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Buyers premium

T

Texas Cowboy

Member
Location
Texas
The post below about Lorens sale got me to wondering again. Why do some people get so worked up about a buyers premium. Its not that hard to figure it out. Especially since most times its 10 percent. If you want to spend $500 on an item just bid $450 and you will save $5. To me its not a big deal. Tony
 
Because I cant add 10 percent to $450 in my head. I need a calculator.

But seriously. Why does a store sell a item for $499.95 rather than $500. And why is it always plus tax. You know what the tax is in advance just mark the out the door price on the item.

Be assured these things have been studied extensively over the years and sellers know how the human mind works especially when you have seconds to make a decision.
 
(quoted from post at 20:40:44 06/01/22) The post below about Lorens sale got me to wondering again. Why do some people get so worked up about a buyers premium. Its not that hard to figure it out. Especially since most times its 10 percent. If you want to spend $500 on an item just bid $450 and you will save $5. To me its not a big deal. Tony
Click to expand...

"Why do some people get so worked up about a buyers premium."

Because that's not the way it used to be and some of us old curmudgeons don't like change, 'K?
 
The auctioneer represents the seller.

As such, any fees, costs, overhead, etc should be paid by the seller.

Buyer should have a very clear simple bid or dont bid on a firm clear price. You have a few seconds to decide to bid, it should be on a real price, not some mathematical formula.

If it truly doesnt matter then lets drop the buyers premium and go back to a good normal bid process.

Eh?

Paul
 
Probably not that big of a deal for somebody that knows this, is clear about the auction circumstances, and only bids on one item when they go to an auction.

But when people forget for whatever reason, it's just a way to GOUGE a few extra dollars out of an item (or the buyer if you will) for the people who have a slip up, and forgot about the buyers premium.

You gotta realize, some people go to both kinds of auctions, and frequently. One little slip up of forgetting which type of auction it is, equals not bidding correctly on an item. If it's a buyers premium auction they made that mix up on, entails that they overbid on (overpaid what they intended for) that item.

There's people that are use to the old way they have been accustomed to for years. When introduced to the new buyers premium way, they are likely to forget a time or two, and well, you can imagine the rest. They bid as if they are at a normal auction that they are use to, and that leads to being hit with the buyers premium when they go to pay the clerk, and it really seems like they are getting stung when buyers premium was forgotten about while they were bidding. Usually when that happens, they are reminded of it when they pay the clerk. Then it's like, wait a darn minute here, and then that quickly turns into, I think I got took and screwed out of some extra money.
 
I've been to a buyer's premium sale where the auctioneer several times would drop the ten percent charge to get more bids, so how fair is that? Most auctioneers in my area have stated several times they will not have a buyer's premium due to the severe backlash of using the extra charge.
 
If you buy at a auction with a 10% buyers charge , you better find out if there is also a extra charge for using a charge card or Interact debt style card. Also your bank will charge you for using your banking tools. I have been to auctions when they charged 3% surcharge for using a credit card. In that situation you are going to pay 13% more if you buy a single item.
 
I think it's the auctioneers that have pushed this. A local auction company charges 10 percent to the seller and a 15 percet buyers premium. So they get 25 percent of everything sold.
 
Yea I don't get all the carrying on about buyers premium just figure it into your final bid.And if a person is really slow in the head go around the auction, make a list of items they want to bid on,write down a
maximum price to pay then find someone that can do 3rd grade math to write down when to stop bidding.Several things to consider when figuring the final price of an item,the BP,Credit card charges,sales tax if any,lunch,fuel for the ride,etc,etc.
 
If I were to sell my farm and machinery at auction for 2 million or so that they may bring, I'd feel like I put a lot of money into the auction. Auctioneering, or 'open out-cry' has a long history. That final, very public bid should be the selling price. I would want bidders to be assured of that at any auction I had, and I would pay the auctioneer.
 
When I was a used tractor and implement dealer I made a living buying at auctions and attended hundreds. I DID NOT LIKE THE BUYERS PREMIUM STILL DONT. However a person still has the free choice to buy or not buy at whatever the price plus any premium is and attend or not attend any such auctions. TO EACH THEIR OWN PS if the public revolted and no one would attend such an auction so nothing got sold now that might cause such a policy to change ya reckon lol ??

Best wishes to all here have a good one

John T
 
I guess if you are buying you want the seller to pay the auctioneer, if you are selling you want the buyer to pay?? Sheesh
 
Yea but you are getting the money from the bidders in the first place.If I'm a bidder I have my maximum I'm going to pay for an item after that I don't care how the money is split.Bottom line is no one can make me pay out a total amount more than I want to pay.
 
As prices and expenses have risen over the years, so also have auctioneers' commissions. Many potential customers were put off by the high commissions that auctioneers were demanding. To make it a bit more ''palatable'' for sellers, they came up with this gimmick to split the commissions between the seller and the bidders. This makes it appear to the sellers that the commissions are less (15% as opposed to 25%) expensive.

The truth of the matter is that the smart bidders will adjust their bids downward to account for buyer premiums. The auctioneers hope that many will neglect to account for the added expense and bid what they think they are paying for an item.

Personally, I don't like buyer premiums. I consider them a rip-off. Just a little more deceptive marketing. I usually don't go to auctions that have buyer premiums. There are enough around that do not have them.
 
The people who won't participate because of it, are fewer people to bid against me. So let them be.LOL
 
That's just it.There AINT ennymore.All us ol pharts is gone and the banks are still supporting the younger, bigger ones.Been to mebbe two farm auctions in last year!!!
 
I seldom go to auctions anymore. At my age, there's not that much that I need anymore. :)

But, as mentioned earlier, the auctioneer is working for the seller, and as such, it should be up to the seller to pay him for his services. I shouldn't have to pay for the privilege of buying something from him.
 
Lots of auctions have added internet bidding and add on around 6% for internet costs. But then they go will two internet companies and now it 12% added, even though you only bid though one company, both internet companies get paid. Now a lot of auctions are up to 15%... OUCH!!! especially for a tractor buyer like me. I have started to pick and chose which auctions I bid in.
 
I'm just an old guy that liked it the way it always use to be, seller always paid the fee's involved at auctions. I know, nothing stays the same for ever. I have paid the premium at sales but if I'm on the fence about attending a sale it will make a difference to me weather I attend or not.

I was at a sale when this buyers premium came about that had allot of big expensive green equipment that sold, some over 6 figures. A couple a buyers apparently didn't read the terms or understood them beforehand. I think they were about to call the police when I left when a couple of guys were trying to settling up afterwards. I didn't really understand it either at the time as most of us there have never seen or head of it before.
 
What difference does it make? Final price the buyer shells out is what he spends. How it's divided up or calculated to get there is meaningless. It's like buying fuel and getting yourself in a tizzy because the government is raking taxes on the sale.
 
Very few farm auctions any more, mostly house or junk auctions. And if you notice the good auctioneers are not doing that byers premium, only unknown or very poor thought of auctioners doing that. Just lost an auctioner friend last fall due to shoulder operation oferation that went wrong at 66 years old. He said he would never go to buyers premium
 
"Because I cant add 10 percent to $450 in my head. I need a calculator."

Seriously??? You simply cannot be serious about that and be admitting to it.
 
I haven't been to a live farm auction in years. But I have bid on a lot of stuff on online auctions - mostly machine shop stuff.
Most of those are charging 15-18% buyers fees. What gripes me is you have to pay sales tax on the item AND that 15-18% fee.
So, you just have to have to add about 25% above and beyond the hammer price and bid accordingly. If you can't do the simple arithmetic to add 1/4 to something bring a phone or calculator.
Despite all the add-ons there are still bargains to be had at auctions.
 
(quoted from post at 10:36:17 06/02/22) Lots of auctions have added internet bidding and add on around 6% for internet costs. But then they go will two internet companies and now it 12% added, even though you only bid though one company, both internet companies get paid. Now a lot of auctions are up to 15%... OUCH!!! especially for a tractor buyer like me. I have started to pick and chose which auctions I bid in.
Click to expand...

NO, Both internet companies do not get 12%, only one does.
12% of each item sold only via a bidder using their website.
 
Wholesalers get their money from the buying public, so they should just collect a fee off the retail store shelf cost as well. Its the same difference.

Go to the grocery store, and wholesale company A charges 10% over the cost listed, wholesale company B charges 12.5% over, company C charges 15% but has a half price 7.5% fee on anything with pork in it......

Go to the grocery store and shop, find your values or best products,, its all there in front of you real simple. Just do a little math. The customer pays so it doesnt matter if every item has a 7.5 to 15% fee attached. Oh if you pay cash or pay credit card might be 0-12% fee just depends.

Easy, no problem..... same principle.

Right?



I understand it works, it just makes buying more complicated. Simple folk just end up paying more, smart folk resist such gimmicks. IMHO sellers think they are making more, but with a smaller buying base likely not so.

Those in power and often time simple minded folk push it this direction, so it doesnt matter what it will come to be this way.

I dont have to like it and I cant put the toothpaste back in the tube so to speak, but I can have an opinion. :)

Paul
 
To me today it isn't bad do like you said. But when it first came around it was horrible they weren't advertising it and would say at the beginning of the sale but you wouldn't know if you were late. Or the worst one was a rolling premium on the total that you spent they had a sheet where you got a bid number and after trying to figure it out I just left and a lot of other people did to. One guy I new staid and I asked how it went he said it was bad it cost him thousands over what he figured.
 
Since when is it the auctioneer's responsibility to protect the buyer from themselves? Thought we were the "personal responsibility" crowd here.

People that can't control themselves deserve what they get, right? Yet I hear lot of complaining, "Well I don't know when to stop bidding and I'm being gouged!"

Guess "personal responsibility" only applies to everyone else.
 
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