Options
Heritage Auctions
cinque1543
Posts: 545 ✭✭✭✭
I saw a coin on Heritage Auctions that I was kind of interested in. I haven't purchased from HA before, and I'm not sure how their buyer's fees work. But in this instance the fee (premium) is 22%. Ouch. Is this normal?
0
Comments
Yes unfortunately
heard thats why some left is because of the bp, bummer to
Regardless of how high the buyers premium is your maximum bid should take into account the buyers premium. As an extreme example if you’re interested in a coin that you’re willing to pay $1000 for and the BP is 100% your maximum bid should be $500.
This
Dave
Stacks and Bowers increased their buyers premium too
Positive BST as a seller: Namvet69, Lordmarcovan, Bigjpst, Soldi, mustanggt, CoinHoader, moursund, SufinxHi, al410, JWP
Yes, I get it. But to get the most for their coins, it seems like sellers would migrate to Great Collections (or other platforms).
Most sellers on HA or SB get a percentage of the buyers premium back.
Yeah. It seems. And yet it doesn't happen. Can you think of any reasons why?
You would also think convenience stores wouldn't exist, since everything they sell can be purchased for less money elsewhere. And that luxury resorts wouldn't exist, since less expensive places to sleep exist pretty much everywhere they are located. Same with credit cards that come with fees, seats on airplanes that cost more than others, since the entire plane gets to the gate at the same time, etc.
Bottom line -- if HA is able to attract more eyeballs to an auction, that will likely result in a higher hammer price. Not to mention, the higher the BP. the more room HA has to negotiate a rebate for the seller. Either bidders are stupid and don't take BPs into account when bidding (true in some cases), or sellers are stupid and don't care about getting "the most for their coins" (also true in some cases).
The one thing you can take to the bank, though, is that HA knows what it is doing, and this does not hurt its business.
Interesting. Didn’t know that.
And your suggestion only applies to widgets which almost always sell for the same amount. Stacks gets way more money for mist exonumia, as an example, than GC will get. It's net dollars that matter, not percentage.
All comments reflect the opinion of the author, even when irrefutably accurate.
It does get complicated if an auction house does not allow random number bids and instead utilizes fixed increments. For example, a $1,000 bid with 20% commission results in a $1,200 sale and a 22% commission forces a $1,220 sale. In the case of the later, there is no way to adjust one's bid to result in a $1,200 sale.
Higher buyers’ fees make auction purchases less and less attractive. Yea, some people, mostly dealers, figure them in, but more than a few buyers don’t care.
I have to really want the lot to buy it at auction now.
I attended a private political items auction this week. With no buyers’ fees, it was fun. The buyers’ fee rates are out of hand. The auction houses do it all for consigners, but there are two sides to a transaction.
I can't think of a lot of $1200 coins that I wouldn't pay $1220 for.
My only real issue is the $29 minimum at HA. That makes it REALLY hard to get on the right increment on coins under $100.
My favorite HA invoice ever had a total of $216 in bids and $1972 in BP. LOL.
[I made money reselling those coins FWIW despite the 912% buyer's premium. One of many reasons why I think the BP obsession is silly. ]
All comments reflect the opinion of the author, even when irrefutably accurate.
If they don't care, what makes you think they wouldn't just bid higher even if there's no BP?
All comments reflect the opinion of the author, even when irrefutably accurate.
I think it's likely many do care and they're willing to pay it. Just because somebody pays more than you think something's worth doesn't mean it's not worth it to them.
For me it increases every bid by 22%. That doesn’t matter to some people.
That’s why I MUCH prefer to buy at shows. Many of the guys who bid in auctions would not pay the same or lesser amounts via private treaty.
Maybe some people think 22% more is a reasonable bid. Not everybody values the same coin equally.
That seems unlikely, but- so what? There's not much you can do about how other people persue their collecting interests, is there? So why worry about it?
Well put. Very true.
As a small-time seller, this is very true.
Lots of guys are “auction buyers” and bid big bucks at auction but always think they are being ripped off if you offer them something reasonable at your table.
Go figure.
That extra $20 is easy money for the auction house.
The attitude seems to “If someone else is bidding, it must be good.” The response is, not necessarily, and perhaps not necessarily at that price level, including the buyers’ fee.
One indicator is to look at the responses from posters on the “guess the grade” strings. Some of the responses are completely inaccurate. Some people don’t know how to grade which is essential to determining values.
One more thing to keep in mind is that the serious bidders often don’t show up until the end. Something “look cheap” for days, and then reality sets in when the lots closes.
Why couldn't it work the other way? Since you can't get to $1200, everyone stops at $1179 ($950 + 22%) and it costs the house $21?
All comments reflect the opinion of the author, even when irrefutably accurate.
If a bidder’s going to stretch on their maximum bid, do you think they’ll only do so when there’s a buyer’s premium involved (but not stretch when there isn’t one)?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I have always had good experiences with Heritage auctions. I was always made aware of what the BP dollar amount was before I hit submit bid. Just adjust your bids accordingly.
Successful BST with drddm, BustDMs, Pnies20, lkeigwin, pursuitofliberty, Bullsitter, felinfoel, SPalladino
$5 Type Set https://www.pcgs.com/setregistry/u-s-coins/type-sets/half-eagle-type-set-circulation-strikes-1795-1929/album/344192
CBH Set https://www.pcgs.com/setregistry/everyman-collections/everyman-half-dollars/everyman-capped-bust-half-dollars-1807-1839/album/345572
As a bidder, buyer's premium is irrelevant. Bid your max, with buyers premium included.
Also, factor in the shipping costs if you want to be precise.
Heritage has all that info available when you are placing a bid.
Everyone that's a thinking bidder factors in the buyer's premium when buying. The small increase in buyer's premium by a smaller percentage than a cut bid will change few bidders' maximum, though. If there was a coin you wanted at $1200 ($1000 + 20%), would it be a hard pass at $1220? Would you lower your max to $1160 ($950 + 22%)? Perhaps in a softening market, but not today.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
If you have to adjust your bids because of any premium big or small then ii is relevant.
The point is whether the marketplace can absorb the higher bids, and is there price dislocation as a result.
As much of pricing is established by auction records, but not all, you can argue both sides.
It's also worth pointing out that Heritage doesn't force one to stay on the increment with the single exception of the live bidding portion of the auction. And they do have a cut bid potion even then.
All comments reflect the opinion of the author, even when irrefutably accurate.
This is so true! I knew people that only bought at auctions. I’m not sure if it was because of an ego trip, insecurities over making their own decisions, a combination of the two, or what.
I am very fond of both Heritage and Stack’s/Bowers and don’t care if I’m paying an extra 2% if I’m getting something that I haven’t seen in years. I have a couple of dealers that I contact to see if they have anything for me as the odds of me finding what I need at a show are remote at best.
That won't work at StacksBowers -
Increments: Showcase, Rarities and Collectors Choice Auctions
Bidding increments for Showcase, Rarities and Collectors Choice Auctions follow this table. Please note: bids need to be submitted at the correct bid increment. If you submit an off-increment bid, you will receive a message stating that the bid has been rounded down to the nearest increment under $500 and nearest half increment over $500.
Cut or Split Bids are accepted over $500.
BID INCREMENT
$0-$499 $20
$500-$999 $50
$1,000-$1,999 $100
Then don't bid there. Problem solved.
Who said you can't still get a good deal in spite of a 22% commission?
Agreed. I have won several items in auctions since the 22% rate and just factored it into my bid -- I won both well under my bid limit in one case and I had to bump the other up a bit during the live session.
The live session real bidding is a real positive for me, I do not like last minute sniping that runs on GC, although I buy a lot off there too.
Not me. You commented earlier that, based on bid increments, an auction house might get an extra $20 and I pointed out that, for anyone who is bothered by the idea the auction house might earn that extra money, one solution would be to not bid in their auctions.
Actually, what you proved is that it WOULD work at Stack's exactly as I said. (Heritage is even easier, it doesn't force you to stick to the increment.) The prior bid increment (at Stack's) to $1000 is $950. That's where I got the number.
All comments reflect the opinion of the author, even when irrefutably accurate.
The key is not to adapt to the world you live in but to force the world to become the world you want to live in.
It's funny that no one has even bothered to comment on the coins I made money on after paying a 912% buyer's premium!
All comments reflect the opinion of the author, even when irrefutably accurate.
I cannot say it's "normal", but it is certainly very elevated, in my opinion.
Edited to add: The amount I purchase from Heritage auctions has substantially decreased in recent years, although their ever-increasing BP is not the sole reason. My purchases from "other" auctions has proportionally increased.
Official PCGS account of:
www.TallahasseeCoinClub.com
.
All comments reflect the opinion of the author, even when irrefutably accurate.
I can't speak for anyone else, but I didn't comment because it doesn't really surprise me that you were able to do that. Some people seem to worry more about BPs than about what the coins actually sell for.
I do like the live auction at the end. That is where the action really happens. I've been trying to buy an AU Charlotte Half Eagle, and I bid on several at the last auction. Got nothing.
I agree. For the buyer, it shouldn't matter what the Buyer's Premium is. For the seller, it's a different matter, because their cut isn't as much depending on the BP. But for the buyer, it's the final price you pay that matters. $500 is $500, whether it includes a 22% BP, a 10% BP, or no BP.
There is a point being completely missed. The issue isn't that there is a BP - that's expected.
The issue is that the BP keeps escalating over time. That in turn means that agreements made with respect to seller premiums become proportionally distorted over time, which is not fair.
Official PCGS account of:
www.TallahasseeCoinClub.com
Was that coins also? Seem to recall you bought some of those canceled dies which, as I recall, mostly sold for $1 to $5 hammer range plus the minimum buyer's premium of somewhere around $29 to $32 at the time.
Either way that makes clear the good point that the amount of "buyers fee" does not matter. It is the final total that matters for the buyer regardless of how the accounting is done. The fee is ultimately only coming out of what a consignor will receive as the net amount. That is the case because the buyers control the price paid rather than consignors. I'm not a fan of the BP. I just deal with it as it is.
The beginning of the buyers fees trend in US coin auctions mostly began around 1981 to 1983 range as an accounting gimmick to try to catch unknowing consignors to fall for low or zero or below zero percent commission marketing (played up big in ads at the time) and to catch some buyers who don't understand the terms or forget about it. Guessing that those types of buyers are not a significant factor. Since then, the buyers fee has been an ever escalating game of keeping up with the Jones's (the other auction companies) by raising after another major company raises theirs. A bit like moving a clock ahead a couple minutes so you seem to have more time. Keep doing that and the hammer price gets farther and farther away from the actual price realized.
Most people are used to the game and it now seems like it has always been that way, so it is not ever going back (though would be revolutionary if a major company went back to no BP permanently - but would it affect getting consignments). There are now plenty of flavors available for buyers and sellers from zero percent (Ebay etc) to various BP amounts up to and probably above the current 22 percent for major coin auction companies.
As for those who are upset by the fees, I fully support your sitting out all such auctions - when I'm trying to buy. (Your bidding is fully encouraged when I'm trying to sell.)
"To Be Esteemed Be Useful" - 1792 Birch Cent --- "I personally think we developed language because of our deep need to complain." - Lily Tomlin
There are those who incorporate the buyers fee, no matter where they bid, as part of their overall bid, and you can count me among them.
BST transactions: dbldie55, jayPem, 78saen, UltraHighRelief, nibanny, liefgold, FallGuy, lkeigwin, mbogoman, Sandman70gt, keets, joeykoins, ianrussell (@GC), EagleEye, ThePennyLady, GRANDAM, Ilikecolor, Gluggo, okiedude, Voyageur, LJenkins11, fastfreddie, ms70, pursuitofliberty, ZoidMeister,Coin Finder, GotTheBug, edwardjulio, Coinnmore, Nickpatton, Namvet69,...
Also, in addition to shipping, etc. (noted above) there is a fee if paying by credit card. I usually estimate around 27% (give or take) above bid as closer to the actual cost when considering a maximum bid.
Even for the seller, it may not matter. Would you rather have 50% of $500 or 100% of $200? The venue can make a difference.
All comments reflect the opinion of the author, even when irrefutably accurate.