Bidders Premium?

[3arod13]

Excuse my ignorance, but I've never bid on anything from an auction house. Why is there a Bidders Premium? I win an auction for $1,500 and have to pay and additional Bidders Premium of $200+? What for?

[danesei@yahoo.com]

Excuse my ignorance, but I've never bid on anything from an auction house. Why is there a Bidders Premium? I win an auction for $1,500 and have to pay and additional Bidders Premium of $200+? What for?

It allows the auction house to market its services as being paid for by the buyer, instead of the seller. It really doesn't make a difference, but it does seem to attract more consignments.

[emann]

Essentially, between the seller's premium and/or buyer's premium, this is how the auctioneers make their money.

eBay does a similar thing if you've ever sold thru there, they only charge the seller though, so if you're only buying you might not notice.

If you read the auction rules before bidding, it helps to do the math to figure out the premiums beforehand as they vary from house to house.

[jesusbestdeals97]

The bidders premium is there so that the auction house makes money, that is their form of making money, they auction off thousands to millions of items and they each have a buyer's premium..

[3arod13]

Sellers premium I understand. Buyers premium I don't! Thanks for taking time to respond!!

[danesei@yahoo.com]

Sellers premium I understand. Buyers premium I don't! Thanks for taking time to respond!!

Just think of it as a 35% seller's premium, of which, the buyer is responsible for 20%.

[yankees506]

Tony, I've always felt they charge a buyers premium so that they are able to attract more consignments. The Attraction there is that the seller gets exactly what the item sold for, and the action house makes their money off of the buyer. They figure if you wanted the item bad enough to bid on it you will pay the premium

[PwKw13]

Tony, I've always felt they charge a buyers premium so that they are able to attract more consignments. The Attraction there is that the seller gets exactly what the item sold for, and the action house makes their money off of the buyer.

Don't the auction houses normally charge a consignment fee to the seller so that they get less than the item sold for? I believe they actually make money off of both the buyer (buyer's premium) and seller (consignment fee).

[gorilla777]

Don't the auction houses normally charge a consignment fee to the seller so that they get less than the item sold for? I believe they actually make money off of both the buyer (buyer's premium) and seller (consignment fee).

Yes, most of the time there is a commission.
So I consign something with 10% commission, that you then end up winning at hammer price of $1k. I net out $900, you pay a total of $1,200 (usually buyer premium is 20%) and auction house take is $300.

[yankees506]

Yes, most of the time there is a commission.
So I consign something with 10% commission, that you then end up winning at hammer price of $1k. I net out $900, you pay a total of $1,200 (usually buyer premium is 20%) and auction house take is $300.

Wow, learn something new everyday!