Taking Stock # 23: The Low Commission Fallacy – The Games Other Auction Houses Play
We hear from our customers that the big auction houses can sometimes have lower commission than us, causing them wondering why we charge what we do. This may be true, but it DOES NOT mean a higher net amount to you. These companies have huge overhead and spend hundreds of thousand of dollars on catalogs alone, so they need to make their money somehow. Here is how they do it and here is how it comes out of your pocket…
First, only large collections and high valued items receive these advertised rates. We discount too for large collections and expensive items, though we start discounting long before the auction houses will. Chances are, unless you bring these auction houses $100,000+ in merchandise, you wont see any reduction in commission.
Second, before consigning, investigate their hidden fees. You will frequently find cataloging fees, photography fees, reserve fees, transportation fees and they even charge you for insurance. We charge ZERO HIDDEN FEES. You get whatever the auction realizes, less our commission. We cover transportation, insurance, photography, descriptions and we do all of this at our flat low commission rate.
Third, these auction houses actually punish their buyers. They charge folks for the privilege of buying! This of course reduces bidder enthusiasm, and reduces the amount they bid. If buyers are looking at a $1,000 gun and there is a 10% Buyer’s premium (commission), they’ll only bid $900. This makes decision making during a brief auction difficult, and makes folks timid in their bidding. The result is a transfer of money received in the sale from the consignor to the auction house. Likewise, who wants to pay for the privilege of being a customer, we know several buyers who just refuse to participate in live auctions. Our buyers pay their bid amount + shipping, and THAT IS ALL.
Fourth, what are you getting for your money? At a live auction, your gun will be at auction for between 30 seconds and 2 minutes. With us, bidders have 14 full days to submit their bids. If someone is in the bathroom at a big auction, they just missed out on your gun and you just missed out on another bid. With the convenience of bidding from your home, over the course of 2 weeks, and over the internet, we dont miss any bids. Sure some of the auction houses use proxy bidder services, but this is just one more hand in your pocket.
Finally, we invite you to examine the difference between our auctions and the larger auction house catalogs. You are lucky to have one picture in a catalog, we generally provide between 20 and 30. Our descriptions are at least twice as long, giving the buyers complete and accurate information. When they know what they are bidding on, and can see it, they’ll bid higher.
How do we know all of this? We are frequent resale buyers from all of the auction houses. We buy merchandise from them and resell it through our methods. If we can buy a gun that you consigned at an auction house, plus the buyers premium, and still turn it around for a profit, we could have delivered more money to you in the first place.