Buyer's premium, auction houses and you

[BRoberts]

Who do you think is negatively impacted the most by the buyer's premium an auction house charges?

[Leon]

Number 3 and 4 can be true at the same time.

There are costs to doing business.

I read all of the rules going in.

How is anyone negatively impacted if they read the rules?

Lastly, I have never felt negatively impacted by playing in auctions. Maybe I am an optimist? Maybe I am missing something here?...
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[gunboat82]

Originally Posted by Leon

Number 3 and 4 can be true at the same time.

There are costs to doing business.

I read all of the rules going in.

How is anyone negatively impacted if they read the rules?

Lastly, I have never felt negatively impacted by playing in auctions. Maybe I am an optimist? Maybe I am missing something here?...
.

I think you might be defining "negatively impacted" to mean "taken advantage of," whereas I understand the question to be "who sacrifices the most value?"

I think most people go into auctions with their eyes open to the costs, so no one is really being swindled in that scenario.

I also think that, for most items, the consignors are the ones losing the most value because buyers factor the premiums into their bids. Maybe the convenience and reach of the auction house are worth it to the consignor, but I still think it's fair to say they're "negatively impacted" if the auction house is taking 22% off the top.

Obviously none of this applies to the high rollers who have one-of-a-kind items and relationships with the auction houses. But for the auctions where we see dozens of lower-grade Mantles, Cobbs, Mays, etc., I think the premium absolutely depresses the take-home for consignors, while not affecting me at all as a buyer (except that some auction houses make me do the math before I bid).

[Leon]

Thanks, Mike.
I was indeed looking at it in the wrong context.

Originally Posted by gunboat82

I think you might be defining "negatively impacted" to mean "taken advantage of," whereas I understand the question to be "who sacrifices the most value?"

I think most people go into auctions with their eyes open to the costs, so no one is really being swindled in that scenario.

I also think that, for most items, the consignors are the ones losing the most value because buyers factor the premiums into their bids. Maybe the convenience and reach of the auction house are worth it to the consignor, but I still think it's fair to say they're "negatively impacted" if the auction house is taking 22% off the top.

Obviously none of this applies to the high rollers who have one-of-a-kind items and relationships with the auction houses. But for the auctions where we see dozens of lower-grade Mantles, Cobbs, Mays, etc., I think the premium absolutely depresses the take-home for consignors, while not affecting me at all as a buyer (except that some auction houses make me do the math before I bid).

[Gorditadogg]

The seller pays the juice in the end. As a buyer, I am going to pay the same amount for T206 Cobb, whether I buy it on HA, Collectors Corner, or on here.

The other side is that the AH gets paid for bringing in eyes, and as a seller, that may be worth the juice.

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[bnorth]

For me it is always the consignor. The buyers premium is just a way of giving the consignor less of the REAL selling price.

[Schlesinj]

Originally Posted by bnorth

For me it is always the consignor. The buyers premium is just a way of giving the consignor less of the REAL selling price.

I view it that I am paying for the access to the market that the auction house can provide. With more eyes and buyers the more value I get for my card. I think certain auction houses have different niches to, so as a buyer I know where to go when I am a buyer and a seller.

[rats60]

It is both. I see two classes of items. The rarest and most popular stuff and that which is not.

With rare or expensive items, the consignor is going to ask for more of the premium and not be effected by the final price. Sellers are going to pay what it takes to win and when the premium is added, they will pay more. Collectors say they only pay X including the premium, but not all buyers are like that.

With things that are easy to find and have a known value, collectors will only pay so much, auction houses won't give the consignor any of the premium or just a small amount. In this case, the buyer gets less of the known value.

[BioCRN]

I'm not sure about the ultra-high end auction market (5+ figure stuff), but I can tell you for sure the handling of how auctions actually end balancing East Coast vs West Coast time zones is leaving some real money on the table from East Coast people bailing on the ones that can linger deep into the night...especially the "all lots open until auction ends" stuff.

I'm sure the action houses have done their internal math and can "actually..." a financial benefit, but I've talked to many fellow East Coasters who can't afford to win everything they're bidding on, but can't stick around until the middle of the night to see what's left in range...and they end up getting not much or not anything at all

As far as BP, it seems the plus/minus depends on how well you can negotiate with a given auction house and/or play ac's against each other for the biggest cut. That's a very dynamic thing even if most of what we see at auction don't have that kind of leverage for a huge cut in the negotiation...plus some cosigners may give up some of that possible cut for more publicity for their lot(s)...