@Rexford said:
The discussion has gotten very muddled and gone in strange directions. There are only two things to consider when addressing the original question of what the most profitable route would be: what auction house has the least fees (including negotiations made), and which auction house will get the highest TOTAL price (hammer + bp) for the items? Since the OP already the various auction house fees figured out (and any negotiations are his to make), the only question left is which auction house (if there is a real difference) will achieve the highest TOTAL price for his specific items, if he chooses to go the auction route. Anything else is not relevant.
Agreed, but doesn't this run contrary to the premise that the buyer is taking into account what the buyer's fee is in placing his bid? As a bidder one would be in a position to bid less in an auction with a lower buyer's fee, correct? If this premise is correct, then the logical conclusion that follows would then be that a seller may be in a better position to see his lot sold by the auction house that charges the lower buyer's fee.
That is not to say that other intangibles might be in play such as the size of the bidder base that auction house A might have over auction house B.
@1northcoin - With a lower Buyer's Fee, the Buyer can bid HIGHER, not lower, to end up with the same gross cost.
For example, ignoring bid increments, if Auction House A charges 10%, and Auction House B charges a buyer fee of 20%, you can place a hammer bid of $909.09 at Auction House A (to end up with a total cost of $1,000), but must reduce the hammer bid to only $833.33 at Auction House B to end up with that same total cost of $1,000.
As you can see, one can bid higher with a lower Buyers fee, but must bid even lower with a higher buyers fee.
A day without fine wine and working on your coin collection is like a day without sunshine!!!
It's too bad this thread has essentially turned into yet another debate on the impact of BP. Assuming the percentage of total realized (NOT hammer) price returned to the seller is within 2-3% between auction houses, I would put it low on the list of considerations. Questions I would ask:
Would descriptions likely induce higher bidding on these coins? (maybe yes if there were interesting provenance, etc.)
Would the photography style of auction house X show these coins in a good light?
How quickly do I want/need to get paid? (N.B. many auction firms will advance the consignor a fairly high percentage of expected proceeds)
Would these coins benefit from lot viewing? (maybe less relevant currently than otherwise)
Is this the type of material that has historically brought strong prices at auction house X?
Are the majority of other coins offered by auction house X stickered?
Etc.
It may well be that I'd decide that certain coins would do better at one venue and the rest at another. The potential downside of that strategy is that you'd have less negotiating power on getting a nice cut of the BP.
Normally I'd say venue is very important (LA, FUN, NYCity, Baltimore - in non-winter months). But in this case who knows. The coins themselves and their PQness and possible older holders is just as critical and can swing prices -20% to +100%. If the owner is not a pro grader and market pricer, they need someone who is....or they leaving a big hole in their game plan.
In the heat of bidding some bidders forget about backing out the BP, or miscalculate it. We've all done it in a busy auction. Heritage or Stacks/Bowers should be in on this discussion too as both of them imo get a wider audience of TOP players vs GC and Regency.
IF in doubt.....then wait until the smoke clears. One boost for the coin business are gold and silver prices continuing to move up. A lot of doom and gloom in the economy right now which is a bad environment for auction coins. If your 2 choices are only REG and GC I'd probably lean towards GC. But they don't have the ability to state a coin is high end or PQ for the grade. The photo has to dazzle buyers. Tough decision. But at least you have mostly all CAC coins and nice ones....something all auction houses want a piece of.
The whole issue with the buyer's fee is off topic!
But, for those who are mathematically illiterate, let's illustrate this way:
For fun, consider an auction house with a 10% buyers fee and one with a 20% buyer's fee. Let's say a bidder is willing to spend $10,000 total to acquire a coin. Let's assume each auction house has a 10% seller's fee.
In scenario one, the coin hammers for $9,000 and the buyer pays $10,000. The consignor gets $8,100 (81% of the sale price).
In scenario two, the coin hammers for $8,000 and the buyer pays $10,000. The consignor gets $7,200 (72% of the sale price).
Now, the seller's fee is negotiable, but any money coming out of the deal for buyers fees or sellers fees is money the consignor doesn't get. As has been said, a consignment of 6-figures should never incur a sellers fee and most consignor would be able to get somewhere around 107% of hammer (effectively a negative sellers fee).
For fun, here are the two scenarios with a 107% hammer negotiation:
In scenario one, the coin hammers for $9,000 and the buyer pays $10,000. The consignor gets $9,630 (96% of the sale price).
In scenario two, the coin hammers for $8,000 and the buyer pays $10,000. The consignor gets $8560 (86% of the sale price).
Pretty much, an auction house with a 17.5% buyer's fee comes out nicely any way you slice it.
@1northcoin said:
Responses have been instructive. When all is said and done it sounds like all agree that to the buyer it is going to be more attractive to bid in the auction that has the lowest buyer's premium period.
Given that fact it would seem there would be at least some incentive for auction house A to lower its buyer's fee to match auction house B's buyers fee on lots that it wants to acquire in the same way it is agreeable to lower the seller's fee on such lots. Is this ever done to stay competitive?
I don’t agree. As I stated in my previous post, the amount of the buyer’s premium should be of no concern to bidders. All they need do is adjust the amount if their hammer bids, to take the buyer’s premium into account.
It seem some people are able to adjust their bidding to the BP and others are not. For those that can, the venue doesn't matter. For those that cannot, it does matter.
I'm still not sure why major auction houses don't move to having buyers simply bid the purchase price and have the BP backed out of it in accounting. Is it just tradition and inertia at this point?
Everyone should be able to adjust their bids - it’s pretty easy. Regarding the auction houses backing out the BP
I actually don't think it's that easy for most people in a live bidding situation. Just take half a second to think what's 117.5% of $7600 and then adjust it every few seconds as the bid increment changes.
I’m guessing that could be done for on-line bids but that it would be problematic for live floor bids.
I don't think it would be that difficult to change floor bids. Bid increments would need to move to final price but that may be the only change in a live bidding scenario.
Typically, you round to 20% and the math is pretty easy.
That's inaccurate, and it would be easier to not have to do it every few seconds
LOL. True. But, again, for anyone fairly numerate, it's not that hard unless you are jumping bids. If you are on $100 bid increment, you just add $120 to your previous bid. I'm sure some people find it challenging, but it would save you a ton of money to be able to do it. And, you can't blame the auction houses for the sales tax which you'd also have to consider
It seems like an old school thing to do. Why not just modernize and join the 21st century
If someone can't calculate the net bid with the premium they really have no business bidding in the first place. If someone is struggling so mightily with the calculation they can write down their max bid with the premium backed out and just don't bid more than that number. (If max price is $3000 write down $2553 for 17.5% premium.)
I think members here believe that Great Collections is more prominent than they really are, and that buyers of coins which will probably sell for $10-20k don't typically go to that site to find them. also, Legend has a much better customer base which buys that caliber of coin(s) so they are probably more adept at the marketing side of things. to that end, it would seem a higher price realized will happen with the OP coins being sold with other like-value coins in a more premier setting such as what Legend offers.
I think all the haggling over being right about the "backed out bid" and the "sellers fee" is sort of silly. as TDN noted, there won't be a "sellers fee" and I would assume that these coins, valued where they are valued, aren't the kind of coins where a buyer is stuck to a sheet price value that they'll be backing up from. if the coins are the quality that the OP seems to have us infer, they would have a premium that ends where the largest cajones reside.
@keets said: I think members here believe that Great Collections is more prominent than they really are, and that buyers of coins which will probably sell for $10-20k don't typically go to that site to find them. also, Legend has a much better customer base which buys that caliber of coin(s) so they are probably more adept at the marketing side of things. to that end, it would seem a higher price realized will happen with the OP coins being sold with other like-value coins in a more premier setting such as what Legend offers.
I think all the haggling over being right about the "backed out bid" and the "sellers fee" is sort of silly. as TDN noted, there won't be a "sellers fee" and I would assume that these coins, valued where they are valued, aren't the kind of coins where a buyer is stuck to a sheet price value that they'll be backing up from. if the coins are the quality that the OP seems to have us infer, they would have a premium that ends where the largest cajones reside.
Yeah, the real players don't bother with Great Collections:
@winesteven said: @1northcoin - With a lower Buyer's Fee, the Buyer can bid HIGHER, not lower, to end up with the same gross cost.
For example, ignoring bid increments, if Auction House A charges 10%, and Auction House B charges a buyer fee of 20%, you can place a hammer bid of $909.09 at Auction House A (to end up with a total cost of $1,000), but must reduce the hammer bid to only $833.33 at Auction House B to end up with that same total cost of $1,000.
As you can see, one can bid higher with a lower Buyers fee, but must bid even lower with a higher buyers fee.
@winesteven said: @1northcoin - With a lower Buyer's Fee, the Buyer can bid HIGHER, not lower, to end up with the same gross cost.
For example, ignoring bid increments, if Auction House A charges 10%, and Auction House B charges a buyer fee of 20%, you can place a hammer bid of $909.09 at Auction House A (to end up with a total cost of $1,000), but must reduce the hammer bid to only $833.33 at Auction House B to end up with that same total cost of $1,000.
red
As you can see, one can bid higher with a lower Buyers fee, but must bid even lower with a higher buyers fee.
Bid less as in pay less.
If a given coin type, date and grade has consistently been selling in the $100 range, you’re probably not going to win one for less, just because it appears in a sale with a lower (or no) buyer’s premium. If it’s worth $100, it doesn’t matter if a buyer bids/pays $100, with no buyer’s fee or $50, with a 100% buyer’s fee.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
For those that struggle with a 17.5% buyer's fee.....just use 20% for now.....which is more in your favor. You might get less wins but you won't screw up. Or use 10% and then double that amount. Or you use 20%....then back 10% of that amount out. In any event, a 20% buyer's fee is coming to us someday and that will make things "easy" again.
Comments
Agreed, but doesn't this run contrary to the premise that the buyer is taking into account what the buyer's fee is in placing his bid? As a bidder one would be in a position to bid less in an auction with a lower buyer's fee, correct? If this premise is correct, then the logical conclusion that follows would then be that a seller may be in a better position to see his lot sold by the auction house that charges the lower buyer's fee.
That is not to say that other intangibles might be in play such as the size of the bidder base that auction house A might have over auction house B.
@1northcoin - With a lower Buyer's Fee, the Buyer can bid HIGHER, not lower, to end up with the same gross cost.
For example, ignoring bid increments, if Auction House A charges 10%, and Auction House B charges a buyer fee of 20%, you can place a hammer bid of $909.09 at Auction House A (to end up with a total cost of $1,000), but must reduce the hammer bid to only $833.33 at Auction House B to end up with that same total cost of $1,000.
As you can see, one can bid higher with a lower Buyers fee, but must bid even lower with a higher buyers fee.
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
It's too bad this thread has essentially turned into yet another debate on the impact of BP. Assuming the percentage of total realized (NOT hammer) price returned to the seller is within 2-3% between auction houses, I would put it low on the list of considerations. Questions I would ask:
Would descriptions likely induce higher bidding on these coins? (maybe yes if there were interesting provenance, etc.)
Would the photography style of auction house X show these coins in a good light?
How quickly do I want/need to get paid? (N.B. many auction firms will advance the consignor a fairly high percentage of expected proceeds)
Would these coins benefit from lot viewing? (maybe less relevant currently than otherwise)
Is this the type of material that has historically brought strong prices at auction house X?
Are the majority of other coins offered by auction house X stickered?
Etc.
It may well be that I'd decide that certain coins would do better at one venue and the rest at another. The potential downside of that strategy is that you'd have less negotiating power on getting a nice cut of the BP.
Normally I'd say venue is very important (LA, FUN, NYCity, Baltimore - in non-winter months). But in this case who knows. The coins themselves and their PQness and possible older holders is just as critical and can swing prices -20% to +100%. If the owner is not a pro grader and market pricer, they need someone who is....or they leaving a big hole in their game plan.
In the heat of bidding some bidders forget about backing out the BP, or miscalculate it. We've all done it in a busy auction. Heritage or Stacks/Bowers should be in on this discussion too as both of them imo get a wider audience of TOP players vs GC and Regency.
IF in doubt.....then wait until the smoke clears. One boost for the coin business are gold and silver prices continuing to move up. A lot of doom and gloom in the economy right now which is a bad environment for auction coins. If your 2 choices are only REG and GC I'd probably lean towards GC. But they don't have the ability to state a coin is high end or PQ for the grade. The photo has to dazzle buyers. Tough decision. But at least you have mostly all CAC coins and nice ones....something all auction houses want a piece of.
The whole issue with the buyer's fee is off topic!
But, for those who are mathematically illiterate, let's illustrate this way:
For fun, consider an auction house with a 10% buyers fee and one with a 20% buyer's fee. Let's say a bidder is willing to spend $10,000 total to acquire a coin. Let's assume each auction house has a 10% seller's fee.
In scenario one, the coin hammers for $9,000 and the buyer pays $10,000. The consignor gets $8,100 (81% of the sale price).
In scenario two, the coin hammers for $8,000 and the buyer pays $10,000. The consignor gets $7,200 (72% of the sale price).
Now, the seller's fee is negotiable, but any money coming out of the deal for buyers fees or sellers fees is money the consignor doesn't get. As has been said, a consignment of 6-figures should never incur a sellers fee and most consignor would be able to get somewhere around 107% of hammer (effectively a negative sellers fee).
For fun, here are the two scenarios with a 107% hammer negotiation:
In scenario one, the coin hammers for $9,000 and the buyer pays $10,000. The consignor gets $9,630 (96% of the sale price).
In scenario two, the coin hammers for $8,000 and the buyer pays $10,000. The consignor gets $8560 (86% of the sale price).
Pretty much, an auction house with a 17.5% buyer's fee comes out nicely any way you slice it.
I would use Great Collections.
If someone can't calculate the net bid with the premium they really have no business bidding in the first place. If someone is struggling so mightily with the calculation they can write down their max bid with the premium backed out and just don't bid more than that number. (If max price is $3000 write down $2553 for 17.5% premium.)
I think members here believe that Great Collections is more prominent than they really are, and that buyers of coins which will probably sell for $10-20k don't typically go to that site to find them. also, Legend has a much better customer base which buys that caliber of coin(s) so they are probably more adept at the marketing side of things. to that end, it would seem a higher price realized will happen with the OP coins being sold with other like-value coins in a more premier setting such as what Legend offers.
I think all the haggling over being right about the "backed out bid" and the "sellers fee" is sort of silly. as TDN noted, there won't be a "sellers fee" and I would assume that these coins, valued where they are valued, aren't the kind of coins where a buyer is stuck to a sheet price value that they'll be backing up from. if the coins are the quality that the OP seems to have us infer, they would have a premium that ends where the largest cajones reside.
Yeah, the real players don't bother with Great Collections:
https://greatcollections.com/Coin/846563/1907-Saint-Gaudens-Gold-Double-Eagle-MCMVII-High-Relief-Flat-Edge-PCGS-MS-67-CAC
Bid less as in pay less.
If a given coin type, date and grade has consistently been selling in the $100 range, you’re probably not going to win one for less, just because it appears in a sale with a lower (or no) buyer’s premium. If it’s worth $100, it doesn’t matter if a buyer bids/pays $100, with no buyer’s fee or $50, with a 100% buyer’s fee.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
For those that struggle with a 17.5% buyer's fee.....just use 20% for now.....which is more in your favor. You might get less wins but you won't screw up. Or use 10% and then double that amount. Or you use 20%....then back 10% of that amount out. In any event, a 20% buyer's fee is coming to us someday and that will make things "easy" again.