17.5% - A ridiculous buyers premium for a less than attentive and extremely slow customer service? by wdrob
0

59 posts in this topic

2,870 posts

 

Being that this journal entry was made with a question mark at the end of the title it has served its purpose in my mind and that was exactly as stated -- is that percentage to high for a company that lacks in the customer service department.

 

I have heard arguments of personal experiences on both sides of the presented question. Extremes would be; "They ship within 4 days of receipt of payment 99.9% of the time" to "One was about three months and after many phone calls". Quite a contrast even if you remove the 3 month extreme example as a isolated incident and replace it with "cant say any of my winning arrived within 14 days of auction end. On average it takes about a month".

 

I feel confident that the norm lies somewhere in between the two above examples and I acknowledge your rationale Brandon when you stated, who cares how long if you are planning on keeping them in a collection. The only rebuttal I have to that is that I buy a good bit of stuff, mostly inexpensive items but on occasion I splurge. I have a tough time remembering what I purchased now as it is and do not want to be in a position where I have to make spreadsheet or mark every purchase on my calendar so I can remember I bought it.

 

Anything more than a week and I tend to forget. I just remembered a day or two ago that I had purchased something from a fellow forum member and had to ask them to verify I was not mistaken. Turns out that I did remember past a week, but just barely, and even then I was not certain.

 

No, three weeks to a month or even two weeks for that matter is not worthy of 17.5% in my opinion. Raisethis2's concerns are legitimate and I will do all of you that choose to do business with them a favor, and as much as I would like the coin, I will sit this one out and be one less customer for them to base their statistical analysis on in favor of raising the percentage to increase profits.

 

Thanks for all that weighed in as it was nice to hear both sides in order to make a decision.

 

 

Share this post


Link to post
Share on other sites
2,367 posts
The point I was attempting to make earlier in this thread is that the bigger auction companies have to be made to understand that the market can only bear so much.

 

Looking at the big picture it would be reasonable to assume that major collections coming to market over the past 2 years or so was probably known to them years in advance. As was stated, the owners of these collections probably negotiated a zero Sellers fee (or close to it +-) accordingly, the Buyers are saddled with a 17 1/2 % hit they needed to try to get a handle on.

 

Once the bigger collections have been redistributed and the market has been sufficiently diluted, reselling those coins or bringing smaller or less important collections to market in the years to come might get sketchy. If the bigger auction companies see they're making less profits and working harder for them, bumping Buyers Premiums to 20% might make sense to them.

 

If we don't object now, good luck objecting when BP's go up when things are slow.

 

 

I understand your point. The only way for any business to understand that threshold is buy sales revenue. As long as auction houses continue to generate record revenues for their auctions, nothing will be done.

 

If they decide at some point to go to 20% BP and their traffic declines significantly, than they will need to rethink it.

 

When I first started bidding at the auction houses, I was leery of the BP, but the more experience I got, the less I even thought about it. It's now ingrained in my bidding pattern.

Share this post


Link to post
Share on other sites
2,367 posts

Being that this journal entry was made with a question mark at the end of the title it has served its purpose in my mind and that was exactly as stated -- is that percentage to high for a company that lacks in the customer service department.

 

I have heard arguments of personal experiences on both sides of the presented question. Extremes would be; "They ship within 4 days of receipt of payment 99.9% of the time" to "One was about three months and after many phone calls". Quite a contrast even if you remove the 3 month extreme example as a isolated incident and replace it with "cant say any of my winning arrived within 14 days of auction end. On average it takes about a month".

 

I feel confident that the norm lies somewhere in between the two above examples and I acknowledge your rationale Brandon when you stated, who cares how long if you are planning on keeping them in a collection. The only rebuttal I have to that is that I buy a good bit of stuff, mostly inexpensive items but on occasion I splurge. I have a tough time remembering what I purchased now as it is and do not want to be in a position where I have to make spreadsheet or mark every purchase on my calendar so I can remember I bought it.

 

Anything more than a week and I tend to forget. I just remembered a day or two ago that I had purchased something from a fellow forum member and had to ask them to verify I was not mistaken. Turns out that I did remember past a week, but just barely, and even then I was not certain.

 

No, three weeks to a month or even two weeks for that matter is not worthy of 17.5% in my opinion. Raisethis2's concerns are legitimate and I will do all of you that choose to do business with them a favor, and as much as I would like the coin, I will sit this one out and be one less customer for them to base their statistical analysis on in favor of raising the percentage to increase profits.

 

Thanks for all that weighed in as it was nice to hear both sides in order to make a decision.

 

 

It was a good discussion Bill! As you can see, people's opinions are quite varied and tailored to their own experiences, as one would expect.

 

I didn't like the high BP at the large auction houses at first either. I came to a quick conclussion though. If I wanted to add coins from the large auction houses to my collection, I had to come to terms with the BP.

Share this post


Link to post
Share on other sites
3,304 posts

Most hobbyists are happy to break even if they bought the item wisely, small losses are also OK since no one needs numismatics to live ordinarily. Dealers can ask what they want and the merit with an auction is hopefully widespread visibility. But potential buyers need to do their due diligence as to value and reasonable pricing. I do think that 17.5% is too high. Teletrade was 5.5% on their gold which was an ideal # IMO.

Share this post


Link to post
Share on other sites
1,314 posts

In one scenario you have a BP of 12%. In another scenario you have a BP of 18%. In both scenarios there are set bid increments.

 

Both the seller and the auction company gain the most when the bidding is lively – when the buyers are willing to go that one more bid.

 

Which of the two scenarios mentioned above would be most likely to encourage this kind of bidding?

 

Would bidding in these two scenarios be livelier without a BP?

 

 

 

 

 

 

 

403f448d-779d-4caf-a628-04d68daf8db0_zpsyixbmyo6.jpg

 

Edited by Afterword

Share this post


Link to post
Share on other sites
2,870 posts

 

 

Both the seller and the auction company gain the most when the bidding is lively – when the buyers are willing to go that one more bid.

 

 

That might be why in the terms and conditions of Heritage Auction it is stated that the seller can bid on their own items.

 

Seller sees someone willing to go heavy on his item, with the higher sellers fees of 20% it incentivises the seller to manipulate the auction in their favor to help compensate for the combined total of 37.5%

 

Let me say that one more time so it sinks in; a combined total of 37.5% goes to HA. That is nearly a 60/40 split.

 

Bloated?

 

 

Share this post


Link to post
Share on other sites
95 posts
Seller sees someone willing to go heavy on his item, with the higher sellers fees of 20% it incentivises the seller to manipulate the auction in their favor to help compensate for the combined total of 37.5%

 

Let me say that one more time so it sinks in; a combined total of 37.5% goes to HA. That is nearly a 60/40 split.

 

Have I missed something? When did HA's seller's fee go to 20%? When I consigned some coins a few years ago, it was 5%. And that applied only to coins for which I didn't have coupons for no seller's fee.

 

But is still seems like some folks don't get it, but Meade Collection does: The fees don't affect the buyer! The buyer simply decides how much he or she is willing to pay. Yes, that maximum bid amount has to have the BP factored in, but that's it. The buyer should not care how his or her payment is divided between seller and auction house.

 

When it's time to sell, then you should care, and many of the points made in this thread apply.

 

If you are buying with the specific intent to sell at some point, then the fees should matter to you in a general sense. But again: specifically as a buyer, the fees don't matter!

 

Alan

Share this post


Link to post
Share on other sites
2,870 posts
Seller sees someone willing to go heavy on his item, with the higher sellers fees of 20% it incentivises the seller to manipulate the auction in their favor to help compensate for the combined total of 37.5%

 

Let me say that one more time so it sinks in; a combined total of 37.5% goes to HA. That is nearly a 60/40 split.

 

Have I missed something? When did HA's seller's fee go to 20%? When I consigned some coins a few years ago, it was 5%. And that applied only to coins for which I didn't have coupons for no seller's fee.

 

A few years ago? How many years? 3, 5, 10?

 

I guess it has to do with what you have to consign and who you are. The number of PM and email that I received from those that had experiences with HA but either don't have an account here, don't wish to opine in a public forum, etc.. would surprise you I would think.

 

I have never consigned anything with them but one particular email exchange I read between HA and a potential consigner (if their item would have met their established value guidelines) stated a flat 20% sellers fee on the hammer price. That was a little less than 2 years ago. Possibly they lowered their fees? :facepalm:

 

But is still seems like some folks don't get it, but Meade Collection does: The fees don't affect the buyer! The buyer simply decides how much he or she is willing to pay. Yes, that maximum bid amount has to have the BP factored in, but that's it. The buyer should not care how his or her payment is divided between seller and auction house.

 

Hmm. I know how you feel. Some folks just can't see the forest from the trees. ;)

 

Share this post


Link to post
Share on other sites
13,380 posts

Basic terms of business are agreed to by all in advance of the transaction (within limits of the Commercial Code). The % is just part of doing business.

Share this post


Link to post
Share on other sites
13,041 posts
Seller sees someone willing to go heavy on his item, with the higher sellers fees of 20% it incentivises the seller to manipulate the auction in their favor to help compensate for the combined total of 37.5%

 

Let me say that one more time so it sinks in; a combined total of 37.5% goes to HA. That is nearly a 60/40 split.

 

Have I missed something? When did HA's seller's fee go to 20%? When I consigned some coins a few years ago, it was 5%. And that applied only to coins for which I didn't have coupons for no seller's fee.

 

But is still seems like some folks don't get it, but Meade Collection does: The fees don't affect the buyer! The buyer simply decides how much he or she is willing to pay. Yes, that maximum bid amount has to have the BP factored in, but that's it. The buyer should not care how his or her payment is divided between seller and auction house.

 

When it's time to sell, then you should care, and many of the points made in this thread apply.

 

If you are buying with the specific intent to sell at some point, then the fees should matter to you in a general sense. But again: specifically as a buyer, the fees don't matter!

 

Alan

 

Seller's fees aren't and never have been as high as 20% for Heritage signature coin sale consignments.

Share this post


Link to post
Share on other sites
395 posts

So, a SME on Heritage fees has stated his opinion that,

 

"Seller's fees aren't and never have been as high as 20% for Heritage signature coin sale consignments."

 

Anyone disagree, or is that a nolo contendere by all ?

 

Thanks for weighing in Mark !

 

 

 

 

 

 

 

Share this post


Link to post
Share on other sites
9,029 posts
Seller's fees aren't and never have been as high as 20% for Heritage signature coin sale consignments.

True but they will be eventually. 20% is already the standard in Europe with some at 21.5% (Plus a 15% VAT if the coin is delivered in the EU.)

Share this post


Link to post
Share on other sites
1,314 posts

As long as you never plan on selling, you will be fine.

 

 

 

 

 

 

403f448d-779d-4caf-a628-04d68daf8db0_zpsyixbmyo6.jpg

Edited by Afterword

Share this post


Link to post
Share on other sites
2,870 posts

 

So, a SME on Heritage fees has stated his opinion that,

 

"Seller's fees aren't and never have been as high as 20% for Heritage signature coin sale consignments."

 

Anyone disagree, or is that a nolo contendere by all ?

 

Thanks for weighing in Mark !

 

 

Now the rest of the story ...

 

The original statement was :

 

 

That might be why in the terms and conditions of Heritage Auction it is stated that the seller can bid on their own items.

 

Seller sees someone willing to go heavy on his item, with the higher sellers fees of 20% it incentivises the seller to manipulate the auction in their favor to help compensate for the combined total of 37.5%

 

Let me say that one more time so it sinks in; a combined total of 37.5% goes to HA. That is nearly a 60/40 split.

 

Bloated?

 

 

Also:

 

A few years ago? How many years? 3, 5, 10?

 

I guess it has to do with what you have to consign and who you are. The number of PM and email that I received from those that had experiences with HA but either don't have an account here, don't wish to opine in a public forum, etc.. would surprise you I would think.

 

I have never consigned anything with them but one particular email exchange I read between HA and a potential consigner (if their item would have met their established value guidelines) stated a flat 20% sellers fee on the hammer price. That was a little less than 2 years ago. Possibly they lowered their fees? :facepalm:

 

 

 

Someone claimed that they paid only 5% "a few years ago". My response was the above. I never claimed that he didn't pay only 5% a few years ago.. Far from it. I stated "I guess it has to do with what you have to consign and who you are.".

 

Heritage signature coin sale consignments. -- what exactly is that? Is that different from just any coin sale consignment? Is that the same thing that Electric Peak was involved with "a few years ago"? If so, are they still 5%? If not, why be so ambiguous and instead just come in and say Coin Sale Consignments Are Not 20% But Are XX% ???

 

Here is the better suited question: Are the rates to consign coins (any coin) higher now than they were "a few years ago? If so, how much are they?

 

Also; are there any consignments that Heritage deals with that charges 20% or more on?

 

 

 

 

Share this post


Link to post
Share on other sites
3,304 posts

Heritage Auctions is the biggest, and there is quite a bit of debate who are the best auctions companies, but considering the diversity of their experts and the fields they work to auction off, potential consignors need to do their due diligence and look at their contracts. And who really reads all the legal fine print? I have a collector friend in an area town who had HA handle his rare coins and was generally well-treated. He could have gotten more money on the proof gold eagles if he had asked me about that and the rare Buffalo coins which are not as strong now as they once were probably should have gone through CAC before the auction. In many cases the sellers do not ask the right questions as well as being persistent. HA pays 105% in many cases of larger collections, so if they bring in more money through their high profile services, that is an advantage.

Share this post


Link to post
Share on other sites
1,700 posts

I have consigned to Goldberg's auctions and they have wonderful items at their auctions--they also have never charged me a seller's fee, there are other auction houses which will negotiate consignment fees ( especially to add some items if a scheduled auction is lean of inventory.)

 

Personally only--------- I think 17.5% is way too high of a margin for an auction service.

-----------I quit using Heritage about 7 years ago because they acknowledge shill bidding on items and driving up prices for buyers. They also "lost" 4 of my coins from a platinum night auction and offered me a low ball offer for the coins, only for the coins to show up at another of their auctions months later and I finally had them returned. The first consignment I did with them took almost 9 months for the final check to arrive. There are a few other issues I had with them but I'll not list them all....

 

Careful criticizing Heritage at this site---there are deep business ties between Heritage and NGC.

 

The coin industry is rife with shill bidding, inherent collusion between auction houses, labelers and green bean providers, former graders of one TPG then with insider contacts working at said auction houses......etc etc

 

The bottom line is, if you don't want to contribute to the "industry" aspect of numismatics--then just don't. Stick with numismatics as a hobby and buy from ebay, raw coins for albums

---------and NEVER think you will come anywhere close to breaking even financially as a collector of slabs-- between buyers fees, sellers fees, slab costs, shipping etc etc--when acquiring and liquidating, you are gonna have to see a 30% or greater value increase in your coins to break even--and whether you noticed or not, coins have been sliding in value for the most part for decades--only the top priced and key dates have increased. ( easy reference is auction histories--or look at the NGC priceguide charts when you click on a date/grade.)

 

I agree with you wdrob for the most part--if you are offended by exorbitant buyer's fees and wish to stand on that principle then do so! There will be exceptions when spectacular coins are worth the costs but I get you...

 

Now if we could get 95% of the rest of the collector's to conscientiously object to 17.5% and stop bidding for 1 year until costs were dropped, we'd all be enjoying 12 to 15% in 6 months ( unfortunately we are more likely to see 20% instead, because like all of the wall street types and 1%ers out there, more is never enough.)

-

Share this post


Link to post
Share on other sites
3,304 posts

I had a really bad results with Goldberg's auction, I could go into the details, suffice it to say they may be better now.

 

Ebay works for rare and popular coins and buy it now with offers if you know what you are doing. Powersellers get the % down to a little over 7%, can do their own photography or plug into the system pro pictures, and you get quick payments. I have seen people do advantageous deals around $10K in days on ebay, if you went through any of the other auction routes you would have over a month, more often a six month wait on major coins for payment and would only have a say in your reserves, etc..

Share this post


Link to post
Share on other sites
192 posts

In the last four years I've purchased coins from Heritage, Goldberg's and Stack's Bowers. All three charge a 17.5% buyer's fee. So far I have never waited more than two weeks after payment for delivery, in fact Heritage actually shipped once before I paid.

 

No one offers the variety available at these three firms.Sometimes ya gotta bite the bullet if you want to fill a hole in your collection.

Share this post


Link to post
Share on other sites
4,875 posts

 

1) The buyers premium is the margin collected by the auctioneer and is part of the final price of the sale. As others have said, you are supposed to factor this in when bidding.

 

2) This post would have been more effective had it explained first-hand, negative experiences, and not second-hand hearsay. I deal with said company on a weekly bases and have never had such a problem. They ship within 4 days of receipt of payment 99.9% of the time.

 

3) The company in questions runs different tiers of auctions, and requires a minimum value for consignments to various auctions. If the coins' value falls below this threshold, said company may have told him they were not interested.

 

4) I think the hearsay and a misunderstandings endured by a third party are preventing you from enjoying the hobby, even though you have not experienced a problem. I think that's a shame.

 

 

 

I have looked all around and I fail to see a bailiff, a stenographer, a jury, or even a judge. What on earth would make you think the rules of evidentiary proceedings apply here in an informal discussion.

 

Was that an "Objection your honor!" that I just heard?

 

As I stated above, it has been said so many times, by so many people on this forum when suggesting auction sites to new members - when they come to HA there always seems to be a stipulation attached. That stipulation is more often than not "Heritage is one of your best bets but it takes them forever to get your item out to you once you have purchased it.".

 

If we are bound to follow your rule of no hearsay then fine -- although I might wish to point out to you that the written word is not hearsay and is effective demonstrable evidence in even the most highly publicised civil matters.

 

Item #1 - Has been addressed.

 

Item #2 - The post would have been a LIE if I had addressed something that has never taken place. You have your purchased items "shipped within 4 days of receipt of payment 99.9% of the time". OK. I have my items in hand from another more attentive company in 3 days 100% of the time!

 

Item #3 - I know nothing about that. Want to know why? I have searched and searched for even the simplest fee schedule on selling or consigning through that auction site and they do not list it from what I can tell. All I did find is a section that said if you had items you wished to consign then contact us and we can discuss it. I guess I am just old fashioned in that I prefer transparency over the method they have chosen.

 

Item #4 - Whoa!!! News flash there chopper -- a person does not have to buy through HA, Legend, Morphy, etc... to enjoy this hobby. Unbelievable!

 

Once again, it is not the "misunderstandings endured by a third party" that has me staying away from bidding on HA --- IT IS THE 17.5% BUYERS FEE!!! :eek:

 

 

Always a pleasure watching you play devils advocate Sam. :grin:

 

 

 

 

 

I don't know what that was all about, and I don't recall him mentioning any written words. ;)

 

However, I do know about Heritage turnaround times, and I think there are a number of misconceptions about them.

 

For instance, due to requests by regular bidders like myself, who were constantly having to pay separate shipping fees for each auction, Heritage now consolidates their Sunday and Tuesday night auctions by invoicing them together on Tuesday night, after the Tuesday sale concludes. If you pay for you winnings on Tuesday, or Wednesday, your lots will typically ship Wednesday, Thursday, or Friday. If you wait until Saturday, you might not get shipping until the next cycle begins. Regular and reliable bidders often qualify for automatic shipping, and lots can be shipped before payment is made.

 

With regard to the Heritage Signature auctions, these are destination auctions, and the coins have to be transported to the venue. There they will remain, through the duration of the sale, which might run four or five days, or more. Once the destination event has concluded, the coins must be transported back to Heritage for processing and shipping, which takes more time. That is why it takes a few extra days more than the weekly auctions. If you win something in auction session one, on the first day, you might have to wait a couple weeks, but the sale was not over when session one ended. Like the weekly format, you will be invoiced for all your winnings at the close of the last session.

Share this post


Link to post
Share on other sites
2,870 posts

 

That was an excellent explanation of the reason behind the various extremes. And thanks for explaining what a "Signature" auction is. (thumbs u

 

 

 

Share this post


Link to post
Share on other sites
4,875 posts

 

1) The buyers premium is the margin collected by the auctioneer and is part of the final price of the sale. As others have said, you are supposed to factor this in when bidding.

 

2) This post would have been more effective had it explained first-hand, negative experiences, and not second-hand hearsay. I deal with said company on a weekly bases and have never had such a problem. They ship within 4 days of receipt of payment 99.9% of the time.

 

3) The company in questions runs different tiers of auctions, and requires a minimum value for consignments to various auctions. If the coins' value falls below this threshold, said company may have told him they were not interested.

 

4) I think the hearsay and a misunderstandings endured by a third party are preventing you from enjoying the hobby, even though you have not experienced a problem. I think that's a shame.

 

 

.....

 

Item #4 - Whoa!!! News flash there chopper -- a person does not have to buy through HA, Legend, Morphy, etc... to enjoy this hobby. Unbelievable!

 

 

 

It was the original poster who said he was going to miss out on collecting, not me, Chopper ;)

 

This is exactly what the original poster said. He does contradict himself, however.

 

"With that; I think I will just have to leave the coin collecting to the "sophisticated". Will I miss out on some coins that are well within my reach that I would really be proud to add to my collection - yes, I am sure I will. But as is said many times before - "there will always be another coin that you will find equal to or better than the coin you might have to miss out on", due to a matter of principal."

Share this post


Link to post
Share on other sites
2,870 posts

 

That was me. I am the original poster. :whistle:

 

Now I am far more confused than normally. If that is even possible. :insane:

 

I don't think I contradicted myself, even in that blue quoted text. I said I would miss out on "some coins" - not all coins. Just some coins.

 

I am still collecting coins, and having a good time doing it. But I will just have to sit back and watch as this coin on Heritage, which is well within my reach, finds a new home in the collection of someone else. :sick:

 

The more I look at that coin, temptation increases the pressure to compromise my principles. I am so very close to caving in. :eek:

 

 

 

 

Share this post


Link to post
Share on other sites
1,425 posts

The more I look at that coin, temptation increases the pressure to compromise my principles. I am so very close to caving in. :eek:

 

Dang! I need the No Motto Seated Liberty Quarter for my type collection and that year is in my sights except that I was looking to buy an MS-63 example. Normally I don't spend on a coin what I think this coin will go for but you tempt me not so much in buying through Heritage, but in busting my budget. :eek: Yet this coin is also within my reach and I am tempted! :applause:

Gary

Share this post


Link to post
Share on other sites
2,870 posts

 

Yes it is a nice coin, in my opinion. I am passing so have at it. Good luck too. I think it should come in under $1,200.00 on final hammer but who knows. Throw a pedigree in there and there is really no telling where it might end. (shrug)

 

 

Share this post


Link to post
Share on other sites
1,425 posts

Yes it is a nice coin, in my opinion. I am passing so have at it. Good luck too. I think it should come in under $1,200.00 on final hammer but who knows. Throw a pedigree in there and there is really no telling where it might end. (shrug)

 

This coin is now beyond what I am able to pay for it. With buyers premium the next bid is $1645.00. I had put my best bid in, but it seems someone else wants the coin worse than I do or at least can better afford it than I can. That's alright, I have a back-up plan!

Gary

Share this post


Link to post
Share on other sites
2,764 posts

Buying at auction houses is a different issue than selling. The only place I have sold at an auction house is GC, and the coins came in at the value they should have. They had the lowest fees attached with consigning and these were coins I wanted to be relieved of. And my payment arrived within a week. I don't think I would want to sell with a major auction house at present 'cause their fees are just too high. So it is GC for the right coins or none. I can sell to dealers I know on the bourse and get a better price and money in hand instantly for the better stuff I have. For lesser stuff, ebay is the best venue and have done fine there. Selling on the BST has also worked well and I try that before going to dealers on the bourse. So many ways to sell, you just need to know what to sell at which venue.

 

Buying at HA tho' has been good, will keep doing so. Never had to wait more than 2 weeks for winnings to arrive.

 

Best, HT who loves to bid on coins.

Share this post


Link to post
Share on other sites
2,870 posts

 

Gary, I would have never thought that coin would have gone far beyond $1,200.00 and when I saw it just above at $1,292.50 I thought that was about all she wrote.

 

But for that coin to be at $1,762.50 right now just tells me that a quality coin, regardless of whose plastic encases it, will bring strong money contrary to the belief of some.

 

I would have been out at $1,500.00 if I had of chosen to bid. No way I would have went that high on that coin. That coin is more than likely being bought by someone with all intentions of placing it in a PCGS holder at MS65, and with their connections - they will probably do just that.

 

I could be wrong as is often the case. ;)

 

 

Best, HT who loves to bid on coins.

 

Ahhh.. HT ... Your killing me. lol

 

 

 

Share this post


Link to post
Share on other sites
0