Buyers premium question

[mechanicalman]

Originally Posted by Peter_Spaeth

The burden is only on the consignor though, not the buyer. Assuming rational buyers and that buyers' premiums depress hammer price, it's irrelevant to the buyer who just factors it into his total price, and the effect is on the consignor who realizes a lower price.

I think you missed my point, which implies that I didn't make it clearly enough. Please allow me to clarify. Of course, it's the seller who pays for both sides of the selling fees, but I believe an AH splits the margin into seller's commission and buyer's premium to create the PERCEPTION of a lower burden on the selling side. If you went to Memory Lane with a $5k card, and they told you it would be a flat 35% sellers fee, most people would balk at that. But for some reason, a 15% free + a 20% BP seems more palatable to most, for reasons I don't understand.

[Snapolit1]

In a perfect market buyers premium is completely irrelevant. Of course I agree. But when I took Economics 101 decades ago I didn't think anyone assumed perfect behavior. It's why car dealerships sell new Camrys for $23,000 with $1000 back, and only after you dig the financing statement out of the load of paper they gave you is it clear that you are paying over $40,000 for your new $23,000 car. And there were also 14 charges that you need to add in. We see the information we want to see sometimes. I made $800 day trading a stock yesterday. Well, no, you actually made less than $400 when taxes and brokers fee is counted. Again, while the info is all there to see, sometimes we focus on what we want to see.

[tschock]

Something else that is just 'interesting', to me anyway. The seller's premium is the only unknown amount at the time the agreement to sell is made. When the agreement to buy is made, all costs are calculable at the time of the agreement (winning bid), barring undisclosed shipping costs, that is. Whether one calculates that amount is another thing.

[Peter_Spaeth]

Originally Posted by mechanicalman

I think you missed my point, which implies that I didn't make it clearly enough. Please allow me to clarify. Of course, it's the seller who pays for both sides of the selling fees, but I believe an AH splits the margin into seller's commission and buyer's premium to create the PERCEPTION of a lower burden on the selling side. If you went to Memory Lane with a $5k card, and they told you it would be a flat 35% sellers fee, most people would balk at that. But for some reason, a 15% free + a 20% BP seems more palatable to most, for reasons I don't understand.

Which AHs in your experience actually charge a seller's fee?

[mechanicalman]

Originally Posted by Peter_Spaeth

Which AHs in your experience actually charge a seller's fee?

Feels like I'm being cross-examined. I had a conversation with Memory Lane, and they start at a 15% seller's commission. They offered to waive that with a total consignment over $25K. When I pushed back on the fee being on top of the BP, I was told that "all the major players pretty much operate the same way." I later had a conversation with REA and I was told they start with a seller's commission as well, but again, it's flexible based on consignment value. Let me know if you need more examples. Though I'm sure others have more experience than I do. I haven't pursued this channel much after my initial learning.

[Peter_Spaeth]

It's hard for me to believe as a practical matter that anyone ends up charging it, given how many alternatives there are for a consignor these days.

[mechanicalman]

Originally Posted by Peter_Spaeth

It's hard for me to believe as a practical matter that anyone ends up charging it, given how many alternatives there are for a consignor these days.

I agree with you that it's hard to believe as there are certainly more affordable options out there; I'm just stating what I've been told.

That said, the key dudes at the major catalog AHs read these posts, so if I'm wrong, and you guys never charge a seller's commission, then please correct me and affirm Peter's disbelief.

[Aquarian Sports Cards]

Um, Peter, who do you know who DOESN'T charge a seller's commission? Except on top dollar items everyone I am aware of (and that's most of the major houses) absolutely does charge.

[Griffins]

Originally Posted by Aquarian Sports Cards

Um, Peter, who do you know who DOESN'T charge a seller's commission? Except on top dollar items everyone I am aware of (and that's most of the major houses) absolutely does charge.

I've never been charged by Goodwin, LOTG, Mile High, Legendary, or Sterling. Mine were certainly not top dollar items.
Somewhere I compiled a chart of all the auction houses with bp, sp, closing methods, etc.