<< <i>Buyers will just back off their bids further and consignors known this. Consignors will therefore push back and try to get some or all of that 2.5% via negotiation upfront. Not many consignors are actually giving up 25-27.5% total unless they are clueless about buyer's/seller's fees. Probably in the end it won't make all that much difference for most buyers and sellers. The clueless and unitiated will suffer the most and lose another 2.5%. For dealers that do offer a consignment service who typically drum up consignments for major auction houses, their businesses will get a boost (ie Mark Feld and others). And I could see 2 dealers who might have been doing $25K per auction team up to make it $50K. There will be a lot of combining of dealer consignments starting in June. Again, only the littlest people w/o connections will suffer.
The only true buyer's fees are when buyer's forget to do the math and back out their bids by the buyer's premium. In most cases buyer's "fees" only include the time, travel, and living expenses for buyers to attend the auction. And the auction houses don't get that....the airlines and city businesses do. The consignor pays for everything else.
When I consigned with Bowers and Merena back in the late 1980's a typical total fee was about 13-18%. Over the past decade or so one could easily get a net consignment fee of around 10-12%. So if anything consignment fees have been at a bargain rate for quite some time. Moving them up to 12-14% will still be competitive. And I'm sure if you negotiate a no reserve (or very tightly set reserves) with the auction house, you can probably improve your rate by 1-2%. Hmmm, better make sure I have Mark Feld's number handy. >>
So at what point does it make sense for a clueless consignor to team up with a dealer consignor?
<< <i><<I bid in a lot of auctions. On this continent and two others. Coin auctions, antique auctions, art auctions, and barn auctions. If I bid at Sotheby's or Christies, BP is 24% or 25%. In Europe, it's typically somewhere between 17.5% and 20%. Same with Asia>>
Same. Wine, sports cards and antiquities. 19.5% seems to be the sweet spot. Coins at 15% was always the "bargin".
MJ >>
Might coins be lower BP because there are more low roller coin buyers than there are art and antique buyers? In many coin auctions there are scads of low dollar widgets that the big boys won't even look at so if they expect the unwashed masses to buy their low tier coins, they have to make it attractive. Minimum BP too large bid increments already screw the buyers of lower dollar stuff.
<< <i>"5. Buyer’s Premiums. For U.S Coins and Currency Sales (auctioned by Stack’s Bowers Galleries), a Buyer's Premium of fifteen percent (15%) on each individual lot will be added to all purchases made by Bidders, except for reacquisitions by Consignors, regardless of affiliation with any group or organization, and will be based upon the total amount of the final bid."
The above "term and condition" is still on SB's website as of this morning.
<< <i>"It doesn't go into effect until the June auction."
Got it. I am digesting this all right now. May comment later
Wondercoin >>
From the Pistareen post.
<< <i>I did just confirm the validity of what was posted here, and apparently the deal is this: the move starts with the June sale (not the sale currently online) and only counts on invoices (not individual bids, but total gross invoices) of under $50,000. It is a move that affects collectors and small dealers the most (which sucks for myself and most people posting here). >>
They can charge whatever they want. I will pay $X for a particular coin. If someone is willing to pay more than that, it's his / her coin. Coins are a discretionary purchase. If I think they are too expensive, I'll just buy something else. In all my years of collecting, there's only one coin I've seen which "had my name on it."
"Vou invadir o Nordeste, "Seu cabra da peste, "Sou Mangueira......."
I've also seen some comparisons to the high BPs charged for other types of collectibes as a way to justify this increase and to try to convince us that 17.5% is still a good deal... I'm not buying it.
The work involved in cataloging coins would seem to be minimal compared to many other types of collectibles. Probably 95%+ of all coins sold in these auctions can be cataloged without doing any research whatsoever. For slabbed material it's super easy as the identification and grade is right there for you. All the auction house needs to do is snap a photo and maybe throw in a couple word or couple line description of the particular coin. Big deal.
For unslabbed material, it might be a little harder, but those are typically lower value items anyways where less of a description in the catalog is given or things are just thrown into group lots where minimal information is provided anyways. Moreover, some of the auction companies like Heritage and Teletrade seldom deal with the unslabbed coins. Also, photographing coins seems to be pretty standardized as most are around the same size and your camera/scanning equipment would rarely need to be moved around or adjusted as may be the case with other types of collectibles.
Jacking the price up by 2.5% on the collectors and small dealers only is just greedy.
<< <i>Good grief, is 15% BP not already enough??? >>
While the stated BP is currently 15%, some of that routinely gets negotiated out of the seller's fees. In the past couple of years it was not unusual for consignors with modest accumulations to work a deal for say 103-105% of hammer (90-92% net of final realized price or 104/115.)). In other words one could assume an equiv 0% BP and 10% consignor's fee....regardless of how the numbers may appear to be (ie 10% + 15%), that's how it works out. Or call it 10% BP and 0% seller's fee. Either way that 10% comes out of the seller's pocket. While stated seller's fees might start around 10% and buyer's fees are fixed at 15%, the auction house was netting basically 9-11% rather than a potential pie in the sky 21.7% (25/115). And then from that 9-11% expenses have to be taken out. It might be that the house ends up only making a net 4-6% on a $10 MILL auction (a guess). The only way to make money here is with volume and actual sales. Though no doubt they make some percentage on buy backs and other fees. I've wondered how they've made things work for so long with only a 10-12% net commission. It's probably the reason why ANR, Stacks, and B&M combined as they weren't making it on just 10% with the volume handled.
Basically the math here doesn't work so well. And a lot of that stems from misunderstanding about Buyer's Fees.
10% seller's fee + 15% BP = 10-12% net commission....(not 25% or even 21.7%), at least for the bulk of the consigned value. Maybe just eliminate all the sleight of hand mathematics and just charge the seller's the 10-15% along with a 0% buyer's fee.
<< <i>Good grief, is 15% BP not already enough??? >>
The question is whether Heritage will follow suit.
I saw the notice that came with the auction catalog today while viewing coins. It starts in June. I was told it also has something to do with the cost of the catalogs...
I don't think this is going to go over too well....
<< <i>If they're not making enough money on the seller fees, they need to re-work their deals with the sellers, not their deals with the buyers, non? >>
That's the beauty of this. It is actually a reworking of the deal with the seller. Buyer's fees are smoke and mirrors and it's up to the seller to negotiate away as much of the Buyer's premium as they can on their contract. You do this by agreeing to a % of hammer price. The starting point is 100% of hammer in most cases. How much or how little a seller digs into that buyer's fee is up to them. 100% of hammer is already the same as 87% of the final price realized (ie hammer + juice). It would be much simpler if the house renamed the buyer's fee as "seller's fee #2."
Nice, we are seeing the effects of less competition.
The arguments about higher costs are specious. When you get a percentage, then, in the long run, you get higher revenue keeping up with your higher costs. This is a profit grab in a less competitive market, and they are hoping Heritage will go along shortly thereafter.
<< <i>This is a profit grab in a less competitive market, and they are hoping Heritage will go along shortly thereafter. >>
What's wrong with a company attempting to increase its profits? How many people do you suppose there are who would be happy to hear the company they worked for instituted a policy goal of making less money?
<< <i>This is a profit grab in a less competitive market, and they are hoping Heritage will go along shortly thereafter. >>
What's wrong with a company attempting to increase its profits? How many people do you suppose there are who would be happy to hear the company they worked for instituted a policy goal of making less money? >>
Nothing is wrong, if there is competition. However, here we have a situation in which Stack's merged with Bowers, resulting in less competition. Now they are raising prices and hoping the others will follow, comparable to what the Airline oligopoly does. I hope the rest of the firms don't go along with it, but we will see.
<< <i>Nice, we are seeing the effects of less competition.
The arguments about higher costs are specious. When you get a percentage, then, in the long run, you get higher revenue keeping up with your higher costs. This is a profit grab in a less competitive market, and they are hoping Heritage will go along shortly thereafter. >>
Heritage already decreased CC limits for paying for purchases for buyers to increase their bottom line. I hope they don't follow suit here!
A merchant can't set different prices for credit card purchases, so by setting an invoice level at $50,000 they catch the credit credit users.
I know that used to be true, but I don't think it is any more. I've seen plenty of merchants, including colleges and government agencies (collecting taxes), add "convenience fees" for CC use.
<< <i>Sounds like they are trying to get the Credit Card fee back from smaller buyers who might be more likely to use a credit card instead of a check. A merchant can't set different prices for credit card purchases, so by setting an invoice level at $50,000 they catch the credit credit users. >>
If that is true then why not charge those use a credit card to pay more? I thought I saw that at the last Heritage pick-up. They were had an additional fee if you were paying with a credit card.
It's unfair to make everyone else pay because you want to use a credit card. If you use it, you should pay for it.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
Perhaps more sellers will move to teletrade. It does seem like more quality coins are being offered on teletrade lately. I just received teletrades latest offer with dealer seller's fees starting at 0% and depending on how much volumne offering part of the buyers fees. I do think they may be the fly in ebay and the major auction houses push for too much of the cut IMHO!
<< <i>A merchant can't set different prices for credit card purchases, so by setting an invoice level at $50,000 they catch the credit credit users.
I know that used to be true, but I don't think it is any more. I've seen planetyt of merchants, including colleges and government agencies (collecting taxes), add "convenience fees" for CC use. >>
Just look at the gas stations in my area. There is one charge if you use the "in house" credit card, and a higher one if you use the others.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
<< <i>Perhaps more sellers will move to teletrade. It does seem like more quality coins are being offered on teletrade lately. >>
I was wondering the same thing. I rarely buy anything from Teletrade, although I do follow their auctions regularly and their items do seem to be better as of late.
I got 107% from one auction company. This will probably raise the volume of cash offers from the big companies to head off the auction option at the pass. If you have old holder desirable coins there are a number of dealers who will give you Greyseet bid for those coins. Why waste time and money sending those coins to auction. If you want to get top dollar offers, possibly the large coin show is the way to go; usually a long way to travel, but it avoids the monkey business of shipping for offers.
Possibly auction companies could offer incentives for buyers who pay by ACH or check?
Comments
<< <i>Buyers will just back off their bids further and consignors known this. Consignors will therefore push back and try to get some or all of that 2.5% via negotiation upfront.
Not many consignors are actually giving up 25-27.5% total unless they are clueless about buyer's/seller's fees. Probably in the end it won't make all that much
difference for most buyers and sellers. The clueless and unitiated will suffer the most and lose another 2.5%. For dealers that do offer a consignment service who typically
drum up consignments for major auction houses, their businesses will get a boost (ie Mark Feld and others). And I could see 2 dealers who might have been doing $25K
per auction team up to make it $50K. There will be a lot of combining of dealer consignments starting in June. Again, only the littlest people w/o connections will suffer.
The only true buyer's fees are when buyer's forget to do the math and back out their bids by the buyer's premium. In most cases buyer's "fees" only include the time, travel,
and living expenses for buyers to attend the auction. And the auction houses don't get that....the airlines and city businesses do. The consignor pays for everything else.
When I consigned with Bowers and Merena back in the late 1980's a typical total fee was about 13-18%. Over the past decade or so one could easily get a net consignment fee
of around 10-12%. So if anything consignment fees have been at a bargain rate for quite some time. Moving them up to 12-14% will still be competitive. And I'm sure if you
negotiate a no reserve (or very tightly set reserves) with the auction house, you can probably improve your rate by 1-2%. Hmmm, better make sure I have Mark Feld's number
handy. >>
So at what point does it make sense for a clueless consignor to team up with a dealer consignor?
<< <i><<I bid in a lot of auctions. On this continent and two others. Coin auctions, antique auctions, art auctions, and barn auctions. If I bid at Sotheby's or Christies, BP is 24% or 25%. In Europe, it's typically somewhere between 17.5% and 20%. Same with Asia>>
Same. Wine, sports cards and antiquities. 19.5% seems to be the sweet spot. Coins at 15% was always the "bargin".
MJ >>
Might coins be lower BP because there are more low roller coin buyers than there are art and antique buyers? In many coin auctions there are scads of low dollar widgets that the big boys won't even look at so if they expect the unwashed masses to buy their low tier coins, they have to make it attractive. Minimum BP too large bid increments already screw the buyers of lower dollar stuff.
<< <i>"5. Buyer’s Premiums. For U.S Coins and Currency Sales (auctioned by Stack’s Bowers Galleries), a Buyer's Premium of fifteen percent (15%) on each individual lot will be added to all purchases made by Bidders, except for reacquisitions by Consignors, regardless of affiliation with any group or organization, and will be based upon the total amount of the final bid."
The above "term and condition" is still on SB's website as of this morning.
Wondercoin >>
It doesn't go into effect until the June auction.
Got it. I am digesting this all right now. May comment later
Wondercoin
<< <i>"It doesn't go into effect until the June auction."
Got it. I am digesting this all right now. May comment later
Wondercoin >>
From the Pistareen post.
<< <i>I did just confirm the validity of what was posted here, and apparently the deal is this: the move starts with the June sale (not the sale currently online) and only counts on invoices (not individual bids, but total gross invoices) of under $50,000. It is a move that affects collectors and small dealers the most (which sucks for myself and most people posting here). >>
Good grief, is 15% BP not already enough???
"Seu cabra da peste,
"Sou Mangueira......."
"Keep your malarkey filter in good operating order" -Walter Breen
The work involved in cataloging coins would seem to be minimal compared to many other types of collectibles. Probably 95%+ of all coins sold in these auctions can be cataloged without doing any research whatsoever. For slabbed material it's super easy as the identification and grade is right there for you. All the auction house needs to do is snap a photo and maybe throw in a couple word or couple line description of the particular coin. Big deal.
For unslabbed material, it might be a little harder, but those are typically lower value items anyways where less of a description in the catalog is given or things are just thrown into group lots where minimal information is provided anyways. Moreover, some of the auction companies like Heritage and Teletrade seldom deal with the unslabbed coins. Also, photographing coins seems to be pretty standardized as most are around the same size and your camera/scanning equipment would rarely need to be moved around or adjusted as may be the case with other types of collectibles.
Jacking the price up by 2.5% on the collectors and small dealers only is just greedy.
Michael Kittle Rare Coins --- 1908-S Indian Head Cent Grading Set --- No. 1 1909 Mint Set --- Kittlecoins on Facebook --- Long Beach Table 700
<< <i>Good grief, is 15% BP not already enough??? >>
While the stated BP is currently 15%, some of that routinely gets negotiated out of the seller's fees. In the past couple of years it was not unusual for consignors with modest
accumulations to work a deal for say 103-105% of hammer (90-92% net of final realized price or 104/115.)). In other words one could assume an equiv 0% BP and 10% consignor's
fee....regardless of how the numbers may appear to be (ie 10% + 15%), that's how it works out. Or call it 10% BP and 0% seller's fee. Either way that 10% comes out of the seller's
pocket. While stated seller's fees might start around 10% and buyer's fees are fixed at 15%, the auction house was netting basically 9-11% rather than a potential pie in the sky 21.7%
(25/115). And then from that 9-11% expenses have to be taken out. It might be that the house ends up only making a net 4-6% on a $10 MILL auction (a guess). The only way to
make money here is with volume and actual sales. Though no doubt they make some percentage on buy backs and other fees. I've wondered how they've made things work for so
long with only a 10-12% net commission. It's probably the reason why ANR, Stacks, and B&M combined as they weren't making it on just 10% with the volume handled.
Basically the math here doesn't work so well. And a lot of that stems from misunderstanding about Buyer's Fees.
10% seller's fee + 15% BP = 10-12% net commission....(not 25% or even 21.7%), at least for the bulk of the consigned value.
Maybe just eliminate all the sleight of hand mathematics and just charge the seller's the 10-15% along with a 0% buyer's fee.
<< <i>Good grief, is 15% BP not already enough??? >>
The question is whether Heritage will follow suit.
I saw the notice that came with the auction catalog today while viewing coins. It starts in June. I was told it also has something to do with the cost of the catalogs...
I don't think this is going to go over too well....
jom
There are some would be sellers who will hold the coins over fear of decreased net prices.
They would be better of not sending print catalogs and driving people to internet catalogs. They can send catalogs on request only and save that way.
Buying top quality Seated Dimes in Gem BU and Proof.
Buying great coins - monster eye appeal only.
<< <i>If they're not making enough money on the seller fees, they need to re-work their deals with the sellers, not their deals with the buyers, non? >>
That's the beauty of this. It is actually a reworking of the deal with the seller. Buyer's fees are smoke and mirrors and it's up to the seller to negotiate away as much
of the Buyer's premium as they can on their contract. You do this by agreeing to a % of hammer price. The starting point is 100% of hammer in most cases. How much
or how little a seller digs into that buyer's fee is up to them. 100% of hammer is already the same as 87% of the final price realized (ie hammer + juice). It would be
much simpler if the house renamed the buyer's fee as "seller's fee #2."
The arguments about higher costs are specious. When you get a percentage, then, in the long run, you get higher revenue keeping up with your higher costs. This is a profit grab in a less competitive market, and they are hoping Heritage will go along shortly thereafter.
<< <i>This is a profit grab in a less competitive market, and they are hoping Heritage will go along shortly thereafter. >>
What's wrong with a company attempting to increase its profits? How many people do you suppose there are who would be happy to hear the company they worked for instituted a policy goal of making less money?
<< <i>
<< <i>This is a profit grab in a less competitive market, and they are hoping Heritage will go along shortly thereafter. >>
What's wrong with a company attempting to increase its profits? How many people do you suppose there are who would be happy to hear the company they worked for instituted a policy goal of making less money? >>
Nothing is wrong, if there is competition. However, here we have a situation in which Stack's merged with Bowers, resulting in less competition. Now they are raising prices and hoping the others will follow, comparable to what the Airline oligopoly does. I hope the rest of the firms don't go along with it, but we will see.
<< <i>Nice, we are seeing the effects of less competition.
The arguments about higher costs are specious. When you get a percentage, then, in the long run, you get higher revenue keeping up with your higher costs. This is a profit grab in a less competitive market, and they are hoping Heritage will go along shortly thereafter. >>
Heritage already decreased CC limits for paying for purchases for buyers to increase their bottom line. I hope they don't follow suit here!
I know that used to be true, but I don't think it is any more. I've seen plenty of merchants, including colleges and government agencies (collecting taxes), add "convenience fees" for CC use.
<< <i>Sounds like they are trying to get the Credit Card fee back from smaller buyers who might be more likely to use a credit card instead of a check. A merchant can't set different prices for credit card purchases, so by setting an invoice level at $50,000 they catch the credit credit users. >>
If that is true then why not charge those use a credit card to pay more? I thought I saw that at the last Heritage pick-up. They were had an additional fee if you were paying with a credit card.
It's unfair to make everyone else pay because you want to use a credit card. If you use it, you should pay for it.
<< <i>A merchant can't set different prices for credit card purchases, so by setting an invoice level at $50,000 they catch the credit credit users.
I know that used to be true, but I don't think it is any more. I've seen planetyt of merchants, including colleges and government agencies (collecting taxes), add "convenience fees" for CC use. >>
Just look at the gas stations in my area. There is one charge if you use the "in house" credit card, and a higher one if you use the others.
<< <i>Perhaps more sellers will move to teletrade. It does seem like more quality coins are being offered on teletrade lately. >>
I was wondering the same thing. I rarely buy anything from Teletrade, although I do follow their auctions regularly and their items do seem to be better as of late.
Possibly auction companies could offer incentives for buyers who pay by ACH or check?