The consignor is getting 100% of the bid...and I'm paying 20% for his right to do so.

Do you want me to send you a dictionary so you can look up the word bid?

Let's see if one other person here agrees with you, Rob, shall we? Not that that would matter since you're the smartest guy on the board, obviously. :cool:

When I choose to bid on a card, pennant, whatever that any given auction house has up for bids, I make the choice to bid. It is up to me to read the rules---including what fees I may or may not have to pay if I win. If I object to a buyer's premium, I don't place any bids. If I choose to participate, I have a certain amount I am willing to spend. I don't care what percentage is going to a consignor, the auction house, or whomever...I am hoping that my amount is enough to win the card, pennant, or whatever.

Rob, what you said may be technically correct, however, when I bid in an auction, I consider my bids to include whatever BP, if any, applies; I assume most collectors would agree with me.

I agree with what you say...I'm sure many do that. But it's because you've been conditioned to do so. That says nothing about why it should be that way.

Tell you what...If one person here can direct me to an auction house that touts their "20% lower than market value winning bids", I'll never speak of the buyer's premium again.

A card (or pennant or slab with a pretty flip etc) with a market value of $1000 is up for auction.

Option 1) 0% buyer premium, 10% seller fee. Top bidder bids $1000. Top bidder pays $1k, auction house gets $100 and seller gets $900.

Option 2) 11.11% buyer premium, 0% seller fee. Top bidder bids $900. Top bidder pays $900 + [buyer premium of $900 x 11.11%] = $1k, auction house gets $100 and seller gets $900

Six in one, half dozen the other.

It's no use. Example after example is lost on this dude. He is honed in on the word BID, and his response will be that in your second example the BID was less and the buyer, not seller, had to "foot the bill" for the AH, whatever that means. I think we should all stop feeding this idiocy.

"I think we should all stop feeding this idiocy."

BINGO!

You left out an option.

Option 3) Card still sells for $1,000 and the buyer has to pay an extra $111.10 and the seller gets $1,000.

The notion that every winning bid has been deflated by the value of the BP is ludicrous.

This thread has become ludicrous. This, on the other hand, is Ludacris.
Carry on...

Rob, in your example (option 3), the buyer now pays $1,111.10 total, not $1000. All you did was add an extra $100 in bids to option 2. So why if a bidder has $1000 to spend (options 1 & 2) would they not factor in ANY additional charges (buyers premium/shipping/service charges/handling/etc) and why would they place that extra $100 bid? If your answer is cause they did not count on the additional fees, please explain how the auction house is responsible for the buyer not reading the terms and conditions prior to bidding.

I don't mean to speak for Rob (nor could I), but I think his whole argument is based on the premise that there are a lot of dumb dudes in the hobby who bid irrationally and erroneously because they don't understand rules/math; and ironically, the more I read his posts, the more I think this premise might be accurate.

I know there are a lot of stupid people out there, but what percentage of people do you really think dont take the buyer's premium into account when making a bid? Maybe they do it once, then realize when they get the bill. Unless guys are knocking back a few beers waiting for extended bidding to end, I dont see your example coming into play often.

Almost every card I couldn't sell here or privately, as well as those I didn't bother trying with, have gone to PWCC. Lower fees, high prices, and they run an auction every month. I dont understand why anyone wouldn't want to use them. Unless you're selling more obscure cards that will benefit from a write up and an auction catalog.

Exactly. It could not be any more straight-forward. I do not understand the confusion.

That's exactly right. The notion that everyone adheres to the X minus 20% bidding approach is comical. And the notion that bidding is suppressed by the value of the BP is even more comical. I spent 10 minutes comparing sale prices at Heritage to Ebay and on my first try Heritage was...I kid you not...20% higher for the same PSA 5 1953 Mantle card.

These defenders of the BP are living in an illusion.

OK, lets take your premise that the BP doesn't suppress the bidding and follow the logic. Why is that a bad thing for the auction house or the consignor? The auction house is in business to make money and the consignor wants to get as much as they can. Neither are responsible for the actions of a buyer. If the buyer overpays, both the consignor and auction house make more money. The buyer knows the rules before they place a bid and they choose to bid or not. The buyer is not forced to bid. If the buyer can get the same item cheaper on Ebay or wherever, then what is their motivation to bid in the auction? All the auction houses I've seen make the buyer's premium clear in the rules and usually include an example demonstrating how the fee works in connection with the bid. If some one is willing to voluntarily bid without reading the rules of the auction then that is their fault and no one else. It is not the consignor's or AH's job to protect people from themselves. Buyers need to be responsible for themselves.

Now Scott has very clearly outlined the history and reasons why the AH keep the seller's fee at 0%. So if it not the AH's job to stop people from bidding, and both the AH and consignor benefit from the masses of people who don't read the rules, how does changing to a 0% buyer's premium benefit the AH or the consignor?

In addition, I can't speak for others, but personally, I buy almost all the items I sell on Ebay from AH. How am I able to make money doing so if the AH with their 20% buyer's premium is more expensive and I'm also paying over 10% in Ebay fees when I sell the item?

..

The Magic 8 Ball Auction House
 

No buyer's premium
No consignment fees.

Attachment 317280

You forgot the 3rd one.

No auction house.


.

With regard to what I said below, I'd be surprised if anyone found empirical evidence that people wind up paying more (all else being held constant i.e. same item etc.) when the auction format includes a BP. That being said, I'm sure it happens - people can get carried away in the moment and as this thread stayed alive it did get me to thinking about another point:

I think the BP is kind of "phony". It seems more genuine to me that the AH should just get a percentage of the final bid. I don't care how simple the math is, why make people do it? I've been in the situation before placing a bid and the BP wasn't shown on the bidding screen, so I had to go search what it was elsewhere on the website before making the bid. It was kind of annoying. And why? Just so the AH can "frame" their model as not charging the seller? There is evidence out there framing i.e. describing 2 equivalent options in different ways can result in people choosing differently. I guess if one AH dropped the BP, other AHs could use it for marketing and say "we don't charge the seller, consign with us." It would be nonsense, but it would probably happen.

It's never been a consideration for me buying or selling, but I would see it as an improvement if the BP went away.

It's not a bad thing for the auction house or the consignor. It's a great thing for them. This discussion is about the BP being bad for the buyer and why the buyer should pay for a service being delivered for free to the consignor. And for some whether the buyer is really paying for that service at all (Spoiler Alert: They are).

Because there is room on "lots" in the AH format. Bidding on lots is naturally lower because of the nature of items that get put together into lots. You're not getting a T206 Wagner in a lot with other cards. So "Lots" are perfect for resale. I will agree that I have made some great purchases on lots of pennants even with the BP factored in. I typically can sell off the excess in the lot and get the one I really wanted in the lot for pretty close to free. I doubt you're buying a single PSA 5 1953 Topps Mantle (or any other single item) at an AH and flipping for a profit on eBay.

It's not a premise:

Most recent PSA 5 1953 Topps Mantle at Heritage:

https://sports.HA.com/itm/baseball/1...ype=share_btn_

Most recent PSA 5 1953 Topps Mantle at Ebay:


http://r.ebay.com/TqUFOY

http://r.ebay.com/3Cu8Ei

http://r.ebay.com/DHs7mR

http://r.ebay.com/CkXc3U

http://r.ebay.com/nKMPi6

http://r.ebay.com/r9bCu1

http://r.ebay.com/PZfZFd

Let me know how much money you would've made on this card.

It's all marketing, guys. No matter how many math examples we run, the fact is that consignors hate hearing about a commission. That's why a high BP is the norm: most AHs will waive the commission for a decent consignment. Just like shipping. REA (hi Brian) doing the free shipping is brilliant because shipping pisses off so many customers. It is a minuscule part of the overall invoice from the AH in most cases but it feels like dirt in your eye, especially when the AH charges for insurance to value and you just know that they have a blanket insurance policy that covers to a set limit regardless of value, so it is a profit center.

Scott B is definitely spot-on about other fields and what AHs charge there. We are lucky that we (consignors) can usually get a no commission deal. Try selling an entertainment item; you are nearly always going to pay 35%+ total because the AHs that deal in those materials do not waive their commissions unless the item is astounding.

As for BP splits, well, if you are offering a $100K card for consignment, you have leverage to get a piece of the BP. Nothing wrong with that.

I am not surprised people use PWCC for some nicer stuff. It gets the eBay customer base of eyeballs, the rate is substantially lower than most AHs charge, and cards to cash is fast as compared to other outlets. I don't know what others experience, but it is very frustrating when I consign an item in January, not see it hit the blocks for months and not get paid for another 30-60 days. Particularly if I have a use for the funds and can't wait half a year or more to get to paid.

Adam, great post - I found the same thing this morning when I did some research = "google searches" - the BP gives AHs the opportunity to split their take into two different accounting items.

Another interesting thing was I did find a couple studies that were a bit surprising - one implying a low BP, less than 5%, doesn't suppress bidder behavior and another that showed a 10% BP compared with no BP had a 9% impact i.e. bidders did not reduce their bids by the full BP, but interestingly they used this as evidence bidders will reduce bids when the BP is present because it was very close to a 1-1 reduction.

A study by Gerding, Rogers, Dash and Jennings at the University of Southampton (UK) titled “Sellers Competing for Buyers in Online Markets: Reserve Prices, Shill Bids, and Auction Fees” states, “Another popular type of auction fee is the buyer’s premium, which is paid by the winner of the auction and is a fraction of the closing price … note that a bidder with a given valuation will correct his/her bid … such that the bid plus the fee … is equal to the bidder’s valuation. Interestingly, since all buyers thus lower their bids, the seller ends up paying the fee even though the fee is originally charged to the buyers.”

the study obviously was written by a bunch of auction house cronies who are very angry

Yeah but thats not Webster's definition of a bid so it can't be true

just got a text from the troll. his shift under the bridge scaring weary travelers ends at 9. he will check in then.

Old man humor. I love it. I feel like I'm being trashed talked to by this guy.

<a href="http://imgbox.com/m3RJe47d" target="_blank"><img src="https://images2.imgbox.com/12/9d/m3RJe47d_o.jpg" alt="image host"/></a>

The University of Southhampton? What's the matter, couldn't find a study from Bangladesh? Don't get me wrong, who better to go to for insight on the bidding habits of Americans in the sports memorabilia market than the Brits...after all they were playing the game back when it was still known as BaseRock.

Amazing they know the thought process of "all bidders". Sounds like a thoughtful study.

The rants of a guy on a chatboard who is a minority of one doubtless are more persuasive.

"mom! the meat loaf! we want it now!"

Tired issue. . . I've posted on it a number of times myself and mostly been told I'm wrong. I think AHs love the BP because it does lead to higher bidding prices. In a perfect world all buyers would religiously include the vig in their bids. They don't. Just like why someone says a meal at a restaurant cost us $100, and not $120 including a tip. People aren't perfect decision making machines. Particularly with regard to a discretionary purchase like a collectible that they are passionate about. But most people here are perfectly rational and analytical in their bidding approach so I may be in the minority.

I've also had more than a few drinks at charity auctions and overbid for crap that I really don't need.

remind me to notify you of my next charity auction :)

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