Does the REA auction pick up towards the end?

[Hordfest]

Originally Posted by BRoberts

Am eager to hear your thoughts on buyer's premium.

Buyer's premium?

[darwinbulldog]

Originally Posted by Hordfest

Buyer's premium?

Auction houses tack on a buyer's premium (typically 20%) to the winning bid, so if the winning bid is $1,000 that's akin to placing a winning bid of $1,200 on eBay when you get the bill. Definitely something to be aware of before you place any serious bids with an auction house.

[brianp-beme]

Originally Posted by darwinbulldog

Auction houses tack on a buyer's premium (typically 20%) to the winning bid, so if the winning bid is $1,000 that's akin to placing a winning bid of $1,200 on eBay when you get the bill. Definitely something to be aware of before you place any serious bids with an auction house.

And don't forget to check beforehand if the winning bid will also be assessed state sales tax...it varies from auction house to auction house, and also can depend on what state you live in.

Brian

[Hordfest]

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

[Snapolit1]

Originally Posted by Hordfest

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

Do you think that they pocket the sales tax?

Breaking news: taxes collected are remitted to the state taxing authorities

[Hordfest]

Originally Posted by Snapolit1

Do you think that they pocket the sales tax?

Okay well that part is true of course lol. Not their fault about sales tax I suppose. I may have gotten a bit carried away in my surprise about 20% buyers premiums haha.

[Exhibitman]

Some pointers for the auction newbs:

1. As a consignor, if you have decent stuff most any AH will sell it for 0% commission--the Buyers Premium (aka the BP or the vig) is where they make their money, typically 20% of the hammer price. If you have a consignment and the AH demands a commission, take it to another AH. If your consignment is really valuable, most AH's will also give you a piece of the BP. Selling your Wagner, ask for 110%-115% of the hammer price and you will get it. 1988 Donruss set, not.

2. Read the rules for each auction.

3. Read the rules for each auction.

4. Some AH's have switched to flat rate shipping charges. REA and LOTG both do that for run of the mill card lots.

5. Read the rules for each auction.

6. Closing methods vary. The goal is to maximize the amounts bid on each lot: happy consignors = repeat consignors. There are various ways to handle it. Here are excerpts from REA and LOTG's rules:

LOTG: This auction closes using the "Double Overtime" method, with a 15-minute rule for the entire auction. In order to bid on an item during the extended bidding session beginning on the date of the auction close, you must place at least one bid on that item prior to 9:00 PM Eastern on the auction closing date. If you do not bid on it by 9PM Eastern on the closing date, you cannot bid on it afterward. To ensure that everyone gets a chance to bid, we will apply the 15-minute rule to the entire auction beginning at 9PM, with the clock resetting every 15 minutes. Bidding continues until no bids have been placed in the entire auction for a full 15-minute interval. As long as there is at least one lot that receives a bid during a 15-minute interval, the entire auction will extend for 15 minutes. Once a 15-minute interval passes without a bid on any item in the auction, the auction will close. At 1:00 AM Eastern, any item that has not received a bid for one hour or more will close without notice. The remaining items will enter "Double Overtime," with the 15-minute rule applied to the remaining lots.

REA: REA will continue to accept bids from qualified bidders after 9:00 PM EDT on all lots in the auction. IF YOU HAVE NOT BID ON AN ITEM BEFORE 9:00 PM EDT, YOU CANNOT BID ON IT AFTER 9:00 PM EDT. If, after 9:00 PM EDT, a period of 10 minutes passes without a bid on ANY lot in the entire auction, then the auction will close. Based on past auctions, this is unlikely, so if the auction continues to 12:00 AM Midnight EDT (technically the morning of Monday, April 25, 2022), each lot will switch to a 10-minute lot-by-lot closing. During this lot-by-lot closing, an individual 10-minute clock will appear on each lot page. A bid on a specific lot will cause the countdown clock to reset. If the countdown clock reaches zero, the lot will close.

7. Read the rules for each auction.

[BRoberts]

Originally Posted by Hordfest

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

Troll.

[Leon]

Originally Posted by BRoberts

Troll.

I will find out. No one picked up and I didn't leave a message. Calls are easy...
My guess, and this is only a guess, he is young.

.

[Casey2296]

Originally Posted by Leon

I will find out. No one picked up and I didn't leave a message. Calls are easy...
My guess, and this is only a guess, he is young.

.

I get that sense too, the AH process can be quite eye opening the first time you dip your toe in the water.

[Hordfest]

Originally Posted by Leon

I will find out. No one picked up and I didn't leave a message. Calls are easy...
My guess, and this is only a guess, he is young.

.

I am not a troll. I am relatively young though. 32 and new to vintage baseball only because I inherited some 1930s Goudeys. I am learning as much as I can and you all have been very helpful. 3 of the cards I own are up for auction at REA in similar condition to mine so that's why I'm so curious about the process in case I should want to sell mine.

That being said, some auction houses do charge hefty fees, and there is a lot of tangible evidence of various auction houses and grading companies (See Heritage and WADA), working together to create speculative bubbles in collectibles. Just do some research about sealed, graded video games. There's a good documentary on YouTube about it.

Leon and I texted. All is well! Sorry if i came across as childish gentlemen.

[jcmtiger]

Originally Posted by Hordfest

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

Consignors (sellers can negotiate the consignment fee, depending on what your consigning, sometimes zero or anything less than the 25%.

[Aquarian Sports Cards]

Originally Posted by Hordfest

Wait...so auction houses charge the sellers a 25% consignment fee AND buyers a 20% fee? And then possibly sales tax on top?!! What a freaking racket. These auction houses are just wringing collectors dry and getting rich in the process.

How do they stay in business?!

First, the vast majority of businesses in the world make more than a 45% gross margin. 2nd, very few, if any, auction companies make a 45% gross margin. I can tell you ours is significantly lower than that number. Gross margin, if you are not aware, is NOT profit mind you it's merely the difference between what we take in and what we send to consignors. so out of that number we have to pay for the online platform or software, all of our employees, advertising, lease on our offices and warehouse, show fees and on and on.

If you are new to the board dig around a little you'll see plenty of stories of auctions that went bust, often after they actually stole from consignors. Why did they steal? likely because, like you, they thought running an auction was an easy path to instant riches. When they found out they were wrong and they couldn't pay the bills, they victimized their consignors.

[Hordfest]

Clearly my opinion is in the minority here. Maybe I'll change my mind as I get deeper into the hobby. For now, let's just say I'm a skeptic.

[Carter08]

Originally Posted by Hordfest

Clearly my opinion is in the minority here. Maybe I'll change my mind as I get deeper into the hobby. For now, let's just say I'm a skeptic.

Being a new collector myself, I can tell you from my personal perspective over the last few years that coming up with a deal outside of an auction house can and often does work out well. But auction houses for the most part ensure you a wide audience and tend to get top dollar. Although there’s a small chance you could consign what ends up being a steal for a bidder there’s just as much of a chance that you consign an item that ends up with an insane bidding war at the end and the item goes for more than you thought it would. Good luck with everything.

[darwinbulldog]

Originally Posted by brianp-beme

And don't forget to check beforehand if the winning bid will also be assessed state sales tax...it varies from auction house to auction house, and also can depend on what state you live in.

Brian

I thought that was the same with eBay. Do they charge sales tax for everyone?

[brianp-beme]

Originally Posted by darwinbulldog

I thought that was the same with eBay. Do they charge sales tax for everyone?

I believe Ebay switched over to tacking on sales tax to all buyers, no matter what the state, a couple of years ago.

I could be wrong about if it was implemented uniformly, or if buyers from some states still did not have sales tax added to their purchases.

Brian

[Leon]

Originally Posted by Hordfest

Buyer's premium?

I suggest reading the auction rules, terms and conditions before you bid. If you don't know what a buyer's premium is, if you win a lot in an auction, you will find out LOL
.

.

[HexsHeroes]

.

. . . and lets not forget about the impact and fun that "shipping and handling" charges bring to the buyer's total cost

[JustinD]

Originally Posted by Hordfest

Buyer's premium?

I read that and was waiting for you to go full GPK -

[jcmtiger]

Originally Posted by Hordfest

Buyer's premium?

Make sure you read all the rules of the auction. They all add a buyers premium.

[insidethewrapper]

Definitely the West Coast has the advantage because of when the auction ends. I like individual lots closing if no bids on them for 10-15 minutes after 9pm. This gives everyone a chance at a reasonable hour. Why keep all the lots open until 4-5 am. ?

[JeremyW]

Hordfest/Brandon shouldn't have to pay any seller's premium.

[Snapolit1]

Originally Posted by insidethewrapper

Definitely the West Coast has the advantage because of when the auction ends. I like individual lots closing if no bids on them for 10-15 minutes after 9pm. This gives everyone a chance at a reasonable hour. Why keep all the lots open until 4-5 am. ?

I'm fine with modified closing a number of AH have adopted where lots can close after midnight or 1 if there has been no bid in the last hour.

I think that's fair to consignors and bidders.

[molenick]

I understand the confusion when first encountering the AH pricing models. They are providing a service by marketing, collecting payment, and shipping your consignment. In some cases, they will also submit your cards to a grading service. Some AHs will give you a partial advance (say 25% of the estimated value) on your consignment and you can also use your consignment to offset purchases in the same auction. In exchange for these services, they charge a buyer's premium (non-negotiable) and consignment fees (usually negotiable). It’s pretty much the standard business model for auction houses all over the world.

You have to judge whether you think you could net the same amount by selling the cards yourself (also factoring in the time and effort spent in doing so). If you choose not to use their services, there are other options without fees, like the B/S/T section on this board.

My understanding is that an AH charges taxes as per applicable state laws. No one asks Home Depot why they are charging sales tax on the microwave you just brought. Taxes are certainly a big issue...I live in New York, so I know…but it’s not specific to baseball cards.

As for the buyer’s premium, I am not clear what the issue is. If you know ahead of time you will be paying 20% more than you are bidding (it’s always in the rules), you take this into account when you bid. If you are willing to pay up to $1200 for an item, you bid up to $1000. I understand the psychology of it and the sticker shock when you get the invoice. But it’s not a hidden fee that they spring on you without advance notice. In some cases (Heritage, for example) an AH will show the current bid with and without the BP.

As for REA, I have some lots consigned as well. Some have spirited bidding, some only one or two bids. I am hoping the slower ones pick up, but I think this is a function of the cards themselves not REA. The cards are accurately described and scanned. I doubt the final results will be different from any other major AH.

[Edited to add: That was not a knock on REA. I use them because of familiarity, and because I like their knowledge, customer service, and ability to reach collectors. But my cards are what they are (not headline stuff) and I assume they would get more-or-less the same prices elsewhere.]