New Online Auction - Private Collection

[trekrok]

Yes, I understand that auction services are a business trying to make money yet no one has explained this “buyer’s premium”. Still makes no sense to me.

Example:
I purchased a used gun from Cabela’s a few years ago. I paid the asking price shown on the gun along with tax - no buyer’s premium.
Did Cabela’s make money on this sale? You bet they did. I imagine the original owner of the gun got paid less than 70% of what Cabela’s sold the gun to me for.
Same thing with several farm actions I have gone to and made purchases at. Again, I paid for the items I purchased at the price the item was sold to me at the auction. Taxes were added to that price (taxes aren’t added if you have a farm tax number).

Back to the auction in this discussion. It just seems like “double dipping” to me.
Auction house charges a commission to the seller and then another fee on the buyer.

Questions:
1) When do “buyer’s premiums” come into affect? Is this a random thing or is there a set of rules out there somewhere defining just when to add? Like I mentioned in a previous post, I’ve made purchases through Ebay, Gunbroker, farm actions, and estate auctions - never paid a buyer’s premium.
2) Are you taxed on the buyer’s premium itself? If I pay $100 for the item w/ a 15% BP, am I taxed on $100 or $115.
3) Should we all start adding a “buyer’s premium” to any guns we have listed here on OSA?
…question 3 -

Well, think of it from the auctioneer perspective trying to get an estate to contract with them to sell the collection. Would you rather say to the estate, you pay a 10% commission or, you pay a 25% commission? 10% commission probably let's them get more auctions.

I'll bet there's some psychology involved in the buyers premium too.

 

[Ahall]

Auctions are an interesting psychology - you go looking for a deal and walk away paying more than anyone else would.

Gavel price Final bid
Buyer's premium Percentage of gavel price paid by the buyer to the auctioneer for their services.
Sales tax Percentage of gavel price and buyer premium paid to Uncle Sam
Credit card fee Percentage of gavel price, buyer's premium, and sales tax.

Your cost Gavel price * Buyers Premium * Sales tax * Credit card fee + Shipping + transfer from your dealer.

It's not hard for the fees to add up to 1/4 to 1/3 of the gavel price or more.

Don't get to hung up on how the money gets divided up after it leaves your hands.
Thats someone else's problem.

Do the math and know where your gavel price needs to be if you're going to buy an item for what it's worth to you.


Do your homework.
Read the terms and conditions for the auction.
Know what is in the lot and how its being sold (item, choice, times the money, etc.)
Know what it's worth to you.
Do not get emotional or competitive.
Figure your top bid in advance and do not exceed it.

 

[Rez Exelon]

I mean, any of ya'll that want to stay out of auctions is fine with me. I've picked up some humdinger class great deals from them over the years.

 

[Bravo1413]

Why do you charge buyer's premiums on top of the commissions the sellers are already paying? Seems to me online auctions are just another way to rip off buyers with exorbitant unearned fees. I for one decline to participate.

I will never attend any auction with a buyers premium. It is the sellers responsibility to pay the selling fee. Why doesn’t the seller just sell all to a firearms business? With all the fees added, the bidding will reflect the added $ and bidding will be lower. The auction house is making all the money. Just sell the lot and be done with it….. And what about all the disclaimers in this auction. If the sales don’t go as smoothly as they like, they can still charge the commission’s on sale that don’t complete for on reason or another. They have your c.c on file and state that charges can not be reversed…NOT.

 

[turkeyrun]

No different than gun shows. Charge per table rental to seller, then charge an entry fee to shoppers.

High table fee = less sellers.
Have 100 tables @ $25 / table = BIG show, BIG draw or
25 tables @ $100. Promoter makes same (this time), but next show, fewer sellers inquire / set up.

1000 lookers @ $5, free teens (to generate their interest) or
300 lookers @ $12 per head, few kids because of $$ and no future interest.

Business must make a profit, but how it is made is just as important.
Better to make $1 each and have 10 HAPPY customers, than make $10 on 1 and they feel taken advantage of and never return.

 

[wolfman1]

A day late and its all sold.

Stuff brought premium prices.

 

[KroyWen]

A day late and its all sold.

Stuff brought premium prices.

Agree $$

 

[wolfman1]

Agree $$

Yep, I saw several that went for more than I would have paid, then figure in at least 25% with all the fees, not to mention shipping and ffl fees.

 

[Shadowrider]

About everything I looked at went for close to retail if you figured in the fees.

This is why I never mess with these. You got people bidding a somewhat fair "street price" and it ends up just as much as you can buy new at a brick and mortar store. If it's a rare collectable it's crazy high.

If you think the gun is worth paying $1000 for you have to bid $750 and you basically never win.

 

[capnkirk462]

This might seems counter intuitive, but sometimes the higher buyer fees are a good thing. So a lot of people will not bid or tap out early because of the higher fees. I saw an auction a month or so ago online and WW2 P-38s, at least 5, went for only 400-425 each, yes the Buyers premium was 26%. They were in great shape not mint but not horrible either. Also in this auction a couple of decent Luger went in the 525-575 range. Same condition. I have won some auctions that had higher fees because I knew that most people will tap out a a certain price and just go for $10 over what most people will pay, now you got to practice self control and not getting in a bidding war. As a whole high buyers fee do suck but if you're patience and have some self control you can score a good deal from time to time.