Buyers Premiums - What's Your Thoughts?
Thursday June 25, 2009
| Okay, I'm a little perturbed right now. I was about to put a post up about an upcoming auction when I saw the buyers premium was 28% for Internet bidders. Yikes! We all know what a buyers premium is -- it's paying the auction house for the privilege of allowing us to bid on their auctions. A way of getting a little more money that doesn't go to the seller, but instead to the auction house. Yes, I know there are lots of costs to running an auction, but I also know the sellers pay a lot of those costs. I also realize the cost of putting it on the Internet is more than just hosting it locally, but Internet publicized auctions also gather more would-be buyers, folks who might not bid otherwise. What's your threshold of pain when it comes to buyers premiums? I know at 28% I won't even look at the auction. Auctioneers? Feel free to add your comments!
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A difference between internet buyers and other buyers just strikes me as unethical, so I wouldn’t bid at all. Overall, I can’t see paying more than a 10% buyer’s premium, and only then on something I really want.
I don’t mind charges as long as they are transparent. I can then decide whether this is an auction that I want to participate in, either as a buyer or as a seller. I understand that auction houses are a business and I don’t have a problem with them making charges to cover costs – however I do have a problem at getting ripped off and I would certainly bulk at high buyer fees, particularly if there are high seller fees too! I would love to know the auction house’s rationale behind a 28% premium.
Having previewed the auction items at Planet Hollywood in Vegas, it’s not hard to understand why the buyer’s premium was high. It was an expertly curated exhibit of museum caliber. There were two attendants from the auction house there to answer questions, and two armed guards on duty as well. You have to pay for all that high-end presentation and those salaries. It was exciting to see the items and then bid on some of them through the Internet, and I won a couple. I just factored in the buyer’s premium into what I was willing to pay and called it a day.
Pam,
Appreciate your comments. Julien’s auctions puts on excellent auctions and as you say there are costs to do all that. When I bid online on auctions with Buyers Premiums, I also factor in the BP when doing the bidding.
What bothers me most is the higher percentage for Internet bidders. Perhaps it costs them a bit more to process our winning bids, BUT we also help drive up the prices and they would not be what they are if Internet Bidders were excluded or not an option. So they already are making a little more just because we (internet buyers) provide more eyes and willing checkbooks.
Barb,
I understand your concern. I sort of looked at it like a convenience tax. It would have cost me a lot more to go back to Vegas for the auction the next weekend than paying the extra 3% on the two lots I won. In instances where you’re spending big bucks, that’s not the case. I guess this is just an instance where it was worth it to me to pay the extra 3%, but for you, not so much. I don’t always feel like that about buyer’s premiums, believe me!
Pam
I understand charging a bit more because it does cost a bit more to provide online bidding. But, in my opinion, anything over 15%is gouging.
But what irritates me even more is when I hear the auctioneer begging inhouse bidders to overtake my bid because he/she doesn’t want to have to package and ship the item. This has happened to me twice, and the second an in-house bidder overtook my bid, the gavel dropped and I was not given a chance to place another bid.
More and more it seems the auction houses are using online systems to get opening bids and to drive the bidding during the live auction. Not all of them, as I have witnessed a number of auctioneers slow down to allow online bids to come in.
I’ll still bid online at live auctions but only with a house that doesn’t charge an excessive buyer’s premium and doesn’t send their items to a professional packaging company for shipment.