Auction house commission,past a joke!

[vintage_football_memorabi]

Am I alone in wondering what the hell sporting auction houses are thinking at the moment when it comes to buyers commission rates.

We are talking about primarily football programmes not high end art and yet even though we are living in a recession and prices are plummeting if I wanted to buy an item from Sportingold today through the saleroom I would be looking at a buyers commission of 24%!!!!

Not so long ago Sportingold was 13% and has steadily rose until now when a lot of people especially when you look at the prices achieved today are saying enough is enough.

Does anyone agree?

[Tynie Topics]

Given they take a cut from both the seller and the buyer, I tend to agree, it's getting an expensive business.
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[Wullie]

24% Is this correct? sounds crazy to me.

[BAZZABAGGIES]

So if they sell £100,000 thats a tidy profit of £48,000..

No wonder there are 38 auctions a year

[1980Cossie]

It's all about convenience at the end of the day, i could drive down to Northampton and set off at 7 am and fill the tank up (twice) and pay 20.4% inc VAT in the room or bid in the comfort of my home or office and pay the extra 3.6% through the saleroom. If i were bidding for lot's with estimates over £100+ i could even phone bid or commission bid and still pay 20.4% which would save a few quid, for the sake of a few quid more its better than being stuck in traffic for hours and devaluing the car adding more miles

[Tynie Topics]

1980Cossie wrote:

It's all about convenience at the end of the day, i could drive down to Northampton and set off at 7 am and fill the tank up (twice) and pay 20.4% inc VAT in the room or bid in the comfort of my home or office and pay the extra 3.6% through the saleroom. If i were bidding for lot's with estimates over £100+ i could even phone bid or commission bid and still pay 20.4% which would save a few quid, for the sake of a few quid more its better than being stuck in traffic for hours and devaluing the car adding more miles

I think maybe the point is that commission shouldn't be so high in the first place, regardless of whether you attend or bid at home.

ebay charge what, 10% to sellers? OK, volume is dramatically different but then again they don't charge the buyer. There should be no buyer commission at auction houses IMO.
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[manchesterunitedman1]

I think both Cossie and Tynie have made excellent points for sure.

I will only attend personally if i am in that area or it even warrants it.

I have like many others the option to ask for images of any items before hand if i want to satisfy myself that the condition is as it is so there can be no come back later from me.

But the top and bottom of it all is quite simple, the fees are creeping up and up continually, at Bonhams and Graham Budd you are looking at 24% just to bid in the room or on the phone and internet buyers pay more.

Recently i became involved in one of those specialist auctions selling signatures, i knew the rate so when my bill came i was astounded to see a further 3% commission added-when i called them and queried it they said that ALL TELEPHONE BIDDERS pay the extra as they have to bring in people especially and use their own phones, so i spoke to another person there in authority and asked how many persons were attending the sale and manning all the phone bids-answer 2!.

Another member says this is not fine art! quite right and i recall Dick Turpin wore a bloody mask!

Despite all of this it is not stopping folks paying the fees and buying the stuff-today at Sportingold and the recent world record for the 1909 Cup Final at £23,000 +24% added a further £5500 commissions to Graham plus what he grabbed off the vendor!.

Some auction people are charging 16/17% but the fees have surely got to hit a ceiling as more and more vendors are concerned that buyers will simply stop bidding for the higher priced items and force them to sell it themselves perhaps.
2Leslie Millman-manchesterunitedman1

[treble99]

A very interesting discussion and one that can go in several directions.

The main point for me is choice.
A bidder has the choice whether to bid or not.
If he doesn't want an item he won't bid so commission doesn't matter.
If he does want to bid he is aware(or he should be) of all the costs involved and tailor his bid accordingly.
They include either/or commission and other costs such as petrol and time.
Nobody has mentioned time yet.
What amount of time will you spend driving to an auction and how much is that worth to you.

Also profit,or rather gross profit has been mentioned but nobody has mentioned auction house expenses.
Different auction houses will have different expenses.
As an example i would expect Graham Budd's centre of London rent to be significant.
Also Sportingold have to pay Northampon Rugby Club rent a 5 or 6 times a month.
Sporting Memory's rent a hotel as does Football Sports Auctions.
I suspect none of these costs are "cheap"
What does an auctioneer charge?
I have no idea but would £1000 a day be a good guess?
All these establishments have to provide services to collect the items in and then they gave to sort and value them.
On the day there are usually 5/8 people helping with viewing,registering,payment etc
There is also IT costs
All expenses.

the more interesting point to me is how many dealers are able to buy at these auctions.
I was at Sportingold yesterday and the percentage of dealers was significantly more than the the percentage of pure collectors.
I don't have a problem with that.
It is just an observation.
The point i am making is that there is clearly a profit to be made for dealers even taking into account the "high" commission costs they have to pay.
Equally interesting to me is a question i don't have the answer to which is on average how many lots are sent to auction houses by dealers.
These dealers could use ebay and pay a straight 10% on sales only but choose to use auction houses.
I am aware that commission deals are naturally offered by all auction houses to regular contributors but it is still a point.

I think it is usually the quality of the item.

Not everybody lives on ebay and a collector can often miss an item on ebay.
Ebay has many faults for both the seller and the buyer.
As a buyer there is always the risk of the conman with the item that doesn't exist who takes your money and dissappears.
Paypal,despite the advertisng,does not protect you.
You only get your money back if the b uyer cannot provide proof of posting AND he still has the money in his paypal account.
No conman would leave it would they.
The conmen as mentioned many times on this forum just re invent themselves.
Also the recent ticket fraud case shows how easy it is to con people and i be;ieve that if the money involved had not been such a large amount the police would not have been involved.
With an auction house there is always somebody on the end of a phone to listen AND understand your concerns.
Often the auction houses weed these problems out early

Ebay is also not always good for the seller as you can offer a quality item for sale without realising what you have and before you know it you are given an "I'll buy it now offer" which seems incredible but actually only represents a percentage of what you would get if you let it run or put it in an auction(even after commission)

Even on ebay there are people that can buy for 99p and sell for £3 on places such as this forum which let's be honest has more dealers than collectors.
Again not an issue but just an observation.

Plenty to talk about eh

[Tynie Topics]

What is the normal commission an auction house takes from a seller?

If we assume that say, 20% is a good average for a buyer, and they charge the same on a seller, that can be £40 made on an item that sells on the hammer at £100. That's ridiculous (if those percentages are accurate).
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[DannyRoberts]

The auction house will typically make 15-20% commission from the buyer and a similar amount (possibly slightly less if the vendor can haggle when consigning) from the seller.

So there is a great deal of money to be made as an auction house and hence, I suspect, the emergence of so many sports memorabilia auctions.

As a buyer I would have thought that it is wise to have a pre-set limit on what you are willing to bid on a particular item and, in the case of the auction yesterday where the commission for internet bidders was around 24% in total, adjust your pre-set limit slightly downwards to take into account all the additional expenses.

I noted that many of the usually sought after Chelsea items went relatively cheaply yesterday - either the bottom has fallen out or most of the 'boys' were in Japan.

[treble99]

you are right and you are wrong.

20% commission for a buyer and a seller is not unusual but look at it from all angles.
If an item is seen to be worth say £175 and it hammers at £100 plus approximately 20% so £120 then there is still £55 to be made by a dealer.
As i say there were lots of dealers about yesterday.
Roy Calmels bought a lot of early non league items.
He happily paid the 20% or so commission which now becomes irrelevant as he is still making a profit.
I say irrelevant because if there was nio commission he might have had to still pay £120 on a hammer.
When he pays £100 he knows exactly what it is going to cost him gross.

Equally many items offered for sale were also dealers items as i have seen many offered on ebay and catalogues and gone unsold.
It is just another potential outlet for dealers.
As i say i have no problem with that at all.

It is no different to a bedroom bandit buying on ebay for 99p off a dealer and trying to sell to dealer on here for a couple of quid.
Just different percentages

[Posh1959]

Selling commission is only 10% and buyers commision is 17 % at Sportingold. The rest is made up of VAT on commission so not they are not making nearly 40% as has been stated.

Ebay charge 10% but then add on the 3% paypal charges and you have 13%.

I was at Sportingold yesterday and can only remember seeing 4 dealers, but there was numerous collectors.

[treble99]

when i left about half way through there were 8 people in the room.
4 dealers and 4 collectors.
Roy Calmels had already gone as had a handfull of collectors

Most of the business these days is on the net or the phone

[Tynie Topics]

Interesting stuff. There are definately pros and cons to buying/selling at auction.

What I have noticed recently with a number of items I have looked at in auction catalogues, is that the estimates/reserves were "keen" so to speak, a bit over what I would consider to be a fair price, and that is without factoring in commission.

Of course I could have submitted a low bid more in line with my valuation (and taking commission into consideration) but decided to pass.
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[Fishy]

Posh1959 wrote:

Selling commission is only 10% and buyers commision is 17 % at Sportingold. The rest is made up of VAT on commission so not they are not making nearly 40% as has been stated. Ebay charge 10% but then add on the 3% paypal charges and you have 13%. I was at Sportingold yesterday and can only remember seeing 4 dealers, but there was numerous collectors.

Goood points....... there is also the Saleroom.com fee which bumps it up to the 24% inc vat.

Once again, we all have a choice 'to buy or not to buy' - it all depends on how badly you want it. The only way to stop these 'high' commission rates is to stop buying all together and put the auction houses out of business, then we'll be left with fleabay (and the problems already discussed.

It would also leave us with less of a choice IMHO as people like Chris Williams bring a lot of good items to an open market - he is moving his auctions to Stokenchurch in February - a smaller venue? If there were only a few people at yesterdays auction perhaps the time will come when it will be held in a village hall - who knows! But as technology moves on, costs of getting to venues increase then this may be the way forward.

I never go to programme auctions as I live in Cornwall and am a one club collector - this makes the 'high' commission cost effective for me personally.

It's all about choices at the end of the day - still a great hobby

[Posh1959]

treble99 wrote:

when i left about half way through there were 8 people in the room. 4 dealers and 4 collectors. Roy Calmels had already gone as had a handfull of collectors Most of the business these days is on the net or the phone

the only dealers i saw all day were Roy Calmels, Dorian Taylor and John Dee and he lives in Northampton was once a partner in Sportingold and helps out.

[treble99]

Roy Connor

[Posh1959]

Roy Connor is not a dealer any more than you are, he is primarily a collector, yes he sells programmes on Ebay to subsidise collecting but so do most of us. He never has stall at fairs and doesnt issue a catalogue.

As for commission etc i agree the main winner is the auction house a minimum gain of 25% on all sold lots equates to £25000 for every £100000, Take away overheads of staff, venue hire, advertising, catalogue printing and distributing, lot collecting, time spent collating and typing up the catalogue, insuring the stock, paying tax etc and they need good sales. Nearly forgot a good freelance auctioneer is not cheap

[BAZZABAGGIES]

There are 5,000+ dealers of Football Programmes and I am one of the very few that pays tax. There is one PRIVATE INDIVIDUAL AND NOT A DEALER who sells on Ebay and has over 10,000 + Feedbacks.
The tax man needs to investigate

[treble99]

Posh1959 wrote:

Roy Connor is not a dealer any more than you are, he is primarily a collector, yes he sells programmes on Ebay to subsidise collecting but so do most of us. He never has stall at fairs and doesnt issue a catalogue. As for commission etc i agree the main winner is the auction house a minimum gain of 25% on all sold lots equates to £25000 for every £100000, Take away overheads of staff, venue hire, advertising, catalogue printing and distributing, lot collecting, time spent collating and typing up the catalogue, insuring the stock, paying tax etc and they need good sales. Nearly forgot a good freelance auctioneer is not cheap

I can only issue an apology to Roy.
I was not sure if he was a dealer or not and to be honest it doesn't concern me whether he is or not.
I like Roy and consider him a friend.
The only reason i thought he was a dealer was because he has declared himself as a business on ebay.
It looks like that led me to make an incorrect presumption.