Heritage Auctions Premiums

I was looking at some stamps on Heritage being offered. I saw that the premiums were now at 25%. This to me is crazy greed! More impact to the seller than the buyer. Do buyers change their behaviors because of this, and/or do the sellers just get less money of the proceeds? I think this is just bad for the hobby in general.

Specifically, If you were to plan a $1250 spend, does one's behavior change to bid beyond $1000? The actual valuation of the item from the buyers's perspective is the all in cost. This is seems like a slippery slope of bidders overpaying and ultimately causing longer term declines due to the continuous skewing.

Where does it end? 50%? If the cost of transacting is so egregious you would think competition would stifle this, but it seems in the high end markets, a goal appears to be weeding out the peasants altogether for folks who couldn't care less about a few percentage points.

If you are consigning significant material to an auction house part of the condition to consign relates to the seller commission. I currently have an auction house vying for me to consign non philatelic material. My willingness to do so is impacted greatly by whether their audience is the best venue for my material as well as the seller or consignor fee. I have made this clear and I'm sure they understand this. Unexceptable terms= no cosignment.

Heritage has another problem besides their fees: state tax application and their shipping policy and charges. All will have impact on realizations for all but the rarest items. But Heritage is not alone in this game. All auction houses in my opinion are charging crazy premiums on both side of the transaction relative to what they actually do. The item sells itself.

One auction firm that I occasionally bid with (not for stamps) has a 25% commission, and it is a deterrent. It's a small business and not high-end - I think the level reflects the challenges of the market in an ebay world. There are limits to the commission that firms can charge vendors because of the scope for vendors to take a punt in ebay selling by themselves, so the give tends to be at the buyer's end. On the other hand, what's an ebay consignor's fee - 30%, 35%?

Wow! 25% is a lot. Sad to see such high fees.

Is Heritage auctioning stamps again? I thought they had stopped doing that in 2010.

The buyer's premium would not be so much of an issue if the auction houses didn't routinely have a minimum starting bid equal to 50% of the Scott catalogue value. To me, that's not an auction; it's a hold-up. Any bid I make has to account for the additional 20% premium. So for an item with SCV = $1000 and a $500 minimum bid, adding 20% = +100 and I'm already at $600 (60% SCV) at that point. That's more than I want pay for most stamps, especially without certificates.

Also, now potentially add state sales tax upwards of 10% depending on state, if you are collector rather than reseller, and it gets rather daunting.

What I don't know is whether the auction houses are charging 10% on just the stamp/lot cost or 10% on the cost + buyer premium... which would add insult to injury.

Anything over 18% and it feels too high to me. Similar to @uboatnut, I also dislike when the min start bid is already a significant portion of CV. Prefer what Sparks does, with a $5 start and reserves only on a few items. It hasn't seemed to hurt their business - in fact, I wonder if it elicits additional bidding from people who wouldn't otherwise.

Well we are now at 18 to 18.5% buyers premium on top of bid + postage cost + 15% HST on top of all that in Nova Scotia, Canada. As well the seller is paying average 10 to 25% consignment fee depending on how much the consignment is worth.

I can tell you that my bids have been lowered considerably because of the added fees and taxes. In the end it is the seller who loses. No doubt the exception would be the high end rare items, with most holding their own value or increasing in value.

I like funcitypapa dislike the minimum start bull. They call it an auction, but it really is a minimum reserve sale otherwise. If you submit a low bid on some of the auction firms using the stampauction website you may notice that the bid will not even be displayed in the current bid value box. I think this is because they have minimums in place. Only when the minimum has been hit will the present bid value be shown. A minimum reserve sale in disguise. Ugh, hate it!

I understand that wages, benefits and buisness expenses take a large bite out of their income. But some companies are doing it all online and not paying for print or mail anymore and should be able to hold the 15% buyers premium.

In the end you bought it for your collection, studied and learned from it. You possibly displayed it at a show and got that social enjoyment and hopefully about 40 years later when it sells, someone may gey most of what you spent on it for them to now enjoy. We definately are not collecting to make money. If your looking for returns buy high yield bonds or play the markets for growth.

revenuecollector, the auction houses charging sales tax charge the sales tax on the total bill, including buyer's premium, shipping, insurance, etc.

I have never been taxed on shipping or insurance.

I have; they apply the sales tax on the total bill on my invoices. Lucky me I guess!

sales tax rules differ from state to state. It is likely that rodcam's state of residence does not tax shipping or insurance and your state does. If you live in the same state, one of the auction houses isn't applying the rule correctly.

If your state doesn't tax services, the auction house should not be taxing shipping or insurance... and one could make an argument that the buyer's premium is also a service rather than a product and should not be taxed either.

Never tax on services for me in CA.
Heritage Auction stamps.

https://www.ha.com/information/stamps.s

uboat - what auctions are routinely having a minimum starting bid equal to 50% of the Scott catalog value?