Legendary Winnings

[Runscott]

Originally Posted by oldjudge

Scott-how are your Legendary winnings typically shipped? When you go into the FedEx or UPS web site, what does it come up with for shipping costs?

Peter-what did you buy and what were the shipping costs? You are obviously incensed at your treatment but you have provided no details as to what the issue actually is.

I don't remember, but I generally win a bit more when I bid with them, so the packages are justifiably larger than this one should be. I'll re-post here after it arrives.

[Exhibitman]

Jay, that is correct if the auction house is paying for insurance via the USPS. However, any business can purchase a policy that covers shipping on a blanket basis, not item by item, under any carrier that provides delivery proof [USPS, Fed Ex, UPS, etc.]. No well-run merchant would spend money per item when a blanket policy would provide the same coverage for a far lesser price, unless a decision has been made to externalize the costs. However, Fed Ex Ground's insurance [its Declared Value surcharge] is not the rate stated in the post in this thread--it changes every $100 [I just ran a cost analysis with Fed Ex on its web site to ship from LA to NYC on a 1# package at values from $100 to $1,000 and it doesn't match those figures]. What I suspect is really going on is one of two things:

(1) The auction house is externalizing the cost of the insurance by using a formula that doesn't represent actual costs of insurance actually purchased; or

(2) The auction house is externalizing a flat cost of a blanket insurance policy by utilizing a formula in its cost accounting.

Neither is per se "good" or "bad" in and of itself, but both are strategies designed to externalize a cost that may be non-existent or internal and unrelated to the rate charged. Now, whether that cost is real or not depends on the precise nature of the coverage that the auction house has. Normally, a policy that covers the consignments while in the hands of the auction house will either have a bulit-in shipping coverage or a rider that covers it for a separate flat fee.

[Jlighter]

I for one honestly believe this is a source of revenue for the auction house, unless someone has direct proof otherwise I'm still gonna believe it.

[oldjudge]

Adam-I'm sure they have blanket coverage and are just using the third party calculators to come up with a reasonable charge. Their actual cost should be less, after allocating some pro rata share of the policy cost, but when you add in the cost of running the shipping department, including materials and labor, I would guess that they are not getting rich on what they charge for the shipping. My guess is that they are just trying to break even on the whole shipping process. If they can achieve this then the roughly 20% buyers premium covers the cost of running the rest of the auction house and yields whatever profit there is. This profit must come out of the buyer's premium since very few consignors pay consignment fees(many auction houses offer negative consignment fees).

[Jlighter]

Originally Posted by oldjudge

Adam-I'm sure they have blanket coverage and are just using the third party calculators to come up with a reasonable charge. Their actual cost should be less, after allocating some pro rata share of the policy cost, but when you add in the cost of running the shipping department, including materials and labor, I would guess that they are not getting rich on what they charge for the shipping. My guess is that they are just trying to break even on the whole shipping process. If they can achieve this then the roughly 20% buyers premium covers the cost of running the rest of the auction house and yields whatever profit there is. This profit must come out of the buyer's premium since very few consignors pay consignment fees(many auction houses offer negative consignment fees).

I've never sold through Legendary, but according to their website they have a 15% consignment fee.

[Jlighter]

For comparison SCP charged me around $23 for a decent sized framed piece and one card. The total value was around 700. It was shipped UPS with Signatute including insurance.

[jimross]

I didn't bidded on this recent Legendary auction. I am worry I won't be able to receive my items after I paid in full due to their recent lawsuit results. Am I worrying too much?