKA they don't have to buy what they sell!
edit to add...I know there are negotiated reduced rates but I'm sure they are made up buy those that also pay both ways with no negotiated commission.
Well the fees are discounted significantly on important coins. I will be consigning my collection of major errors soon and will be looking for something over hammer from either of the two houses named.
Regarding the financial risk, the cost of security, transport, cataloging, consignment directors and pizza, adds up quickly.
The article is from 2017!
Sunshine Rare Coins
sunshinecoins.com/store/c1/Featured_Products.html
My max bid there wb 80 pct of CDN then if even that much.
I think the consignors would do better shopping their material around the bourse of a show if not getting a table. Or for that matter eBay or GC.
The market is slightly southward of steady at best forcing tight margins plus we are in the summer doldrums. I would think auction houses wb reducing fees. I am sure their competitors are not crying.
Ebay buyers pay no fee and if an eBay seller drops some items to bid plus 10–15 pct he may capture some new traffic. Certainly a nice item starting at 95 pct of bid on the Bay will attract bidders (sold many this way for blowout).
If I could get my current CRC investment plus 20 pct would sell it all. Reposition in fewer slabs keep the 20 pct.
Why was the ancient article posted without any indication of its age????????? I withdraw my earlier comments.
A couple of thoughts....
1)I believe I have been paying close to 20% already? Charge 20, 25, 30 it really doesn't matter to me. I simply adjust my buy price to reflect the higher vig. Thus I am not paying the higher price no matter where the commission is struck.
2)Yes, this impacts the seller. I have always thought that the largest sellers on Heritage are A) estates who need the Heritage credibility (They pay no to very little Comm but still get hit by the comm reflecting a lower hammer price) and
Heritage themselves from inventory.
We are still 17.5% and plan on staying that way.
Can't say the higher fees have made any neg difference in bidding
As a bidder I prefer the 20% figure. Calculating the pre juice number is a little easier.
I do like the round number though. Let’s say budget $120 k you could bid on five $20k ish items and your there. Then the phone beeps and says your $19,548 dividend check transferred to your bank acct. and u think to yourself “why not bid on one more.”
If the coin really nice must have then don’t worry about juice.
We're still at 10% (for check/wire payments) and have no plans to change.
10% is even easier than 20% to calculate @Coinstartled !
Owner/Founder GreatCollections
GreatCollections Coin Auctions - Certified Coin Auctions Every Week - Rare Coins & Coin Values
Ian,
double like!
When I buy a coin, I consider my eventual exit strategy. When one of the easiest and most popular ways to dispose of a coin is no longer such a good deal, it strongly influences my desire to participate.
Most of the time, the BP is irrelevant to the total PR. But every now and then, your underbidder will be an amateur who does not take the BP into consideration, and it will cost you.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
...and i do it every Sunday, Ian.
Hmm... 20% "buyer's fee" + 5% "seller's fee" + up to 28% in capital gains tax = as high as 53% gone (at least as to the taxable portion)... Couple this with grade inflation and a down market, and there is no wonder why the market has been hurting so much. Who would anyone want to sell nice coins under those conditions (save for rare exceptions)?
Why would the fees make a major difference for bidders? It is the consignor that effectively eats the fees anyway. (Not a snipe at you, but a general observation).
The fees make a difference because of the bid increments can cause higher bids and it's harder to sell for upgrades.
That being said, I can't say it's changed my bidding behavior. Things are pretty competitive these days.
I recommend adding the buyer's and seller's fees together - that is what the auction house is charging for the transaction. At the end of the day, it comes out of the consignor's check, since obviously a lower buyer's fee means someone can bid higher. Bidding higher = a higher hammer price, and the hammer price is what the consignor is paid off of.
Owner/Founder GreatCollections
GreatCollections Coin Auctions - Certified Coin Auctions Every Week - Rare Coins & Coin Values
Agree that the seller eats the fees (with rare exception.) Problem with higher transaction costs is that the market becomes much less liquid. A dozen years ago when the Ebay platform was lucid, an casual collector could buy a $500 coin and if the market was stable he could resell the coin and easily absorb the 6-7% transaction cost (including shipping.)
Today it is 10% to Ebay, 3% to Paypal maybe 8% to the tax man and 2% for the shipping. So we are bumping up to nearly 25%. The promise of the internet has exposed itself as a trojan horse.
Does that mean HA and SB are 30% with taxes and shipping?
Agree higher fees means changing behavior, generally less buying and longer holding times. This sounds like it could be contributing to bifurcation as certain coins aren't worth buying with high transaction costs.
Heritage would be 5% +20% +4% shipping +8% tax in the example I used earlier. There is some overlap on fees but on a small consignment, the transaction cost is significant.
So:
If I posted a old article I do apologize. I seen it in my email today at work and just forwarded the article.
Work is very busy so I get about 30 seconds to enjoy myself and tried to do a quick post. Sorry if it’s old. I have 11 welders that I have to watch does not leave me much time . But work is good!
What portion of that 20% can my trusted dealer get on my consignments?
"Look up, old boy, and see what you get." -William Bonney.
No problem. Subject always "sparks" a good discussion.
.
10% is simple, so is 100%
Looking somewhat to defend E-bay (cost of doing business has risen over time) or side track the thread.... here is how I view the costs.
Sell 6.15% (cheaper for more expensive stores and higher volume but...) + 3% paypal + 2% ship (larger sellers pay a lot less since they insure privately).= 11.15
However, the buyer will; generally pay more for their purchases since... CC will rebate 2% + E-Bay 1 %. thus sales often will be 3% higher than a cash site (so I am talking a net 8.15%).
In addition, the perks E-Bay offers ((E-Bucks bonus $100/coin) mean buyers often pay $50-$100 higher since their net comes way down often offsetting much of the selling comm.
I really am talking generic coins not rarer species.
OK, I missed something.
Quote 5-7.5% comm(?) on consignments?
Just have to remember what the 'real' max be at all times
The article is from 2017
All comments reflect the opinion of the author, even when irrefutably accurate.
You are missing the cost of running a standard B&M for comparison. 10% of those costs are the same (8% tax + 2-3% CC processing).
All comments reflect the opinion of the author, even when irrefutably accurate.
No, I think he means NEGATIVE 5-7% in fees. The auction houses will kick back some of that 20% to preferred sellers on premium material.
All comments reflect the opinion of the author, even when irrefutably accurate.
I misread the other post.
Kagin’s buyers premium @ANA money show in Pittsburgh was 22.9% unless you paid cash. They added on the 2.9% credit card fee. It won’t be long until the other auction firms adopt this practice. I wouldn’t like carrying large amounts of cash for my winning bid.
h higher transaction costs is that the market becomes much less liquid. A dozen years ago when the Ebay platform was lucid, an casual collector could buy a $500 coin and if the market was stable he could resell the coin and easily absorb the 6-7% transaction cost (including shipping.)
eBay is 6.15% on coins if you have even a small store. Taxes are the same everywhere. So a FAIR comparison has:
STack's/Heritage at 20% + couple % shipping = 22% + 5% if you don't get seller fee waived = 27%
GC at 10% + 5% + couple % shipping + $5 set up fee (maybe 1-2% depending on coin) = 18 or 19%
eBay = 6.15% + 3%+2% = 11%
Again, you can add 8% tax to ALL those numbers if you want, and that gives you a FAIR comparison of:
eBay - 19%
GC - 26 or 27%
Stack's Heritage - 35%
Yay, eBay!!! [Even at 10% eBay fee with no store, you are still at only 23%.] So, the Trojan horse is still winning the race.
All comments reflect the opinion of the author, even when irrefutably accurate.
Buy what you like for a price you are comfortable with..... If you do not like added fees, go elsewhere... If you must have the coin, the pay the fees. Cheers, RickO
The Trojan horse may be winning the race, but the Alpo truck awaits him at the finish line.
A transaction cost jump from 7% to 23% is a momentum killer for what was once the magical ability for online users to get in and out of collections.
It is moot to argue whether the taxation of collectibles that carry an investment component is equitable, as no one here can change that.
GC does this now
All comments reflect the opinion of the author, even when irrefutably accurate.
Come on, that’s not how math works. You also don’t get taxed on the parts that don’t net you income. If you bought a coin for $100 and resold it at auction for $192 (including BP) then that means a hammer of $160. I doubt most people pay the sellers fee but add another $8 so the consignor nets $52. Tax that at 28% and you net $37.44. That is quite a bit lower than the new sale price, for sure (28.4%) but nowhere near 53%. Now, your profit % went from 92% to 37.4% but those numbers depend on the original purchase price, which makes it an erroneous comparison. Lastly, if you are thinking about a down market and you lose money on the transaction (after fees) taxes work in your favor.
Tight buy/sell spreads and lower auction premiums are advantageous for numismatics as being more of a clearer valuation structure. Isn't cac pricing with clear "buy" prices one of the more transparent market realities of the last 10 or so years? How did big auction premiums translate with Greysheet, do you have to deduct auction buying and selling premiums to come up with accurate pricing?
O% buyer fees of course are the easiest to calculate. Have not been to the David Lawrence site for many years, but that was their strategy. Same with Ebay.
100% buyer fees would work well also as you just bid half of what you are willing to pay for a coin at auction.
It would be a smoother auction experience if Stacks and Heritage front ended the fees to the seller. Not sure though that smooth is what they are looking for.
Gosh Rick, this all sounds pretty complicated...... Can you go over this again for me?