2017-07-25 Tue

From 14th August onwards, Stack’s Bowers would be increasing the buyer’s fee to 20 percent for all kinds of auction formats like live and online sales. Officials stated that this move will provide buyers simplicity and uniformity in auctions regardless of the location or type of auction. Heritage Auction would also be following suit. This pattern of multiple auction houses raising buyer’s fee at the same time has been seen before as well. Christie’s increased buyer’s fees in September 2016 and Sotheby’s did the same in October 2016.

Initially, there was no buyer’s fee. This was advertised by Christie’s and Sotheby’s in the mid-1970s. In the 1990s the “BP” increased to 15 percent. In 2000s buyers are charged more for lower-value lots where the profit margin is less.

To top it, sellers at auction are charged a commission. The hammer price along with the buyer’s premium is what the buyer pays. At the ANA auctions this year, the seller would get the hammer price along with an agreed upon percentage above that bid.

Bidders lower their bids when buyer’s premium increases and thus the BP increases. This has very less impact on the final prices but will be good for the hobby overall. A drop in buyer’s premium helps auctioneers change profit margin pressure and invest in improving the customer experience.