Are auctioneers just plain greedy?

Hoof_Hearted

I have an item I want to sell, valued at around £300.

In order to sell at a local auction house I would have to pay 15% plus 1% insurance plus £4.50 lotting fee, which is a total of £52.50 excluding VAT. The seller has to pay 15% buyers' fee, which is £45 plus VAT. Therefore the auction house extracts over 30% of the item value.

Reading the terms and conditions, they seem to be responsible for virtually nothing and apply charges even if they don't sell the item.

Good business, no?

I think I will be looking at other avenues first, possible Ebay.

stephen77

how much profit do they make over the year?

hollydays

Did the auction house value it?

daveyjp

When you purchase a product in a store do you think the store pays the supplier the same as they charge you or do you think the store adds a percentage to cover their running costs?

Hoof_Hearted

daveyjp wrote: »

When you purchase a product in a store do you think the store pays the supplier the same as they charge you or do you think the store adds a percentage to cover their running costs?

I understand basic economics but the running costs of an auction room does not compare with those of a store -- an empty room, fewer staff, no fixtures and fittings, no product, no surplus stock, etc.

Upcoming auction -- 450 lots at an average of £100 = £45,000. which is £15,000 turnover from one auction.

Maybe I'm just a tight git.

Hoof_Hearted

stephen77 wrote: »

how much profit do they make over the year?

Don't know, but an awful lot....

Hoof_Hearted

hollydays wrote: »

Did the auction house value it?

No, I am aware of its value.

paddedjohn

Hoof_Hearted wrote: »

I understand basic economics but the running costs of an auction room does not compare with those of a store -- an empty room, fewer staff, no fixtures and fittings, no product, no surplus stock, etc.

Upcoming auction -- 450 lots at an average of £100 = £45,000. which is £15,000 turnover from one auction.

Maybe I'm just a tight git.

And out of that £15k there will be expenses to pay including office staff, porters, drivers, auctioneer, insurance, power, rates, rent etc not to mention the fact that not all of those lots will be sold. Also to remember is that a lot of auction houses only have sales once or twice a month.

DKLS

The greedy auctioneers are the ones that take bids from the wall.

jamesmorgan

Auctioneers (like any business) offer a service at a price. If customers believe that the service is worth it then sales are made and the business is successful. If the price is too high, fewer sales are made and the business is unsuccessful. In general, prices are set at the maximum price in order to achieve optimum profit. This is not greed but basic economics.

If prices across a group of companies are all too high it doesn't take long for a competitor to enter the market and undercut them. This is the case with Ebay. Their current pricing model is about 15% to the seller, but nothing for the buyer so overall charges are lower than bricks and mortar auctioneers. Ebay has clearly gained a lot of business from this model, however, there are additional risks from selling through an on-line auction. You need to decide whether these additional risks are more than offset by the lower charges. There are certain types of goods that I am happy to sell through Ebay. Others I would rather use a traditional auctioneer. At the end of the day the customer always has a choice.

knightstyle

Looking to sell some stamps, worth a lot. Fees at auction 20% plus vat!!!!!!!!!