Goldin auction record breaking prices

[seanbaseball]

Interesting dialog...Why go with eBay vs an auction house? Also, Goldin started their auction house with a 10% buyers premium..10 PERCENT!!! And, it has walked up to the top range at 22.5%...at the end of the day, the bottom line price of the buyer can be sliced and diced...all depends on how much of the total the auction house(or any other platform) gets...

I go with ebay for cheaper smaller items that arent worth sending in for me or for Goldin to have to photograph and do a write up on. Makes sense for me and them. I have about 30 items in Goldins next regular auction so I use them quite a bit, exclusively for better items actually.
Premium is really 20% if you pay on time and with check or wire i believe. No doubt the auction house makes more off 20% than 10%, but it seems all the big houses are at 20%. Guess it has become a norm. Of course id like all expenses for buyer and seller to be lower, just like id like my health insurance to go up less than 15% per year! Im sure the auction houses have expenses that go up every year that they wish were lower. Printing alone for these catalogs has to cost a fortune. In the end I guess people use the houses when they believe the cost is worth it for what they get back. To each their own.

[KGoldin]

Interesting dialog...Why go with eBay vs an auction house? Also, Goldin started their auction house with a 10% buyers premium..10 PERCENT!!! And, it has walked up to the top range at 22.5%...at the end of the day, the bottom line price of the buyer can be sliced and diced...all depends on how much of the total the auction house(or any other platform) gets...

its 20%
22.5% is only with credit card fee

[Preece1]

Hi Folks,

I am new here, but have always been a fan of fame used jerseys. But I am a rookie. Why did the Namath jersey go so low in the last Goldin auction?

Best, Patrick

[LarryWalkerFan]

its 20%
22.5% is only with credit card fee

Ken, is the fee also waived on Debit card transactions?

[LarryWalkerFan]

It's not as simple as you make it out to be.

First off, the consignment fees are different for different items, I believe. If you have, for example, Babe Ruth's 714th or 60th HR from 1927, your consignment fee might even be negative.

So, let's say we take your example of 10 jerseys with a hammer of $1k ea.

$10k total hammer
15% consignment fee (which includes $50 jersey authentication fee per item)
Net: $8,500

You're then asking for $1,500 in credit applicable to the current auction, in return for a guarantee that you will spend your entire $8,500 in the current auction plus the $1,500 "coupon."

Scenario 1:

You win $10k in items.
Consigned share: -$8,500
Consignor credit: -$1,500
Buyer Premium: +$2,000
Net owed to Goldin: $2,000
Net loss by Goldin: $500 in authentication fees that were encumbered in the consignment

Scenario 2:

You win $7,500 in items.
Consigned share: -$8,500
Consignor credit: $0 (void if not used in current auction, per hypothetical proposed consignment agreement)
Buyer Premium: +$1,500
Net owed to Goldin: $1,500
Credit applicable to future Goldin Auction hammer prices: $1,000

In scenario 1, Goldin loses $1,000 in revenue and absorbs the $500 in authentication fees in return for $500 increase in hammer prices on the items you bid on over the underbidder.

The $500 difference amounts to $75 in consignor fees (at 15%) and $100 in buyer's premium.

Net loss to Goldin: $1,325.

In scenario 2, Goldin receives the $1,500 in consignor fees they would have received anyway (by you forfeiting them), and they're allowed to hold on to your excess $1,000 until you win in a future auction. Since, you said you like money, let's assume you spend that $1,000 in the very next auction.

The $50 difference between you and the underbidder amounts to $7.50 (again, at 15%) in consignor fees and $10 in buyer's premium. The time value aspect of the $1,000 works out to $2.12 of interest over three months at 0.85%.

Net gain to Goldin: $19.62.

Essentially, that's the proposition you're making.

As for your alternative solution of keeping your 10 jerseys in the closet, that's fine as well. Now, your jerseys' value will need to keep pace with inflation in aggregate, since the consignment fees aren't likely to go down any time soon. Then, when you pass those jerseys on to your wife or kids, they'll likely get offers at 65-cents on the dollar (assuming they aren't outright scammed or throw them away) or maybe half that in a fire sale.

So, by refusing to surrender $1,500 in consignment fees, your estate loses $3,500-$7k 20 years from now instead of $1,500 today.

It's a pretty simple concept...

I am not willing to consign my items at a fee of 20%, so I keep my 10 jerseys in my closet.

or...

Ken waives the consignment fee for my items and I send 10 jerseys into the auction, let's say at value of $1,000 per jersey. The 10 jerseys hammer for $10,000 and Ken collects 20% in buyer's premiums and I in turn have $10,000 in auction credit to spend.

Last time I checked, $2,000 is greater than $0, and I haven't even analyzed the additional buyers premium revenue because I have agreed to spend my $10,000 in the current/future auction.

What is so difficult to understand?