With so many auction houses selling antiques and collectibles through both traditional bidding floor action and in live online sales, it is easier than ever to bid against others to build an antique collection or inventory. Even the big names, like Christie’s, are getting in on live internet selling.
Whether you’re using LiveAuctioneers, Invaluable, iCollector, or a host of others, there are some terms you need to know to bid wisely and avoid paying more than you intended, or missing something you can’t live without.
This term comes up in both traditional live auctions and live online sales. Essentially, this is a fee paid by the high bidder that is tacked on to the hammer down price by the auction company holding the sale. The money garnered through a buyer’s premium is intended to cover administrative costs incurred by the auction house.
This fee can vary from auction company to auction company, and usually ranges from 10-25 percent of the final value. Some premiums actually go down as the price of an item rises, like with artwork selling for hundreds of thousands or even millions.
Since this amount can add a hefty sum to your auction bill at all price points, it’s wise to find out how much buyer’s premium is being charged before you bid. Some online auction bidding tools will show the total including the buyer’s premium when you’re placing either a live or proxy bid (see below for more information on proxy bidding) so there are no surprises.
Both buyers and sellers benefit from lower buyer’s premiums, since bidders are prone to spend less when they have to pay higher fees. That equates to less proceeds going to the consignor, also known as the seller, of the item in the end.
It’s also wise to take into consideration that a buyer’s premium may have been added on when perusing closed auction listings to glean pricing information when valuing antiques.
An item selling for $10,000 with a 19 percent buyer’s premium, for instance, would have a fee $1,900 added on.
A reserve price is the minimum a seller, also known as a consignor in the auction world, will take for an item. Online shoppers have selectively seen reserve prices used when buying through eBay auctions all along, so this is not a new concept.
There are times in live auctions, whether attended in person or online, that pieces are sold with reserves as well. In general, buyers tend to shy away from reserve auctions because, whether it is warranted or not, they have concerns that the price will go far beyond what they are willing to pay.
Some bargain hunters look for auctions promoted as “no reserve,” meaning that all items within the auction will be sold regardless of the hammer down price.
Proxy bidding is actually a very convenient way to shop if you are trying to control your spending. Like with eBay, either directly through the site or utilizing a sniping service, you place your bid for the highest amount you are willing to pay and walk away. If someone else outbids you during the course of the auction, you can bid again. Many people use sniping services to “set it and forget it,” so to speak.
That way they don’t get caught up in bidding wars and pay far more than they originally intended.
Live online auctions allow proxy bidding as well. This is similar to leaving an absentee bid during a traditional auction. Keep in mind, however, that if the bid trumping yours doesn’t occur until the live auction takes place online, you may not have a chance to bid again. Be sure to bid as high as you’re willing to go if the item is something you’ll kick yourself for missing out on.
Added Fees for International Bidding
It may seem like lots of fun to buy online through an auction being held in Paris. It's the next best thing to being there, right?
Well, yes and no. It's great to be able to buy from a foreign country when there is no hope of ever being able to go in person. You'll get an opportunity to buy, perhaps, things that you'd never see otherwise.
But that can come at a price.
Always keep in mind that there are exchange rates from the euro (or whatever currency is common to the country where the auction is being held) to the dollar. Depending on the current currency conversion rate, you can pay a lot more than just the price you bid plus the buyer's premium once you receive that final invoice. If you've ever traveled abroad and did some shopping in person, it's the same concept.
Then there are the fees your credit card company may charge for a foreign transaction. A fee of three percent or more is not uncommon, and that tacks on even more to the price.
And don't forget about shipping. Many auction houses, even domestically, use third party shippers instead of accomplishing that task in house. That usually means paying quite a bit more for shipping than than you may be accustomed to as a buyer of antiques and collectibles.
It can be worth every penny if you really want that item badly, but it's wise to remember that exchange rates, credit card fees, and high shipping costs can really jack up the price of your international prize.